Premji Invest, Norwest, and Lok Capital will invest up to ₹1,000 crore in Vegafin, an artificial intelligence (AI)-driven platform focused on micro, small, and medium enterprise (MSME) lending. The firm was founded and promoted by ICICI Bank veteran Bijith Bhaskar.
A portion of the funds has been used to acquire a majority stake in Bizloan, a Gurugram-based non-banking financial company (NBFC) specializing in secured MSME loans, according to a joint statement. The remaining capital will fund platform development and broader expansion.
Vegafin plans to build a technology-led MSME lending platform differentiated by AI-driven underwriting, digital workflows and data-led credit decisioning, complemented by deep on-ground distribution presence. EY Investment Banking acted as the exclusive financial advisor for the deal.
“The MSME sector is a cornerstone of the Indian economy, yet it faces a staggering credit gap, pegged at more than ₹30 trillion. There is a clear need for a pan-India player with a strong MSME focus, efficient cost of service and ability to price risk accurately,” Bhaskar, founder, CEO and managing director of Vegafin said in a statement.
“Our platform aims to fill this need by leveraging technology to provide accessible and affordable secured credit for various requirements across the lifecycle of MSMEs,” he added.
The platform aims to build a hybrid ‘phygital’ lending platform to democratize access to MSME credit. “Our ambition is to leverage AI and harness data from multiple sources to develop deeper insights into MSME businesses, enabling faster, granular and accurate assessment of credit risk,” Bhaskar said. Over time, the AI and data-led approach, handpicked leadership team and robust capital base will help the company build a quality lending platform, he added.
Before founding Vegafin, Bhaskar spent more than two decades at ICICI Bank, where he held several leadership roles across retail banking, digital banking, credit cards, consumer finance and merchant eco-systems.
With the Bizloan acquisition, the overall platform will focus on faster turnaround, sharper risk selection and lower operating costs while scaling access to underserved MSMEs. “We will scale our on-ground presence alongside stronger digital capabilities,” Bizloan founder Rahul Jain said.
Scaling footprint
Bizloan has a presence across five states through more than 35 branches and has about ₹235 crore in assets under management (AUM). Founded by veteran bankers Jain, Abhishek Mishra and Vikram Diwan, Bizloan began operations in 2018. It is currently backed by the Michael & Susan Dell Foundation, BLinC Invest and Mohan Enterprises. BLinC Invest will remain an investor in Bizloan while Mohan Enterprises and the Michael & Susan Dell Foundation will exit.
“India’s MSME lending opportunity remains extremely attractive. Small businesses and lower-income households in semi-rural and rural India are still significantly underserved by formal credit,” said Rajat Bansal, partner at Lok Capital.
The investor consortium sees a meaningful opportunity to harness technology to reduce friction and improve access to credit for Indian MSMEs. “By co-creating and empowering platforms such as this, we are driving real business growth for the small businesses that underpin the economy,” said Saravanan Nattanmai, partner, financial services, at Premji Invest.
“Bijith and his team bring a unique combination of large-scale banking, technology and execution experience. Bizloan provides a strong foundation for this journey,” added Niren Shah, managing director and head of India at Norwest.
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