India’s MSME lending space is witnessing fresh momentum.
Prayaan Capital, now led by Rangarajan Krishnan (Ranga), former JMD and CEO of Five-Star Business Finance, has raised ₹110 crore in its Series A round, led by Peak XV Partners.
For Ranga, this isn’t just another funding announcement. After recently acquiring a controlling stake in Prayaan Capital, his vision is clear — to build a new-age MSME lending platform that bridges India’s massive small-business credit gap through a combination of deep underwriting expertise and a technology-first operating model.
India’s MSME sector continues to face an estimated $300 billion credit gap, particularly in underserved and semi-urban markets. Prayaan Capital aims to address this by blending branch-led distribution with digital efficiency across sourcing, underwriting, and collections.
The newly raised capital will be deployed toward building a robust lending platform, strengthening the leadership team, and expanding deeper into key MSME markets across the country.
In many ways, the strategy reflects Ranga’s past experience of scaling structured lending businesses — but this time with sharper technology integration at its core. The focus remains on enabling small entrepreneurs who often sit outside the formal credit ecosystem.
Peak XV Partners, which has been investing in India for over two decades and manages more than $10 billion across 16 funds, has backed over 450 companies, with 35+ IPOs and multiple successful exits. Its participation signals strong institutional confidence in the MSME credit opportunity.
As formal lending continues to evolve in India, Prayaan Capital is positioning itself at the intersection of on-ground credit expertise and digital scalability — with MSME growth at the centre of its thesis.
-By Muskan Dengra
