“Takkar mein bahut hain. Par ek bahu hai. Uske aadmi ke party pehle se sarpanch ban chuke hain, rah chuke hain, unko toh aadat pad gayi hai,” (There are many contestants. Though, there is one lady. Her husband’s party has got accustomed to winning. It has become their habit) says Meena Devi. Meena, 29, is contesting — for the first time — from a reserved seat for women in Sarpanch elections for Diwakari village Panchayat in Alwar district, Rajasthan. For some time now, her rival’s family has been winning the powerful Sarpanch post. Meena wants to disrupt this long-held influence. She is pretty optimistic, “I have built a strong foundation. With me are my business (contacts), my name and my husband’s 15 years of social service. We hope to win.” Young, articulate and confident Meena Devi is an example of she-power rising to benefit home, work, and society when given a niche financial technology. What do we mean by ‘niche’ financial technology? Read on.
Challenging the status quo
Three years ago, Meena Devi wouldn’t have been so self-assured and confident — or so she thought. She was running her tiny beauty salon and home-shop selling small fancies and cosmetics to neighborhood women. She was supplementing her husband, Lakshman Singh’s income, who was working as a secretary in a private firm. Like big cities, small towns and villages are no strangers to double-income families. At that time the only recourse available to Meena Devi to access capital for her business was with Self Help Group (SHG) in her village. Women SHGs in India seek to empower women by improving their livelihoods. Typically, a local group of 10–20 women come together to share a common account for their financial needs. Over the last couple of decades, women SHGs have provided social change and women empowerment across the length and breadth of the country. Meena Devi took her first loan of INR 5,000 from her SHG to kick-start her home enterprise but struggled to maintain her business. Her shop did not house the latest fashionables; it was beyond her budget. Also, she knew of no vendors in her proximity to furnish stylish supplies. Her SHG could not offer much information or marketing support — also group meetings started eating into her time that already went into juggling between looking after her children, managing home affairs and business activities . Gloomily, Meena used to see her customers give her shop a miss and travel to the nearby town of Alwar to fulfil their fashion requirements. “I know my customers’ pulse, I can build a profitable business. But where do I get money to earn more money?” thought Meena.
Changing mindset and behaviours
Meena’s husband Lakshman, understood her predicament well. Meena’s business had growth potential. All she required was adequate working capital. He suggested that they get in touch with Bridge2Capital — a fintech platform for small and medium sized-enterprises (SMEs) in small towns of India. He had heard about them from his friend Sher Singh, who owned a pharmacy store and was a Bridge2Capital customer. Sher Singh took him through the first steps on the app. “It’s easy, just download Bridge2Capital mobile app on your smartphone, register with just two documents — your PAN card and Aadhaar. Immediately after verification, within 15 minutes your credit limit account is opened with their partner bank. Simply, add your GST registered suppliers, place your order. Then watch your shop getting filled with supplies! You can repay the credit limit back in easy instalments. Everything is done online, within minutes and by just three taps on their app.”
Initially Meena Devi was hesitant. First, she already had one SHG loan to repay on her head, she did not want the burden of another loan. Second, the process and concept of an online fintech app on her smart mobile phone was alien to her. Thirdly, she was unsure of online transactions. Unfamiliar with the world of digital financing, she found it uncomfortable, as well as disconcerting. Like many of us, Meena found comfort in familiarity. She knew her SHG group members and they knew her. All were from the same locality and from a similar socio-economic background. The SHG group’s related issues notwithstanding, Meena was so used to the system that even when given an alternative to get out of the group structure, she balked. She was accustomed to using paper money, physical record-keeping, filling forms, standing in queues, waiting for authorities, and conforming to accepted norms. This mobile fintech app’s call to change her mindset seemed radically new.
“Should I or should I not enter this unknown zone of digital finance, where people and their business are strangers to me? How will I manage? Can I trust them? Can Bridge2Capital be trusted?” Questions assailed her, yet prodded by her need for funds Meena Devi boldly stepped in where even well-informed men and women of her town feared to tread: the world of verified data-flow based financial transactions — the future of digital finance.
Offering a competitive edge
Meena Devi met Bridge2Capital’s representative Mubarik Khan who explained to her the workings of the app and Bridge2Capital’s process. The app design — simple and easy to use — removed her initial daunting fears of ‘unmanageability’. Next, she observed that Bridge2Capital’s mobile app encouraged online payments and provides proper records of all transactions thus providing her with transparency. Women SHG members generally worry over their money being misused as proper record keeping is generally absent and their low literacy or lack of information hampers accurate record checking [1]. By transacting through Bridge2Capital the earlier mental task of maintaining manual ledgers was eliminated for Meena; all transactions available to check at a click of a button. A transparent process reduced dependencies on social network to borrow money and thus become obliged towards them. Meena also started receiving notifications/information about her credit history and credit worthiness as per the transactions even though her small business is not GST registered while her fellow SHG group members generally lacked credible credit reporting information.
Meena found it convenient to use the app any time from the comfort of her shop or house. “I also liked the fact I did not have to go to any meetings. There is so much to do at home (cooking, cleaning, children) and at shop (customer issues). We women cannot afford to waste time.” Another feature which particularly appealed to her was the app’s invoice financing. Bridgde2Capital has found that at least some women prefer suppliers being paid directly. This helps the women fund their business without the money going through the hands of their husbands — in less educated LMI (Low and Middle Income) families, male members may not be as judicious with managing money as women.
Yet another attractive feature for Meena, unlike her fixed weekly repayment schedule at SHG, was that she could choose her repayment schedule; weekly/fortnightly/monthly. Meena caught on to Bridge2Capital’s core concept: “Every time I repay, my limit is returned to me. Plus on-time repayments increase my credit limit. I can purchase more stock. This way I increased the turnover of my business and income.” Another feature that Meena Devi asked for was her ability to increase or decrease her credit period which varies between 30–180 days. Based on similar feedback from other customers, Bridge2Capital developed this feature for their app.
In September 2018 Meena Devi took her first working credit limit of INR 50,000 from Bridge2Capital. In a span of just two years, her monthly turnover has increased. She now has working credit of INR 1,50,000 and has made an incremental income of INR 4,00,000. Once unsure of digital technology, Meena now gladly pays Bridge2Capital’s annual technology fees and calls for stocks from suppliers based in Jaipur and Surat.
Crossing over with other segments
Like Meena Devi, Deepika Sharma (name changed) a businesswoman in another small industrial town finds Bridge2Capital advantageous. Deepika’s business involves selling women’s cosmetics and intimate clothing. She began by buying goods in cash from unorganized wholesale suppliers. Since receiving working credit from Bridge2Capital, she now buys and sells branded products. She has been able to seek suppliers who are authorized distributors of top brands. Despite the slack in business during the Covid-19 lockdown, Deepika managed to repay her weekly installments.“COVID-19 did affect me as it affected all businesses small or large, from middle class to crorepatis. My business turnover of 3–4 lakhs was reduced to just around a lakh. Still I have loyal customers not curious onlookers. They order via phone or Whatsapp. After receiving their payment online, we manage to deliver.” In the COVID-19 lockdown period she says Bridge2Capital eased things for customers like her by taking interest only. She is now back to business as usual. Over the past 22 months, Deepika has funded invoices valuing over INR 16 lakhs to multiple suppliers. She plans to increase her credit limit to Rs 300,000 during Navaratras [2].
During COVID-19 lockdown, Deepika began utilizing one of the app’s crossover features, Bridge2Pay to receive payments from customers. The User Interface (UI) was simple and the transaction was guided by a YouTube tutorial in the app. Her customers used UPI interfaces such as GooglePay and Paytm and paid online for their purchases, which was then deposited into Deepika’s credit account with the NBFC, which reduced her outstanding principal. For Deepika the realistic flexibility offered by Bridge2Capital was something normally unavailable under the other credit models.
Aiming to protect and encourage small businesses, Bridge2Capital has converged multiple services onto a single platform. It’s triad of digital services — credit, insurance, savings — presents exponential benefits missing in models like SHG.
Making an impact
Another woman who believes in power of individuality is Inderpal Kaur of Chandigarh, Punjab. Inderpal began her small business, Lovely Cloth House, selling suits and salwars material from her home with an initial investment of INR 30,000. “Today, I can proudly say that with my hard work and thanks to Bridge2Capital’s support, in 14 months I have grown from an unknown household shop to a known, large and popular boutique.” In September, Inderpal inaugurated her Lovely Fashion Studio: Her one-stop fashion boutique which will house latest fashion designs, fabrics, artificial jewellery, handbags, jootis, footwear. Inderpal’s business has made transactions of over INR 8 lakhs through Bridge2Capital platform, and her business margins are well over 35%. She says, “I am very happy with services of Bridge2Capital. I ensure to keep my weekly repayment aside, so that, I don’t default.” Inderpal made all her repayments on time even during COVID-19 lockdown. She was one of the first customers to purchase Bridge2Health insurance plan for Rs 200,000 of sum assured to cover herself and her family from health related risk.
Xtracap Fintech, the company which owns Bridge2Capital, believes that accelerating quantity and quality of entrepreneurship towards such benchmarks can create over 30 million women-owned enterprises, 40% of them creating further employment. This can generate potentially transformational employment of 150–170 million jobs, which is more than 25% of the new jobs required for the entire working population age from now until 2030 [3].
Galvanizing women businesses and economies Encouraging entrepreneurship amongst women has a great potential to transform India’s economic and social development. It not only will boost the economy but also deliver transformational personal and social outcomes for the women [4]. We have seen this happen with our three businesswomen. Today, 67 million Indian women are members of 6 million SHGs [5]. The need of the hour is to enhance SMEs businesswomen’s economic and social status, SHG women included, via a simple, niche, online financing tool. An application that can deliver capability, combine with other technologies to create synergy, greatly hike user value, offer productive outcomes and is competitive. Yet, for this tool to be taken advantage of requires a significant change in behavior and mindset. Why? Because at 17% of GDP, the economic contribution of Indian women is less than half the global average and compares unfavorably to the 40% in China. India could boost its growth by 1.5 percentage points to 9 percent per year if around 50% of women could join the work force [6]. As Annette Dixon, World Bank South Asia Vice President said in Mumbai’s Economic Times Forum, “It’s hard to develop in an inclusive and sustainable way when half of the population is not fully participating in the economy.” “We agree,” says Mohammed Riaz, Founder of Bridge2Capital: “Our solution to the problem: Bridge the gap with affordable, accessible, accountable digital financial products via its mobile app. Hopefully, we shall then see many more Meenas, Deepikas and Inderpals claiming their rightful space in home, work and society.” Today 15% of Bridge2Capital’s customer base is women. In the near future, they aim to make it at least 35%-40%. For an evolution to ensue, change is essential: To unshackle, to disrupt and to give way to the new.
References
[1]https://niti.gov.in/planningcommission.gov.in/docs/reports/sereport/ser/stdy_fpss.pdf (Chapter8-Constraints and Problems) [2] A Hindu festival that is celebrated in autumn and spans over nine days. [3]https://www.bain.com/contentassets/dd3604b612d84aa48a0b120f0b589532/report_powering_the_economy_with_her_-_women_entrepreneurship_in-india.pdf [4]https://www.bain.com/contentassets/dd3604b612d84aa48a0b120f0b589532/report_powering_the_economy_with_her_-_women_entrepreneurship_in-india.pdf [5]https://www.worldbank.org/en/news/feature/2020/04/11/women-self-help-groups-combat-covid19-coronavirus-pandemic-india#:~:text=Over%20the%20past%20two%20decades,members%20of%206%20million%20SHGs [6]https://www.worldbank.org/en/news/speech/2018/03/17/women-indias-economic-growth