Credit at the last mile

BLS E-Services is connecting its physical banking network with loan distribution, as smaller businesses seek easier access to formal finance.

For a small business seeking working capital, the distance to formal finance is not always measured in kilometres. Documentation, limited credit history and the difficulty of demonstrating steady earnings can be equally significant barriers. BLS E-Services is positioning its assisted banking and loan distribution businesses around that gap, combining local access with digital processes to connect customers with financial institutions.

The opportunity comes amid rapid growth in small-business borrowing. The Reserve Bank of India’s June 2026 Financial Stability Report records micro-enterprise credit growth of 28.8 per cent year-on-year as of March 2026, ahead of small enterprises at 19.4 per cent and medium enterprises at 13.5 per cent. Micro enterprises also recorded a higher early-overdue ratio, with SMA-1 at 2.4 per cent, against 0.9 per cent and 0.4 per cent respectively. Expanding access and maintaining repayment discipline must therefore advance together.

For BLS, the distribution opportunity is already substantial. During its interaction with Bizmudra, the company reported FY26 gross transaction value exceeding INR 1.11 lakh crore, up 27.3 per cent year-on-year, and loan leads exceeding INR 36,800 crore, compared with over INR 11,700 crore in FY25. These measure business facilitated through its channels, rather than BLS’s own revenue or lending book. The comparison also reflects a full year of Aadifidelis consolidation in FY26, following its acquisition in November 2024.

A listed subsidiary of BLS International, BLS E-Services operates across business correspondent services, loan distribution, e-governance and assisted digital services. Its banking outlets provide account opening, cash deposits and withdrawals, alongside access to insurance and pension products. Government services and other assisted transactions widen the reasons for customers to visit its network.

Business correspondent services are a core part of the company’s operations, serving public and private sector banks. Its government-to-citizen operations include services in Uttar Pradesh, Rajasthan and Karnataka. The financial proposition is to use that familiarity with customers to understand their borrowing requirements and connect them with appropriate lender products.

Ashish Misra, deputy ceo, BLS E-Services

"The physical outlets are an essential source of trust that give you access to the customers. The digital digital channels extend the services available to customers, essentially, adding to what you can’t do in a physical outlet. And that’s where, when you promote banks’ apps or banks’ services which they are offering digitally, it complements. So both are complementary services to each other."

Recalling a visit to a Mumbai customer service point during heavy rain, he says customers valued the time and travel costs saved by having banking services close to home. That local connection becomes more useful when lenders can assess the business behind an application.

Misra describes a shift towards using evidence of cash flows alongside conventional credit assessment. He identifies inventory, receivables, invoice financing and short-term working capital among the needs such assessment can address. Consent-based financial data sharing through the Account Aggregator ecosystem can also reduce documentation friction.

Misra emphasises, "A small business might not have audited financials or property to pledge, but it increasingly leaves a digital footprint through GST filings, bank transactions, UPI collections. So with the borrower’s consent, lenders can use that trail to understand revenue consistency, seasonality, and working capital cycles. So for me, the opportunity is not to dilute credit discipline, but to make credit assessment more relevant to how a micro enterprise actually operates.”

However, Misra stops short of claiming a specific improvement in approval rates without comparable lender data. Faster processing is useful only if the resulting loans remain suitable and perform adequately.

The loan distribution business draws heavily on Aadifidelis Solutions Private Limited, in which BLS holds a 57 per cent stake. The subsidiary operates through a direct selling agent model. The company’s subsequent response puts its loan distribution business works with more than 148 banks and NBFCs. The INR 36,800 crore figure combines Aadifidelis activity with business through BLS E-Services’ other banking channels, according to the company.

The distinction between leads and completed lending remains relevant. BLS’s written response uses both loan leads and facilitated disbursements for that figure, without supplying a reconciliation of applications, sanctions and actual disbursements. It is therefore described here as loan leads. The reported average ticket of INR 8 lakh to INR 10 lakh also covers a wider product mix, rather than micro-enterprise borrowing alone.

In its follow-up response, BLS said it could not isolate micro-enterprise lending from other MSME and personal loan activity. It also said repayment and early-arrears information remains with partner lenders. Consequently, its distribution figures cannot establish either the share reaching first-time formal borrowers or subsequent repayment performance. The RBI’s stress indicators describe the wider market, rather than BLS-sourced loans.

Misra’s industry prescription is sharper monitoring beyond origination, using transaction behaviour to detect emerging stress and engage borrowers early. Diversification across industries also matters when particular business segments face pressure.

BLS’s expansion plans include lending partnerships with Piramal Finance and Tyger Capital group entities, covering products such as business loans and affordable housing. Its acquisition of Atyati Technologies also adds rural banking reach and technology capabilities.

The next commercial test is how effectively these relationships translate into completed loans and productive outlets. For borrowers, the measure is more practical: finance that arrives when needed, on terms their businesses can sustain.