SMFG India Credit and PhonePe Partner to Offer Loans to Micro-Merchants

SMFG India Credit and PhonePe have partnered to offer collateral-free loans to micro-merchants on the PhonePe platform. This collaboration aims to provide convenient and seamless access to financial solutions for India's self-employed and small business community. The partnership combines SMICC's lending expertise with PhonePe's reach to democratize credit access for underbanked micro-merchants and unlock their growth potential.

New Delhi, September 12, 2025 - In a strategic move to enhance financial inclusion for India's micro-merchants, SMFG India Credit (SMICC) and PhonePe have announced a partnership to offer collateral-free loans. This collaboration aims to provide convenient and seamless access to financial solutions for the self-employed and small business community. The partnership leverages SMICC's lending expertise and PhonePe's extensive reach to democratize credit access for underbanked micro-merchants.

The collaboration comes at a time when financial institutions are increasingly focusing on innovative ways to reach the unbanked and underbanked segments. SMICC, which is part of the Sumitomo Mitsui Financial Group (SMFG), has a robust track record in the lending sector. Its recent acquisition of Fullerton India Credit, a move that saw it exit India in 2021, has bolstered its presence and capabilities in the Indian market Fullerton Financial to again scale up financial services, plans Rs 2,000-cr play^[1].

PhonePe, a leading fintech company, has been actively expanding its services and user base. The fintech giant has faced regulatory scrutiny in the past for non-compliance with prepaid payment instruments (PPI) norms, but has since taken steps to rectify these issues RBI fines PhonePe ₹21 lakh for non-compliance with PPI regulations^[2]. The partnership with SMICC is a significant step forward in its mission to provide comprehensive financial services to its users.

The initiative will see SMICC extend its lending capabilities to micro-merchants using the PhonePe platform. The loans will be collateral-free, making them accessible to a broader range of entrepreneurs who may not have the traditional collateral required for loans. This move is expected to unlock growth potential for micro-merchants by providing them with the necessary capital to expand their businesses.

The collaboration is part of a broader trend in the financial sector towards digital inclusion and financial innovation. By leveraging technology and data, financial institutions are able to reach customers who were previously underserved or unbanked. This partnership is a testament to the potential of such collaborations in driving economic growth and financial inclusion.