Responsible lender ftcash aims to grow 3X in 2023; serve MSMEs beyond metros
ftcash is an RBI-registered NBFC and one of India’s fastest-growing financial technology companies with an aim to empower over 60 million micro-merchants and small businesses by bridging the lending gap with accessible loans.
Headquartered in Mumbai, ftcash was founded in 2015 by Sanjeev Chandak, Deepak Kothari and Vaibhav Lodha. ftcash uses proprietary algorithm to analyse creditworthiness and offer underserved MSMEs, including retailers, pharmacies, garment stores, automobile shops and mom-and-pop stores, with institutional finance. It also creates an open architecture-based platform for merchants to initiate digital payments in less than five minutes by aggregating all payment methods including credit and debit cards, net banking, mobile wallets, UPI and PayPal.
CXOToday has engaged in an exclusive interview with Mr. Sanjeev Chandak, Cofounder & CEO, ftcash
- Please share the growth journey of ftcash since its inception. What are some of your key offerings to small businesses and how is it benefitting them?
ftcash started in 2015 by enabling digital payment acceptance in less than 5 mins anywhere in the country. We were able to make the process of digital payment acceptance “merchant centric” and made it real easy. We are now a responsible lender to MSMEs in the country by combining loans with digital payments. It helps them increase their disposable income and provides them an ability to scale up. A number of them are excellent entrepreneurs but unfortunately have not been able to scale up due to lack of credit. We provide them an ability to dream big and execute on those dreams.
Our AUM has grown by 22X since 2019 despite Covid-19 and we are continuing it by remaining true to our customers. Our products enable the MSMEs to increase their business income while building their credit profile. The fintech and regulatory environment has changed over time but we have been successful by staying focussed on the customer segment and having built a platform that can easily adapt to the environment.
- Please share growth and expansion plans.
We have had phenomenal growth since inception and grew more than 3X in 2021. Our 90+ delinquency rate is less than 4% which is much lower than the market standard in this target segment. This has been made possible because of our proprietary risk management platform called “Daily Health” which manages the credit health of the borrowers post disbursal of the loan.
We have over 60,000 merchants in our network currently and have disbursed over INR 600 crore worth of loans till now. We are planning to grow 3X in 2023 and continue to serve our customers as we ramp up more locations in Tier 1 and Tier 2 cities.
- How does ftcash distinguish itself as a responsible lender?
ftcash ensures that the loans it provides to MSME is a win-win solution for both the borrower and the lender. The borrower should have the capacity to repay the loan while at the same time increasing their disposable income after servicing the loan. It ensures that there is risk-based pricing so that it is fair to different types of borrowers with varying risk profiles.
- How do you think the pilot launch of e-rupee impact end consumers and SMEs?
One of the key developments in the financial world is the introduction of central bank digital currencies (CBDCs) to offer diversified formats of central bank money. With the beginning of the pilot phase of digital rupee, it will be interesting to see how RBI’s new currency will shape up the cross border and local payments ecosystem. The rapid adoption of UPI and QR based payments across the country and across different sizes and types of businesses has proven that India is an early adopter of technology. CBDC will further be a positive step towards the adoption of block-chain for financial services, and will align India with the world that is rapidly progressing towards adoption of digital currencies.
- What are the industry trends that you see in the coming year for the MSME sector?
The MSME sector is the backbone of the Indian economy and employs a lot of people. We expect the sector to grow as the negative impacts due to Covid-19 are almost over. Even though there is a possibility of a recession along with high inflation as seen in the developed markets, India is less impacted because inflation is not very high. Oil prices are a wild card and if they go really high, then it would negatively impact the economy.
Credit demand in the MSME sector has already picked up and we expect that to continue into next year.
- How will digital transformation change the microfinance industry?
With the growth in the availability of mobile technology, digital financial services have also grown in popularity. The scope of digitization for microfinance has significantly expanded and with their prevalence among developing countries, MFIs are on the verge of undergoing a digital transformation.
Mobile payments have enhanced payment efficiency, reduced transaction costs whereas online peer-to-peer lending platforms have boosted credit availability for economically disadvantaged populations.
Besides, digital technology and data will also allow financial service providers to have a customer-centric approach and effectively serve the financially excluded population.
