Lack of capital availability is the only biggest challenge facing the Indian Micro, Small and Medium Enterprise (MSME) sector, said Saurabh Jhalaria - CEO, SME Business, InCred.

Excerpts of the interview...

Please tell our readers about InCred.
Saurabh Jhalaria: InCred caters to the financial needs of everyone ranging from homemakers, working professionals, and students to self-employed individuals as well as SMEs. The ticket size of these loans can range from Rs. 50,000 to Rs. 10 crores, depending on a customer’s credit profile, individual requirement, collateral provided as well as the loan product.

What are the services you offer, particularly when it comes to small businesses?
Saurabh Jhalaria: Our product portfolio includes personal loans, education loans, and two-wheeler loans, and SME business loans. For small businesses, we offer working capital loans of up to 12 months, collateral-free term loans of up to 36 months, secured business loans of up to 10 years .

What is the loan disbursal amount and number of customers you have served since inception?
Saurabh Jhalaria: We have disbursed loans over 3000 crores till date while serving a total of over 2,00,000 customers since inception.

It is said InCred is LinkedIn's most sought after start-up. Please give our readers the details.
Saurabh Jhalaria: Late last year, LinkedIn released the list of 25 most attractive startups in India for working professionals. This was based on LinkedIn’s proprietary data that ranged from employment growth and engagement to job interest and attraction of top talent. InCred, being one of the finest employee- and customer-centric fintech player, was a part of the list.

Who are the major investors which showed interest in InCred's first round of investment?
Saurabh Jhalaria: Our initial investors were Anshu Jain, Ranjan Pai (Manipal Group), Alpha Capital, Paragon Partners, Dalmia Enterprise Holdings, Investcorp (IDFC Private Equity Fund) among others.

What is the current loan book value? And what about your overall presence in India?
Saurabh Jhalaria: We currently have Rs. 1750 crore in AUM (assets under management). Over the due course of time, we have expanded our business footprint to all tier 1 cities, focusing on penetrating some of the untapped tier 2 cities where business potential has been identified to be significant.

Please tell us about the MSME sector financing scenario in India at present.
Saurabh Jhalaria: The MSME sector has considerable potential as India grabs the global economic spotlight. India’s improved diplomatic connections with major economies have also added to the prevailing business opportunity. Further receiving a push from GST and digitization, the local market has also opened up brilliantly for MSMEs. However, the only stumbling block for them at present is the lack of capital availability. This is preventing them from tapping the prevailing opportunity and achieving their true business potential.

The Indian MSME sector has a credit requirement of $370 billion, out of which, only around $139 billion is being met by banks and larger NBFCs. This has left a credit gap of more than $230 billion which has given an opportunity for new-age NBFCs such as InCred and in collaboration with Fintechs to address and tap the market.

What are your future plans?
Saurabh Jhalaria: We are currently consolidating our market position amongst existing geographies while bringing more tier 2 cities under our ambit. Building a differentiated product using technology and analytics across verticals and gaining the edge in the market is crucial for our success along with risk monitoring and containment.