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Nano entrepreneur and beautician Fairoza Bano works on a client in her beauty shop.

Empowering India’s Nano Entrepreneurs

India is a nation of entrepreneurs, and the spirit of innovation and possibility is nowhere more apparent than in the country’s 11 million nano enterprises.

Nearly one-third of India’s workforce is employed by micro, small, and medium enterprises (MSMEs), which include nano entrepreneurs who often run small retail or kirana shops. Their economic impact amounts to nearly 30% of the GDP – and growing. With an estimated credit demand of $50 billion, these small businesses represent a big opportunity for the future of India.

11 M


$50 B


20 M


Supporting Small Business: It Isn’t One Size Fits All

Nano entrepreneurs are seeking the same things as any other small business owner: to build a thriving business, support their community, and secure a stable livelihood for their family. But when it comes to accessing financial services to grow their business, their needs are different from those of other small and medium enterprises. 

Unlike larger MSMEs, nano entrepreneurs are generally unable to provide collateral or credit history to qualify for a loan. They are often unable to access resources to help them scale; in a recent study, 80% of borrowers from nano enterprises had either bootstrapped through their own savings or received support from family and friends to start their businesses. 

It’s critical that nano enterprises are recognized as a distinct segment with a need for customized solutions.

Nano entrepreneur Ambika sits smiling in her small shop. Waring orange sari and scarf surrounded by merchandise.


Ambika and her husband run a small temple goods store in Bhubaneswar, the capital of Odisha in eastern India. With ambitions to grow the business, a $5000 (INR 4 lakh) loan from Arthan Finance made it possible for them to begin renting out catering equipment.

While many nano entrepreneurs lack access to formal credit, the couple qualified for a loan through an innovative lending model by Arthan Finance.

Learn more about how our partners are leveraging AI and machine learning to power alternative credit models.

Partnering for Impact

We’re working with our partners to design and scale up customized solutions for this robust segment. By expanding access to financial services, we can equip nano entrepreneurs to build thriving businesses – and further power the Indian economy.


Avanti Finance is a tech-powered non-banking financial institution that offers collateral-free loans to micro-entrepreneurs through a digital platform. Many of the micro-enterprises in India are unregistered proprietorships, which means they lack access to formal credit. Through Avanti, they are able to access up to INR 150,000 in working capital for up to 30 months at a highly favorable interest rate.


With businesses that are largely informal and unregistered, nano entrepreneurs may lack credit history – but what they do have are data trails. With proprietary algorithms powered by artificial intelligence and machine learning, Arthan Finance uses data sources like bank accounts and digital transactions to create alternative credit models – making it possible for nano entrepreneurs to qualify for loans and ultimately grow their businesses.


Nano enterprises are often unable to access loans because of the perceived risk to lenders. Caspian Impact Investments offers customized debt products to non-banking finance companies (NBFCs) which design their own credit assessment and underwriting processes to mitigate the risks of unsecured debt to micro enterprises. Caspian undertakes detailed diligence of these processes and offers debt support to select NBFCs.


The financial technology company Kaleidofin launched in 2017 with a goal-based savings product to help people pay for their children’s education, work on home improvements, or fulfill other personal objectives. Since then, Kaleidofin has developed a diverse suite of offerings such as KiScore, an AI-based credit scoring solution that uses alternative data points to help nano entrepreneurs unlock access to capital.


Since nano entrepreneurs are often unable to access credit from formal banking institutions, many turn to local money lenders who charge exorbitant interest rates. Kinara Capital offers an alternative, providing low-interest business loans in the range of $2000 to $20,000 (INR 1 lakh to 30 lakhs).


Northern Arc has been working to advance financial inclusion for more than a decade, providing access to credit for small businesses and families. With Northern Arc, we have been able to create guarantor arrangements to unlock large sums of loans, secure the risk of non-payment and provide a ready pool of cash liquidity. 


Sub-K is focused on financial inclusion, reaching an underserved market with the right financial tools for their needs. For example, nano entrepreneurs can access group loans, individual loans or even savings accounts through their relationship with Sub-K.


REVIVE Alliance was launched in October 2020 to help informal workers and micro entrepreneurs recover financially from the impact of COVID-19. One of the ways REVIVE provides access to capital is through returnable grants, where individuals and entrepreneurs have a moral obligation to pay back the grant with no pressure of interest. Repayment can begin when the individual is back on their feet.


Vivriti is unlocking small-ticket retail credit to micro entrepreneurs to support and enhance their business incomes. The word ‘Vivriti’ means progress or development, and is representative of the institution’s work to advance financial inclusion and accelerate opportunity. 

Dive Deeper

Kinara Capital provides loans to create pathways to prosperity.

Hear the stories of a husband-and-wife team who struggled to keep their business afloat through the pandemic, and how Kinara Capital helped them.

Small Business, Big Opportunity

In recent years, we’ve seen growing recognition of the unique needs of the nano entrepreneur segment – and of the unmatched potential these businesses represent. This work is just getting started and we are optimistic about the opportunity ahead – for nano enterprises, the people they employ, and their families, as well as India’s economy as a whole. It all starts with giving people the tools they need to build their own success.

Insights & Resources

Articles & Podcasts

Financial Express: Unlocking the Untapped Potential of Nano Entrepreneurs

Nano entrepreneurs need to be given additional risk capital and guarantees to unlock business credit. Empowering Nano Entrepreneurs to Transform India’s Economy

Ingenuity, vision, and limitless potential of this segment represent a largely untapped opportunity.

The Economic Times: How to Stir Up India’s Nano Entrepreneurs

Too many businesses aspire to succeed but have limited means to grow and are being left behind. Why We Need to Talk About Nano Entrepreneurs

Nano enterprises have a significant role to play in our economy, from creating employment opportunities to contributing to our GDP. 

The UpStreamLife: Nano Entrepreneurs – Why We Believe in this Segment

With the right data, we can expand access to financial services for this segment.


The Impact of Access to Finance on Nano Entrepreneurs

Learn more about nano enterprises and the challenges they face today and recommendations from LEAD at Krea University on how we can better support their sustainable growth.

The State of Micro Enterprise Financing

This report by ACCESS Development Services, in partnership with Equifax, explores the state of financing to MSMEs and offers recommendations to improve credit access.

Digital Banks: The Next Stage of Financial Inclusion

Learn how digital banking can expand credit access for small businesses in this report by NITI Aayog, the National Institution for Transforming India.

Other Resources

Ministry of MSME

Learn about India’s Ministry of Micro, Small & Medium Enterprises and initiatives designed to support the sector.

Fact Sheet on MSME Registration

Explore the government’s MSME registration portal, including key facts and figures on the number of registered enterprises.

Credit Guarantee Fund

Learn about this key initiative enabling access to credit for MSMEs through a government-supported credit guarantee fund.