How this fintech platform is enabling MSMEs to create and manage growth

After the onset of the COVID-19 pandemic, micro, small, and medium enterprises (MSMEs) were among the worst affected. This prompted government institutions, fintech startups, and even large enterprises to take initiatives to handhold the sector towards digital transformation. 

MSMEs play a crucial role in the Indian economy not just by contributing 30 percent to the GDP but also by generating employment for 111.4 million people. Though MSMEs form the backbone of the country and have been fuelling the growth of large enterprises by often being their primary sources of raw material, the sector is facing an acute financial crisis, including the lack of working capital. 

For any business to be viable, a steady flow of capital is necessary to make routine payments, cover unexpected costs, purchase basic materials, production of goods etc. However, most MSMEs that operate their business traditionally find it difficult to pivot according to the changing ecosystem and face a challenge when it comes to growth. 

In the last two years, many startups have come forward to support MSMEs and give their financial health a boost by introducing various campaigns and initiatives.

CredAble, a Mumbai-based fintech startup founded in 2017, is enabling working capital financing by providing liquidity programmes for enterprise ecosystems using technology platforms, digital KYC and onboarding, deep ERP, bank integrations, digital documentation, and transaction management. 

Keeping the financial and operational needs of MSMEs in mind, the startup recently launched UpScale, a solution that connects with the business’ existing accounting software, syncs transaction details, connects with bank accounts and credit bureaus, and gives instant access to working capital with the help of partnered financial institutions. 

Speaking to SMBStory, Nirav Choksi, Co-founder and CEO of CredAble, and Nitin Sharma, who heads the UpScale vertical, talk about their vision of helping MSMEs, creating and managing growth in their businesses, and the enabling solutions they have to offer.

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SMBStory [SMBS]: Small businesses and MSMEs face extreme working capital challenges. How is CredAble solving this problem?

Nirav Choksi [NC]: CredAble has been working with hundreds of thousands of SMEs in India, with a singular focus on solving their working capital challenges. In fact, CredAble has enabled more than $2 billion annually in working capital for Indian companies, including large, mid, emerging corporates, MSMEs, and financial institutions. The platform today hosts over 50 corporate customers, more than one lakh borrowers, and 25 large financial institutions and banks. For instance, in September 2021, we disbursed Rs 3,500 crore to more than one lakh small businesses and foresee an even higher disbursement in the coming months.

However, during our interaction with these businesses, it became very clear that while raising capital is difficult and remains the biggest roadblock for growth, the current inefficient system of managing cash flow is a major contributor to why businesses face a cash crunch in the first place. 

The fintech industry saw rapid progress over the last few years, with state-of-the-art technologies available which can greatly increase efficiency in financial operations and fuel growth. However, most of these technologies are either not focused on the SME ecosystem or are sold individually in silos, which makes it difficult for SMEs to stitch a proper solution.

It became very clear to us that small- and medium-sized businesses require an efficient, intuitive credit and cash flow management system. This is exactly why we've built UpScale, our newest offering from the CredAble family.

By combining banking and payments, accounting and reporting, access to instant, collateral-free working capital and growth tools, UpScale helps MSME business owners with business growth.

SMBS: CredAble offers an AI-powered tool via UpScale. Tell us about the response you’re getting from traditional businesses located in Tier II and III towns.

Nitin Sharma [NS]: When we surveyed MSMEs to understand their problems, we found many SMEs struggle to access real-time data of their financial health due to many reasons such as delayed payments, late receivables, and so on. This hinders them from getting access to capital from lenders. We thought if a solution could help them integrate their accounting data from start to end, it would help smoothen their operational process and also get access to credit faster.

UpScale has the capability of serving all kinds of businesses, even those traditionally offline in nature. Since it can sync accounting and transaction details through an accounting software to produce analytical business reports, this also allows the user to access their accounting data in real time – both online and offline. 

The key thing is that while UpScale has AI-powered technological infrastructure, it works with existing accounting software available with SMEs and builds intelligence with AI on top of it. In other words, an SME can leverage the benefits of modern technologies like AI-driven insights without any additional learning curve since it can be availed in a simple intuitive manner through the UpScale dashboard.

For example, the platform uses massive time series data platform analysis which results in automatic cash crunch projections, allowing the business to assess their current situation and preventive measures that need to be taken.

Similarly, with AI-driven credit score monitoring and bank transaction analysis, a user can learn exactly what they need to work on should they wish to improve their chances of getting a loan. 

Considering UpScale is an online app that is available to everyone with a smartphone or a desktop with an internet connection, it offers a fully-digital business loan application process. 

For a business, traditional or not, what matters the most is how data is presented to them. It needs to be correct but also presented in a manner that is easy to grasp and enables faster decision-making. With UpScale, businesses get access to the required information that helps the user make informed financial decisions for the growth, and our users thus far have really appreciated it.

So far, we’ve seen a very positive response from our users who are spread across India. After our beta launch in October and official launch in November, we have received 20,000 sign-ups from MSMEs, with an average of 5,000 registrations per week.

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SMBS: How is CredAble making a difference to the small business and MSME sector?

NS: With offerings like just-in-time financing, receivables funding, purchase order financing, early payment programmes and so on, CredAble has always been at the forefront to enable liquidity in the supply chain enterprise across sectors. With UpScale coming into the picture, we are levelling the playing field for small- and medium-sized businesses to grow.

UpScale gives a business a 360-degree view of their financial health and operations, which was missing earlier. Businesses today operate in a very fragmented manner where their banking, payment, accounting and reporting systems don’t talk to each other. By bringing together all these features and more onto one single platform, UpScale helps in managing the financial operations of a business.

Features like sending due payment reminders with a payment link and smart reconciliation make it easier for a business to collect payments quikly and reduce the headache of manual reconciliation for the accounting team.

Basically, UpScale compliments the complete product suite of CredAble and the entire ecosystem of supply chain financing.

Using state-of-the-art technology platforms, digital KYC and onboarding, deep ERP and bank integrations, along with digital documentation and transaction management, we have been able to provide liquidity programmes for enterprise ecosystems and help the SME suppliers and distributors with funding.

Penetrating deeper into the local markets is on our roadmap to ensure small businesses can benefit from the features of the platform on a larger scale creating an impact on the overall growth of the country’s SME sector.

SMBS: What other solutions is CredAble planning for SMBs in the future?

NC: We have a three-way approach to reach our target customers: through digital marketing, a personal approach, and the ecosystem connected via our vendors. We want UpScale to be the only app an SMB will need for their business. 

Currently, an UpScale user can get easy access to their sales, inventory, reports, reconciliations, compliances, payments and even cash positions.

In addition to banking payments, accounting reporting, and automating business operations with growth tools, the user can instantly procure working capital without any collateral and manage the cash flow of the business along with other financial operations. 

We are also working towards making UpScale a super app for SMBs in India, where a business can get a fast and accurate analysis of their financial operations and make informed decisions and access working capital credit in various forms. We are already providing working capital in the forms of term loans, buy now pay later, and sales invoice discounting.

In short, UpScale works as a fully-sufficient MIS and gives the user, i.e., the business owner, the ease of making informed business decisions, focusing on growth.