Impact of Access to Finance on Nano Enterprises

Sharon Buteau, Abhishek Gupta, Varun Hariharan

January 2023

Nano enterprises can be classified as a distinct segment within the Micro, Small and Medium Enterprises (MSMEs) as firms with an annual turnover less than INR 1 crore, characterised by their hyperlocal roots and focus. These are ubiquitous businesses which are part of any typical urban/semi-urban milieu. Their strength lies in serving hyperlocal needs with agility and overcoming daily vicissitudes to sustain a lower middle-class urban living. However, these enterprises do not have the capacity to manage external shocks over an extended period of time without outside support.

The Dell Foundation and LEAD at Krea University have designed a three-year longitudinal study to assess the impact of credit provided to nano enterprises. The study is executed in partnership with seven Non-Banking Financial Company (NBFC) investees of Dell Foundation. This report presents baseline findings from the ongoing evaluation of the impact of access to credit on nano enterprises.

This study consolidates detailed results from 2,250 borrowers spread across 169 districts (including metro, urban and semi-urban areas) in seven large states of India (in north and south). Thus, despite covering only seven NBFC partners, the insights paint a granular picture of urban nano enterprises in India. These findings are intended to throw light on the distinct character of these enterprises within the larger MSME space in India. It is expected that the report will help these enterprises receive further attention of donors and investors, financial services industry, and policymakers.


Baseline Report

Thematic Area

Small, Growing Businesses and Employment