PhonePe Ties Up with SIDBI to Ease Loans for Small Merchants

Fintech platform PhonePe has unveiled digital-first Udyam registration via the Udyam Assist Platform (UAP) at an event held in Delhi. To give context, Udyam is a 12-digit government-issued identification number that formally recognizes micro and small enterprises (MSEs), enabling them to access benefits such as credit, subsidies, and other government schemes.

“We have to give them (small merchants) a chance to access formal credit and government benefits from schemes that already exist, but in a much easier way. A big challenge was that many shopkeepers lacked a formal business identity. SIDBI has addressed this by issuing Udyam IDs to small and micro enterprises,” said PhonePe CEO Sameer Nigam.

The event also saw the signing of a Memorandum of Understanding (MoU) between PhonePe and SIDBI aimed at improving credit access for micro merchants through digital lending solutions integrated with UAP.

“No bank account, insurance, demat account or credit can function without KYC. For shopkeepers, Udyam has filled that gap. Thanks to SIDBI’s infrastructure, 2.74 crore micro enterprises have already received their IDs. Now, together, our goal is to triple this number over the next four to five years. PhonePe alone has digitised 4.5 crore merchants across the country,” said Hemant Gala, Phone Lending CEO.

Adding her perspective, Y. M. Kumari, Chief General Manager at SIDBI, said that the potential of this collaboration goes beyond identity.

“Having worked with the Udyam Registration Portal (URP) for the last two years, we have already enabled nearly 3 crore micro enterprises, many of them women-led. If we can link this database with other accredited platforms – credit bureaus, payment aggregators, account aggregators, and utilities – it can evolve into a true data powerhouse. The raw data of today can become tomorrow’s growth engine,” she explained.

She added that the aim is not just to enable credit flow, but to make credit faster, more efficient, and more inclusive.

This comes at a time when the fintech platform is planning to go for an IPO. While the exact date for the same is not known, as per media reports, the media platform will file for an IPO via confidential route by September-end.

As per Moneycontrol, the company might be sized at about Rs 10,000–13,000 crore (approximately $1.2 – 1.5 billion). Further, the valuation the company is around $10 – 12 billion. The company is aiming at listing by early 2026.