PhonePe has launched digital-first Udyam registration through the Udyam Assist Platform (UAP) at an event in Delhi. The fintech leader unveiled the initiative to bring India’s informal micro enterprises into the formal economy. By providing these businesses with a recognized identity, PhonePe aims to open doors to government schemes, tax benefits, business bank accounts, and financial services linked to its growing digital payments ecosystem.
The event featured the first issuance of Udyam Assist Certificates to merchants through the new digital system. PhonePe also signed a Memorandum of Understanding (MoU) with the Small Industries Development Bank of India (SIDBI) to strengthen credit access for micro merchants. Together, the two organizations plan to integrate digital lending solutions into UAP, making formal finance more accessible than ever.
Bridging the Formality Gap
India has millions of micro enterprises operating informally. These businesses generate local employment, drive neighborhood economies, and form the backbone of rural and urban markets. Yet, without formal recognition, they remain excluded from institutional credit, structured financial services, and government support.
PhonePe identified this gap and stepped forward with Udyam Assist Platform integration. The company believes that formalizing informal enterprises can accelerate growth, expand opportunities, and secure a sustainable future for India’s micro business owners.
The Udyam Assist Platform, developed by SIDBI under the Ministry of MSME’s Formalisation Project, acts as a digital gateway. Through UAP, micro enterprises can register online via designated agencies. Once registered, they receive Udyam Assist Certificates, which act as proof of identity and eligibility for schemes under the Ministry of MSME.
How Udyam Registration Works with PhonePe
PhonePe’s integration makes the registration process fully digital and simple for merchants. Micro entrepreneurs can initiate the process through designated centers supported by PhonePe. With minimal paperwork and real-time validation, the system ensures speed and transparency.
After registration, Udyam Assist Certificates provide enterprises with a formal identity recognized by government agencies. With this certificate, merchants gain access to benefits such as:
- Eligibility for government schemes that provide subsidies, grants, and incentives.
- Access to institutional credit from banks and NBFCs under priority sector lending.
- Business bank accounts linked to formal identification, ensuring better financial management.
- Tax benefits and rebates reserved for registered micro enterprises.
- Integration into the digital payments ecosystem, improving efficiency and customer trust.
By enabling micro businesses to formalize, PhonePe expands its ecosystem beyond digital payments into empowerment and financial inclusion.
Partnership with SIDBI
The MoU between PhonePe and SIDBI goes beyond registration. SIDBI has long served as a development bank for small and medium businesses, providing credit, refinancing, and advisory services. By partnering with PhonePe, SIDBI extends its reach into the digital space, where millions of merchants already interact daily.
Together, the two institutions plan to roll out digital lending solutions. These solutions will integrate seamlessly with UAP and PhonePe’s merchant platform. For micro enterprises, this means they can access working capital loans, credit lines, and other forms of finance based on their digital transaction history and formal Udyam status.
This initiative strengthens trust between lenders and micro businesses. Banks and NBFCs can rely on formal Udyam certificates and digital transaction data to assess creditworthiness more accurately. As a result, merchants gain faster approvals, lower interest rates, and access to structured finance.
Formalisation as a Growth Multiplier
Formalisation plays a critical role in the growth trajectory of any economy. Informal businesses, while vibrant, often operate without access to the tools they need to scale. They rely on personal savings, informal lending networks, and inconsistent cash flows. Without a formal identity, these businesses miss out on credit, legal protections, and technology adoption.
PhonePe’s Udyam registration initiative tackles these challenges head-on. By giving micro businesses a digital identity, the platform removes barriers to growth. A small grocery shop owner can now apply for a business loan. A neighborhood tailor can open a current account and expand operations. A local kirana store can leverage tax incentives and invest in technology upgrades.
The ripple effect goes beyond individual businesses. Communities benefit as formalized enterprises generate jobs, pay taxes, and contribute to local development. With more micro businesses entering the formal economy, India strengthens its GDP growth and employment creation.
Empowering Merchants Through Digital Tools
PhonePe continues to position itself as more than a payments company. Its merchant platform already enables millions of small businesses to accept UPI payments, track transactions, and manage customer engagement. Now, with Udyam registration, the company extends its value proposition.
By empowering merchants to formalize, PhonePe creates a virtuous cycle:
- Merchants register on UAP through PhonePe support.
- They gain formal recognition and Udyam Assist Certificates.
- They access credit and financial services through SIDBI and lending partners.
- Their businesses expand, generating higher digital payment volumes.
- PhonePe strengthens its ecosystem while merchants grow sustainably.
This strategy aligns business goals with social impact, creating a win-win model for both PhonePe and India’s micro enterprises.
Government’s Role in Formalisation
The Ministry of MSME’s Formalisation Project provided the foundation for UAP. By mandating digital tools and designated agencies, the government built a framework that balances simplicity with credibility. SIDBI developed UAP to operationalize this vision and ensure scalability.
PhonePe’s entry adds private sector strength to the government’s formalisation agenda. With its vast network of merchants and technology expertise, PhonePe can accelerate adoption at a national scale. By collaborating with SIDBI, it bridges the gap between government policy and ground-level implementation.
This public-private collaboration underscores the government’s recognition that digital platforms can play a transformative role in reaching India’s underserved business segments.
Case Studies of Impact
At the Delhi event, PhonePe issued Udyam Assist Certificates to select merchants. These stories illustrate the real-world impact of the initiative:
- A street food vendor in East Delhi registered digitally within minutes. With a certificate in hand, he can now apply for a bank loan to expand his stall into a permanent shop.
- A neighborhood kirana store owner used the platform to formalize her business. She now plans to open a current account and apply for GST registration, which will help her scale operations.
- A tailor in Old Delhi secured formal recognition that enables him to participate in government subsidy schemes for small manufacturing enterprises.
These examples show how simple registration can unlock life-changing opportunities for micro entrepreneurs.
Future Roadmap
PhonePe aims to scale Udyam registration through UAP nationwide. The company plans to integrate the process into its merchant app, allowing seamless onboarding for millions of users. Training programs and awareness campaigns will accompany the rollout to ensure adoption in both urban and rural markets.
The partnership with SIDBI will also evolve. Beyond credit, the two organizations may explore insurance products, skill development initiatives, and capacity-building programs linked to UAP. By embedding these services into the digital ecosystem, PhonePe can create a one-stop platform for micro enterprise empowerment.
Over time, PhonePe envisions a future where every informal business in India has the opportunity to formalize. This vision aligns with national priorities for MSME growth, job creation, and financial inclusion.
Conclusion
PhonePe’s launch of digital-first Udyam registration through the Udyam Assist Platform marks a landmark step for India’s micro enterprises. By providing a formal identity, enabling access to government schemes, and integrating digital lending solutions, the initiative bridges the gap between informal businesses and the formal economy.
The partnership with SIDBI strengthens the ecosystem further, ensuring that credit flows to where it matters most—India’s smallest businesses. For millions of micro entrepreneurs, this marks the beginning of a journey toward recognition, growth, and long-term sustainability.
With its focus on innovation, collaboration, and empowerment, PhonePe positions itself as a catalyst in India’s formalisation drive. The move signals that the future of small business lies in digital tools, formal recognition, and inclusive finance.
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