In an exclusive interview with SME Times, Nitin Sharma, Chief Product Officer & MD – SME Business, CredAble said that credit and cash flow management remains the biggest roadblock for growth of SMEs and UpScale will help to bridge this gap.

Excerpts of the interview…

Please tell us about CredAble and its entrepreneurial journey.

Nitin Sharma: CredAble was founded in 2017 with a mission to solve working capital challenges for India Inc. using technology-enabled solutions. We have stayed true to our core beliefs and have been reimagining working capital financing for over 100,000 companies ranging from large, mid, emerging corporates, MSMEs to renowned financial institutions.

In the last four years alone, we have enabled more than $2 billion annually in working capital for enterprise ecosystems and SMEs in the country.

We treat our clients as partners and are invested in helping them drive exponential growth and pursue strategic investments. Our platform offers value-added financing solutions and hosts over 50 corporate customers, and 25 large financial institutions and banks.

Today, CredAble is India’s largest platform for enabling working capital and we’re at the forefront of shaping the future of working capital management.

What was the idea behind launching UpScale?

Nitin Sharma: In our journey of transforming the working capital landscape in the country, we’ve helped fuel growth for businesses both big and small. In our interactions with them, we realized that working capital financing remains a challenge for most businesses, especially SMEs. The absence of an efficient cash flow management system is the primary reason why small businesses end up in a cash crunch. We’ve seen how increased liabilities or even expenses arising from downright emergencies could end up slowing down business growth at critical points.

These problems require best-in-class technologies that solve both credit and cash flow problems simultaneously.

Building a more supportive overall environment for SMEs is critical to ensure supply chain resilience, business continuity and the recovery of the economy as a whole.

This is why we built UpScale — we work with a robust tech stack to roll out scalable products and growth tools designed to cater to the diverse needs of today’s SMEs.

Nitin Sharma: UpScale’s all-inclusive solution is built to bridge the gap between finance and opportunity.

We understand that for SMEs today, credit and cash flow management remains the biggest roadblock for their growth. In recent years, we’ve seen many FinTechs come up with solutions catering to the banking, payments and other financial services needs of businesses. Having said that, credit has always been left out from their solution suite.

We wanted to do something about it - using our vast experience and expertise in this field, we’ve built an integrated platform that helps businesses tackle credit and cash flow challenges simultaneously.

UpScale gives businesses a 360° view of their financial health and operations and helps them make more informed and smarter financial decisions.

By syncing in accounting and transaction details through an accounting software like Tally and enabling businesses to connect multiple bank accounts in one place — UpScale provides a detailed yet intuitive look at the overall financial position of a business.

With an all-in-one platform, businesses can manage banking, accounting, and payments on a single dashboard and get instant access to collateral-free working capital. UpScale removes the hassles of switching between platforms to manage finances.

By automating credit and cash-flow management, we’re saving time for business owners and helping them focus on what’s more important - growing their business.

From early payment programs to receivables funding, just-in-time financing, and smart reconciliation capabilities, we’re simplifying financial management for SMEs like never before!

Nitin Sharma: Today, SMEs in the country are plagued by financial constraints due to a broken cash flow and credit management system. They are dealing with a manual, cumbersome not to mention time-consuming reconciliation process.

SMEs are also currently battling a liquidity crunch due to the staggering effects of the pandemic. This is further curbing their growth and limiting them to low revenue streams.

All this is to say that it has become imperative for SMEs to fast-track digital transformation. In times like these, technological interventions are paramount in helping SMEs successfully manage their cash flows. You need to plan in advance to prevent cash crunches from occurring and the only way that’s made possible is with the adoption of digital tools.

SMEs are now realizing that adopting the right technology and tools is crucial for the future of their businesses. Owing to the pandemic, most offline and traditional businesses have already reaped the benefits of investing in digital solutions. They have identified that manual systems are one of the biggest inhibitors for business growth.

Innovative digital tools, like UpScale’s AI-powered technological solution, will not only give SMEs greater visibility and control over their cash flow but also help them make informed financial decisions about the business.

With capabilities to serve even traditional businesses who may be primarily functioning offline, we have plans of penetrating into the local markets so that smaller businesses can leverage this platform and take their business to the next level.

Nitin Sharma: There have been many attempts to mobilize credit and fund the SME sector in India — most of which have failed to address the biggest pain point that SMEs face. Talking to business owners across industries, we’ve realized that there is a dire need for a centralised cash flow management system that equips them with the knowledge of ‘when and how’ they could access the credit that they need.

While MSMEs contribute to nearly 30% of the GDP, they are largely starved in terms of credit — with only 16% of MSMEs having access to formal credit.

One thing is for certain — there is a rising need to create inclusive growth for these small businesses. With depleting cash reserves, MSMEs need to fast-track digital transformation to make informed financial decisions about the business.

New-age companies are now simplifying access to working capital and supply chain financing. FinTechs on their part, are building proprietary lending solutions that are tailored to meet the growing needs of businesses in India.

Over the last few years, we have been focused on enabling growth and financial inclusion for SMEs and MSMEs in India. In September 2021, we disbursed Rs 3,500 crore to more than 100,000 small businesses and we’re gearing up for higher disbursements in the coming months.

Innovative digital solutions like UpScale will not only help SMEs gain greater visibility and control over their finances but they will also get instant access to collateral-free business loans in minutes.

What do you think about the monetary policy review of RBI recently?

Nitin Sharma: While RBI’s Monetary Policy Committee (MPC) is closely assessing the current economic scenario, the key interest rates i.e., the repo rate and reverse repo rate are likely to remain unchanged for now, at 4% and 3.35% respectively.

That said, in a bid to tackle the surplus liquidity in the system — in FY22, the MPC is expected to change its accommodative stance and introduce a phase-wise increase in the interest rates.

Doing so can have adverse effects on the country’s GDP. With higher interest rates and tighter lending standards in play, MSMEs will cut back on making strategic investments, which will end up slowing down productivity and economic growth. With lesser disposable income, consumers will also look to save rather than spend. With all this, the GDP is bound to take a hit. The way we see it, for the betterment of the MSME sector and the economy as a whole, introducing a sectoral policy rather than a general policy is the need of the hour.

Nitin Sharma: At CredAble, we are driven to deliver maximum efficiency and provide a unified experience across the board. By catering to the unique needs of every stakeholder that is involved in the process, we’re solving the working capital problems in the country, one business at a time.

We’re looking to tap into the massive potential of making financial management that actually works for 63 Million MSMEs in the country with our integrated credit and cash flow management platform.

Our plan for the future is to become the go-to app of credit and cash flow management for businesses in India. While we’re gaining ground and are working towards establishing a strong foothold in the market, we’re also building our existing product suite with additional offerings to cater to the rising needs of businesses across various industries.

We aim to help SMEs manage finances better and scale faster. In our efforts to offer a more holistic solution for businesses, we will be integrating other scalable FinTech products into our solutions suite.