The/Nudge, an Indian action institute focused on livelihoods and economic inclusion, is receiving a $15 million funding commitment from Google.org, Google’s philanthropic arm, to develop artificial intelligence (AI) tools for India’s micro, small and medium enterprises (MSMEs).
The funding aims to improve access to formal credit, market opportunities, and regulatory compliance for small businesses.
The programme will include an open call for proposals to identify practical solutions to business challenges. It will also develop a multilingual, voice-led platform to train people in Tier III and IV towns in job-ready skills and connect them with small businesses.
Google’s announcement estimates that more than 90 million small businesses in India employ over 345 million people, although many continue to face difficulties securing finance and reaching digital markets.
Preeti Lobana, Google India’s Vice President and Country Manager, said the AI technology must address everyday business needs. “For AI to be truly successful in India, it must become a practical multiplier for the millions of small businesses that drive our economic growth,” she said.
The funding comes amid growing investment in technology-led lending to small businesses. In February, Chennai-based Prayaan Capital raised Rs 110 crore in a Series A round led by venture capital firm Peak XV Partners to build a technology-enabled lending platform. In October 2025, Bengaluru-based Optimo Capital raised Rs 150 crore from founder Prashant Pitti and existing investors Blume Ventures and Omnivore, alongside separate debt funding of Rs 110 crore from IDFC and Axis Bank.
Subhashree Dutta, Chief Executive of the^delta, an organisation supporting social entrepreneurs, said the initiative would use “stage-gated grand challenges”, meaning competitive rounds with defined milestones, to support solutions across compliance, market access, quality and credit. She argued that these barriers reinforce one another.
Dutta also said the initiative’s open standards could make MSMEs more competitive, creditworthy and globally visible.
Government initiatives are also targeting the sector’s financing and technology constraints. The IndiaAI Mission, approved in 2024 with an outlay of Rs 10,371.92 crore over five years, supports computing capacity, skills, startup financing, and AI applications. In October, the Union Cabinet approved a separate Rs 10,000 crore SME Growth Fund for direct equity investment in growth-oriented businesses.
Public-sector banks are also using digital credit assessments based on verifiable business data. Official figures show that 98,995 MSME loan applications were sanctioned under this model between April 1 and July 15, 2025.