SMB – Dutch Uncles

Progcap, Digitising Access to Credit to Underserved Retailers

Anju Nambiar — Wed, 30 Jun 2021 03:35:04 +0000

Who are ProgCap?

ProgCap is a New Delhi based Fintech start-up and a ‘last-mile retail financing solution provider’. ProgCap’s co-founders are Pallavi Shrivastava and Himanshu Chandra. The company has its in-house fintech product targeted at the ‘small Indian retailer’ market. They act as a financier for the SMB (small and medium-sized business) community. ProgCap has recently raised $25 M in a Series B investment round backed by Tiger Global and Sequoia Capital India.

What Led to Its Inception?

The start-up was conceptualised when one of the founders of ProgCap became aware that credit and working capital access was completely non-existent in the retailer segment. The solution was soon found in ‘well-structured financing products’ and the market opportunity was found to be 15 million retailers valued at $800 B.

ProgCap’s Goals and Vision

The company holds a vision of ‘building a full-stack digital platform for last-mile retailers. It also wants to become ‘the first full-stack retailer-focused digital bank to facilitate capital flow across the supply chain’ so that disadvantaged retailers can get access. ProgCap aims at making its impact and presence felt across 5 million enterprises by the end of 2023.

Learnings, Insights and Takeaways for Fintech start-ups

ProgCap discovered an untapped market with a massive potential thanks to their keen eye. It helped them to uniquely position themselves with a unique product. By addressing the challenges faced by small retailers who contribute a sizeable chunk to the Indian retail Industry, they found the opportunity to fill large shoes.

They brought innovation into a neglected market making them a particularly important entity for their target consumers. The collateral free loans availed by small retailers through ProgCap are immensely beneficial for their financing needs. ProgCap’s success can be attributed to a promising vision, strong capability and the support of its ‘outstanding portfolio quality’.

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The solution was soon found in ‘well-structured financing products’ and the market opportunity was found to be huge (15 million retailers valued at $800 B).

What’s in it for me?

Small businesses in India need a leg up when it comes to financial assistance. There’s ample room in the fintech space for innovative solutions by start-ups. Fintech start-ups stepping into this space can partner or collaborate with small finance institutions to fulfill working capital requirements of small businesses. Supply chain finance is a profitable segment in the lending business, and your fintech product can help digitise the process. The main problem for small businesses especially in the retail and supply chain segment is that they are located in geographies which are inaccessible by small financial institutions and their branch networks. Your fintech product can serve as the digital bridge to unite the two entities.

On another note, if you are a retail small business, you can digitize your supply chain through ProgCap’s services. If you are new to the retail business and new to the world of credit as well, you can skip the bank and head straight to ProgCap to raise ‘last-minute capital’ with ease. You will experience flexible repayment options tailored to your cash flow. ProgCap has an interesting portfolio of services that you can look into such as ‘transaction tracking’ and digital payments.

The post Progcap, Digitising Access to Credit to Underserved Retailers appeared first on Dutch Uncles.

How Does A Payment Gateway Work For Small Businesses?

Aakash Sharma — Thu, 18 Feb 2021 00:35:04 +0000

Finding a payment gateway for your business, especially if you are a small business, depends on several factors, including money consolidation, currency support and proactive customer support. However, the right gateway is the one that makes it easy for your customers to pay for the services/products in a hassle-free manner. However, most businesses find it challenging to decide which gateway to use for their business.

So let’s start with understanding the payment gateway.

What Is A Payment Gateway?

A payment gateway is a trade service offered by a fintech payments application provider that enables the processing of credit for e-commerce businesses, online merchants, bricks and mortar stores, credit cards, etc. Banks also provide the payment gateways to their customers and offer it as a payment service provider for specific financial services. The payment gateway facilitates payment transactions through different channels (for example, a website or a mobile phone) and a front-end market processor or bank.

Why Does A Business Need A Payment Gateway?

While many people wonder why a payment gateway is necessary if it only plays an intermediary role, it is essential to note that online payments are undertaken without the seller actually present to ensure a secure transaction. In e-transactions, the customer’s debit or credit card cannot be physically carried to the seller’s point of sale terminal, as is usually the case when paying at a physical store. Therefore, the business owner can only trust the customer’s card details on behalf of the online gateway. That’s where payment gateways come in.

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Finding a payment gateway for your business, especially if you are a small business, depends on several factors, including money consolidation, currency support and proactive customer support.

Security – A Fintech Priority

Payment gateways ensure that the card used by the customer for payment is actually theirs and valid. With online transactions, the risk of fraud is significantly higher, and this is where the it serves the purpose. When payment gateways aren’t being used, scammers have easy access to processed card information, exposing a business to fraud and billing cancellations. Additionally, scammers can find other ways to initiate illegal transactions, expose a business owner to even greater fraud, and damage brand reputation.

The payment gateways are the administrator of the customer’s payment information. For online merchants, a payment gateway provides information on other merchants, recipients, and issuing banks that use data encryption to prevent unwanted threats from sensitive card data. In addition to managing fraud, a payment gateway also protects merchants from expired cards, insufficient credit, closed accounts, or exceeded credit limits.

Payment Gateways Available In India

RazorPay: It is a payment solution that allows businesses to accept, process, and issue payments. This unicorn fintech has clients such as Nykaa, Hotstar, Grofers, Zoho, Udacity, Mercedes-Benz and others.

PayU Money: It is the largest payment gateway in India guaranteeing lower prices for gateway services. The company does not charge any installation or maintenance costs.

MobiKwik: MobiKwik has gained immense fame in India due to its versatility as it offers solutions for individual users and small businesses in a secured environment.

Stripe: Stripe is a technology company that builds economic infrastructure for the internet. Businesses of every size—from new startups to public companies—use their software to accept payments and manage their businesses online.

The post How Does A Payment Gateway Work For Small Businesses? appeared first on Dutch Uncles.

SMB and SME Cloud Adoption in India

Aakash Sharma — Thu, 11 Feb 2021 12:35:03 +0000

As the COVID-19 pandemic shook the world, we were completely unprepared for its impact. Business operations came to a standstill as governments across the globe-imposed lockdowns to stop the coronavirus from spreading. And small and medium enterprises suffered the most due to those shutdowns and lockdowns.

SMBs & SMEs – Engines of India’s Economic Growth

Small businesses and enterprises are the backbones of the Indian economy. As of 2019, they accounted for over a third of India’s GDP and employed around 110 million people. These figures make the sector one of the most important ones. However, while SMEs are the engine of economic growth in India, they are also more vulnerable to disruption than their larger partners. It is, therefore, imperative for SMEs to develop a solid business model.

NASSCOM’s Report on Cloud Adoption Trends Among SMBs

NASSCOM published a report analyzing the trends in cloud adoption by small and medium enterprises in India. This analysis included information on application maturity, drivers, application challenges, and SME technology opportunities.

The report shows how small and medium businesses use the cloud of digital transformation as a catalyst for boosting operations. It includes 17 case studies showing how SMEs used the cloud for scaling, from scaling operations to collaboration between widely distributed teams, simplifying the technology architecture, ensuring business continuity and more.

As India is gradually inching towards complete digitalization, businesses of all sizes, be it large, medium, small or micro, are also moving towards advanced technology. And the COVID-19 epidemic has only increased the process of digital transformation across all arms of businesses.

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Small businesses and enterprises are the backbones of the Indian economy. As of 2019, they accounted for over a third of India's GDP and employed around 110 million people.

Cloud computing is a fundamental technology in any digital move, and its adoption can help SMBs and SMEs become:

More flexible in increasing their global competitiveness, and

Better to deal with disorders (such as the current epidemic).

SMBs and SMEs Are Increasingly Adopting the Cloud Tech

More than 60% of the SMBs surveyed by NASSCOM have already adopted the cloud with varying degrees of maturity. As technology-driven segments are on a higher side of adopting cloud computing, Media and Entertainment, Retail, Automotive, Healthcare, and other sectors are also adopting cloud technology overwhelmingly.

COVID-19 has accelerated cloud adoption for small and medium businesses as businesses seek continuity and collaboration in unstable circumstances. Cloud computing is a powerhouse for collaboration and conferencing tools, marketing and security tools, and managed services, thus delivering to businesses and helping them survive.

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