SME Times News Bureau | 10 Aug, 2021
an exclusive interview with SME Times, Cashinvoice Founder & CEO Arun
Poojari said that despite the launch of recent schemes for the MSME sector, there still remains room to do more as
much of the fiscal benefits are in the form of loan guarantees, and not direct
Excerpts of the interview…
our readers about Cashinvoice and its entrepreneurial journey.
Poojari: SMEs are critical for
economic growth because they create jobs and stimulate local manufacturing. In
an economy, a robust SMEs sector is a catalyst for driving innovation, domestic
demand, long-term economic growth, and inclusive growth. Thus, it’s imperative
to ensure a seamless capital flow to avoid a credit gap in the economic
structure. With this vision, Cashinvoice was launched in December 2018 and is
built by experts with dynamic experience of over 30 years in the SME Lending,
Corporate Finance and Supply Chain Finance (SCF). Our team has robust
technological expertise backed by deep domain knowledge to offer end-to-end
digital solutions to serve small businesses.
We connect SMEs and their
corporate clients and the trade ecosystems to provide digital and affordable
access to credit against payables and receivables. An easy alternate financing option for both
Corporates as well SMEs, Cashinvoice has been able to turn the entire
invoicing, discounting and payments system into an incentivised model that provides
perks to all. With the growing
need and importance of alternative digital lending, especially observed during
the second wave, today it is one of the fastest-growing start-ups in
the supply chain financing sector, with over Rs. 2000 crores worth of
throughput volume and 5 lacs + invoices under their belt in FY 2020-21
alone. Our list of clients includes some of the biggest
conglomerates in India.
What are the services you provide?
Poojari: New age fintechs like supply chain financing solutions are redefining
the rules of lending by using alternate transactional data to efficiently
originate, assess and monitor borrowers, thus bridging the trust deficit
between SMEs and lenders. At Cashinvoice, we already have multiple product offerings oriented for SMEs and Corporates. We
have designed product offerings serving each link of the Supply Chain Financing
right upto the last mile – small businesses. Some of our offerings include
Digital Factoring, Inventory Funding, Retailer Funding etc.
How helpful is your service to SMEs?
Poojari: What multiple waves of COVID have taught us is the feeble
nature of credit and financing opportunities that lie for SMEs in India. This
is where we come in as a long-term sustainable solution, the supply chain
financing ecosystem has proven to be the silver lining for SMEs facing the
liquidity crunch. There has been a reduction in NPAs and defaults as compared
to projected numbers as SMEs and corporates have whole-heartedly adopted supply
chain financing, especially since the onset of the pandemic. In this scenario,
we are enabling financial inclusion for micro-enterprises through tech-based
processes to build credit insights. Thereby, supporting even the smallest
of SMEs in the long tail of the supply chains which enables them to increase
their turnover and scale up rapidly. We have so far processed over 700,000
transactions accumulating to Rs. 3000 Cr. Digitization of entire processes
which include e-KYC, e-invoice validation, e-signing of documents, etc have
served to dramatically bring down the cost of SCF, especially for small value
What is the present credit scenario in
India, particularly in context to MSMEs?
Poojari: As a recent report by the Association of
Chartered Certified Accountants, the credit availability for the MSME segment
continues to be stressed, with nearly 50.7 million enterprises facing the lack
of access to traditional lending challenges. This represents about 80% of the
total 63.4 million MSMEs in India. The multiple schemes and a fresh round of
economic stimulus package worth Rs 6.29 lakh crores announced on 28 June by
Union finance minister to MSMEs was whole-heartedly welcomed, However, there
still remains room to do more as much of the fiscal benefits are in the form of
loan guarantees, and not direct credit. Many small businesses especially are still underserved as banks still
shy away from lending to them.
Much of this is owed to the fact that
MSMEs lack financial discipline as expected by the banks. Most of them however
have some really good mitigants that can help us get them the credit support
they require. That’s the area we are trying to make a difference.
Please share your views on RBI's monetary
policy and expected fiscal stimulus by Govt?
Poojari: RBI has been evidently intent on
keeping the interest rates low to support the economy at large. This has helped
many small businesses to improve their margins by reducing their financial
costs. However, RBI has also cut down the growth forecast which is reflective
of the on ground situation. Specifically, from MSME perspective, RBI has lent
Rs. 50,000 Cr to Financial institutions to lend onward to MSMEs. This if
percolated down to the grass root level, should impact the credit flow to the
smaller businesses in a big way.
Additionally, the union government
recently announced Rs. 1.1 Lakh Crore loan guarantee scheme which we expect
largely should be directed at easing the credit to MSMEs.
Please share your future plans.
Poojari: Despite the government
and RBIs efforts towards financial inclusion, many SMEs still struggle to avail
loans from traditional sources like banks and NBFCs. The objective of the team
is to create a difference and make an impact in the SME space by delivering
distinctive solutions to address the working capital needs in the simplest
form. Cashinvoice is
reducing the RoE by bridging the gap between payables and receivables with the
help of digital lending and plans to reach Rs. 10,000 crores worth of throughput
on its platform by the end of 2021. We are looking at a milestone of
helping 1,00,000 SMEs over the next 5 years by meeting their working capital
requirements. 2021 is the
year of economic recovery and we intend to stand by SMEs in every way possible.