In an exclusive interview with SME Times Ayekart Co-founder & CEO Debarshi Dutta said that lack of technology, lack of finance and lack of new market reach are the major weakness for the Indian MSME sector.

Excerpts of the interview…

Please tell our readers about Ayekart and its entrepreneurial journey?

Our entrepreneurial journey, since its inception, has been exhilarating and exciting for all team members. We had our share of many bumpy rides as well as smooth sailing in the span of last 8 months while launching the operations on ground and creating mutually advantageous association, financial and business partnerships. And, all the efforts of Ayekart teams paid as we concluded the last financial year with the GTV (Gross Transaction Value) of INR 140 crores approx.

The idea of Ayekart took a shape as we were witnessing like everyone how the pandemic has thrusted technology advancement by almost a half-a-decade in India, making ‘digital’ the need of hour. Everyone started going digital via using mobile, ordering online…from pizzas to daily utilities, attending school and offices… to the transactions of multi millions…shifting almost everything from physical to digital! We as a team observed that there was a huge gap of technology as far as SMEs/ MSMEs/ Retailers are concerned, they were losing their business to E-commerce giants and other aggregators equipped with far superior technology, financially much stronger than SMEs/ MSMEs/ Retailers. Where as all saw this as a threat, we saw this as an opportunity to rebuild traditional businesses, SMEs/ MSMEs/ Retailers. Enabling them with world class technology and finance…giving them digital and financial wings to compete, grow and reach their potential. With core idea of not to disrupt but to enable all key channels right from raw material to end consumer, Ayekart started this remarkable journey.

Speaking about our leadership team, they bring the vast experience of working with Government agencies and MNCs engaged with technology, payment, supply chain, agriculture and food sector in India, South and South-East Asia, parts of Africa, LATAM etc. The team understands the dynamics of traditional businesses and able to translate the ideas on ground.

What are the products and services you offer and how they are helpful to SMEs?

Ayekart is one stop solution for SMEs/ MSMEs/ Retailers right from Finance and technology to service everything needed to survive, revive and thrive on a single platform.

A. Apps: We have developed 3 Apps namely B2B, Hisab and B2C (Hyperlocal). Through our app SMEs/ MSMEs/ Retailers enter into digital space via bringing their businesses online, procure as well as sell the products, have technologically enabled managerial support to run day to day business for e.g., day-to-day business operations, invoicing, inventory management, integration with tally or other account system, access to POS – QR code payment, payroll management, award and rewards program to increase stickiness. The apps offer more benefits like access to world class technology like scan and pay, single terminal for all transactions and business management on an integrated platform.

B. Access to Supply chain finance: Ayekart is trying to bridge the gap into the access to the institutionalized credit for the small businesses, through our banking and NBFC partners. With the supply chain finance these businesses are able to get timely and adequate credit for the working capital and grow their businesses. Furthermore, these digital transactions build their financial credibility as well as credit rating.

C. Service through Ayekart platform: Through our vast network of FPO, manufacturers, food processors, distributors, our associates, partners, and all the stakeholders in the supply chain are able to grow their businesses in new geographical areas. Also, this ensures round the year supplies and markets availability for all of them.

What according to you are the weaknesses and strengths of the Indian MSME sector?

Weakness: In a nutshell, lack of technology, lack of finance and lack of new market reach are the major weakness for MSME sector. In addition, traditional businesses are typically powered by the founder and are run through his domain knowhow and connections, which are informally managed. Employees naturally play the role of running the day-to-day operations on the ground and have very little understanding of business nuances. They typically trust family members to be their first-row lieutenants for diversification and scale. While this model worked very well in the pre-COVID era, digital marketplaces unleashed by large corporates and well-funded start-ups took a significant share of their business by disintermediating the supply chain on both B2B as well as B2C side. This served as a wakeup call for most of them to be prepared for reality.

Strength: Entire world agrees that next 2 decades are of India, and if India has to make it big it has to be MSMEs, thus one thing is clear. MSMEs are going to be backbone of growth of India not only in the economy as a whole but employment as well and in turn of the globe. Below data, facts and figures proves the same.

Circa 2020, the growth of MSMEs has become a top priority in India. According to the 73rd National Sample Survey (NSS), there are about 63.052 million non-agricultural MSMEs in India, of which 51.25% are in rural areas and 48.75% in cities. MSMEs have created 111 million jobs, including 36.041 million in manufacturing, 38.718 million in trade and 36.222 million in services. They contribute to 8% of India's GDP, 40% of the total exports and 45% of the manufacturing output.

What is the credit scenario as per as MSMEs are concerned?

According to International Finance Corporation (IFC), all formal and informal MSMEs in emerging markets face a funding gap of USD 2.1-2.6 trillion, equivalent to 30-36% of the current credit balance for MSMEs. Undoubtedly, MSME loan market is underserved as majority of MSMEs do not have access to organised financial sector and institutionalized credit. And sluggish disbursal didn’t help either thereby increasing their dependency on unorganised sector like, indigenous lender, loan sharks etc. for working capital, hence, making them trapped in vicious cycle of huge debts with impractical credit durations and rate of interests.

Please share your future plans with our readers.

As mentioned earlier in a small time of 8 months we have achieved GTV of approx. INR 140 CR. This is a starter, first baby step, we have tested waters and we know the gap, we have financial, technological tools as well as market expertise to match demand and supply side. Today we are present in 6 states, doing business transactions in 12 states, and soon we will be expanding pan India. We have entered into strategic partnerships that will not only help us in expanding our business but at same time have impact on farmers, and small businesses. Their upliftment is our utmost priority while commercially expanding, also we will not be disrupting the supply chain in a way of by passing one channel to earn more, we believe in enabling all the channels and strengthen them more. Our mission is to

1. Enable 10 million traditional businesses technologically and financially in 5 years

2. Go global providing Platform as a Service (PAAS) to 15 countries in 5 years