According to reports, there are more than 630 lakh MSMEs. Only 250 lakhs have had access to credit products. Another research says that India’s MSME credit gap is Rs 33 trillion.
Given these numbers, Fintech startups like Credflow is the need of the hour to drive credit infusion in MSMEs.
Working capital is the backbone of any business. It helps companies to meet their day-to-day expenses, such as raw materials, wages, rent, and utilities. However, due to the pandemic, many small segment businesses have faced reduced sales, delayed payments, and increased costs. This has created a working capital crunch for them.
Credit infusion can help them overcome this problem by providing funds to maintain their operations.
In the age of digitalisation, no business can prosper without incorporating technology into its operations. For example, there are many repetitive tasks in the business, and with technology, the company only needs to provide instructions, and it will take care of the rest. Furthermore, investing in technology is not an ongoing expense. However, if an MSME relies on staff to complete the same duty, they must pay their employees each month.
Investing in technology is expensive; hence, credit infusion in MSMEs is necessary.
Change is the need of an hour. If, with time, the companies do not add new products and services to their lineup, they won’t be able to compete in the dynamic business world.
However, diversifying the product portfolio and services requires funds, which MSMEs may not have. Credit infusion can help MSMEs develop new products, add new features, and offer value-added services.
With the penetration of technology and cheaper internet, establishing oneself in the international market is not difficult. For example, with the internet, one may run a business without a physical presence and communicate with consumers worldwide.
However, in business, most bulk transactions are made on credit or paid upon delivery. The entrepreneur must first arrange and pay for logistics, packaging, and other associated costs in such a circumstance. In the case of a service firm, an MSME may be required to establish a branch overseas.
This requires capital, which can be obtained through credit infusion in MSMEs through lending institutions.
Credflow provides MSMEs with a platform with a robust analytics suite, helping them manage their finances and operations.
a) It integrates with MSMEs’ accounting software, such as Busy or Tally, and syncs their data on the cloud.
b) Credflow allows businesses to access their data on their mobile devices anytime and anywhere.
c) It provides MSMEs with insights and recommendations on their cash flow, receivables, payables, inventory, sales, and expenses.
d) Their platform helps MSMEs to make data-driven business decisions, such as when to pay or collect, whom to sell or buy, and how much to invest or borrow
e) Credflow streamlines MSMEs’ communication and collaboration with their team, customers, and vendors.
Credflow has helped MSMEs recover their payments faster, reduce their outstanding dues, optimize their working capital, and increase revenue.
The collaboration between Finverv and Credflow is a significant step forward in addressing credit-related issues faced by MSMEs. Finverv’s innovative lending middleware facilitates credit access for small businesses. On the other hand, Credflow’s powerful analytics suite improves financial management efficiency. These fintech solutions are well-positioned to promote growth and stability in the sector while closing credit gaps and contributing to India’s economic well-being.
