Strategic Roadmap to Becoming Merchants Focused Digital Bank in 2022

Mar 4, 2022

India’s leading Fintech startup, Khatabook, announced its plan to become a  Digital bank for MSMEs before the end of 2022. This decision is in line with Khatabook’s mission to empower MSMEs with digital business capabilities, resulting in improved business efficiency and incomes for MSMEs. The Financial Services offerings on the Khatabook and Biz Analyst platforms are designed to improve the bottom line for MSMEs. The startup plans to hire 80 people in its lending, payments, and Financial Services teams this year.   

Merchant focused Digital Bank

With the user base spread in almost every district in India, Khatabook intends to become the most accessible Neo Bank platform for Indian merchants. Contributing towards building the infrastructure for better financial access in India, the Khatabook platform will provide digital touch-points to avail and manage credit, savings, and cash flows. Started in Jan 2019, Khatabook has solved the most critical business finance pain point for MSMEs by digitizing their accounts / Bahi Khatas, thereby providing them with better visibility into their cash flows and business performance.

Payments Services & Credit Recovery

Khatabook has built end-to-end payment services on its platform to help merchants send or receive money for their business expenses or revenues. The Collect payment link can be shared by the merchant for settling payment dues with the customers. Recently, an IVR-enabled, bot call reminder feature has been added to further assist merchants with collecting their dues. Users can accept UPI payments from their customers via any popular UPI app through the UPI QR code. The payments services on Khatabook have improved the cash flows for business by 3x. This functionality also extends to salary-related payment disbursements and management for merchants.  

Lending and Deposits 

With the Series C funding announcement in August 2021, Khatabook expressed the intention of enhancing Financial Services on the platform by introducing Lending for MSMEs. The Startup has concluded a successful pilot and is in the process of introducing lending on the App. The Startup is hiring people with specific skill sets, including underwriting and asset management, conceptualising operations and processes, growth and experimentation, new products, risk analytics, risk assessments, and so on. Besides, term loans, the startup also intends to provide various financing options like invoice discounting and supply chain financing for its merchants and their counter-parties on its Biz Analyst platform, so that they can collaboratively manage their capital with efficiency and achieve growth.

Ravish Naresh, CEO, and Co-founder, Khatabook, said, “With our Merchants focused Digital Bank initiative, we aim to solve the lack of equal access to Financial services due to legacy infrastructure. We intend to become the most accessible Neo-bank for the MSMEs in India. The biggest strength of Khatabook Neo Bank is the in-depth knowledge of varied requirements of retailers, suppliers, wholesalers and ensuring customised financial services for each role within the traditional supply chain. Our FinServe portfolio will result in increased profitability and business expansion for our Merchant users.”   

As per Khatabook platform insights, since the pandemic, Cashflows management has been one of the biggest challenges for MSMEs. Short-term loans could significantly keep MSMEs afloat in the period marked by business uncertainties due to external factors by streamlining their cash flows over the year. Considering this, Khatabook has accelerated its plans on providing a Neo banking solution to Indian MSMEs. Leveraging its vast distribution network, Khatabook is confident in building the most accessible Merchant focused Neo-bank.