/ -- In India, there are 6 Crore Small and Medium Businesses (SMBs) contributing to 30% GDP. According to CII, SMBs makes up for 33.4% of the India's output in manufacturing, giving employment to around 12 Crore Indians. When it comes to exports, the SMBs contribution is estimated at about 45% of the total exports.
Even though SMBs contribution is significant for India's GDP, conventional methods and low rate of technology adoption have hindered SMBs to achieve full potential. According to Omidyar Network and BCG report, only 47% SMBs have adopted digital tools for business processes, payments, and online sales, this is 6 percentage point jump after Post GST implementation. It is estimated that digitalisation of SMBs could expand their contribution towards India's GDP by 9 percentage points, which would be effectively close to 45%.
Prime Minister of India Mr. Narendra Modi has set a target of making India a 5 trillion dollar economy, new-age startups, and SMBs will be playing a pivotal role in achieving this target. But the biggest hurdle is the adoption of digital tools and technology for efficient operations and financial management. SMB focused Neo Banks are taking up this challenge for the Democratisation of ERP and Financial services.
Unique Requirements of SMBs:
SMBs are structurally and operationally completely different than corporates. At corporates, where 97% of employees are Graduate and 81% can read and write English, SMBs have a different story. Only 69% of employees are graduates and less than 50% can read and write English. According to Gauravkumar, founder of Neo Bank Ezo, which is backed by Axilor Ventures of Banglore, "Even though 87% SMBs are connected to the internet, only 13% have desktop access. Solutions built for large corporates are built for English competence and Desktop availability. This is the major shortcoming of digital adoption of Indian SMBs. That is why Ezo was strategized on two major features, Mobile-first and Localisation. Ezo Bank's App Is available for all android devices and Web with size less than 5 MB, One can access the app in 10 Indian local Languages apart from English."
Opportunity for Neo Banks:
According to a report by Omidyar and BCG only 23% SMBs use any accounting or ERP software, also only around 33% net credit demand is supplied through business entity name. This is a huge opportunity for Neo Banks. Neo Banks like Ezo and Open are targeting fundamental problems of SMBs like Cash Flow Management, Billing, Payment Collection, Inventory and Customer Management. According to Akash Shah, Founder of Ezo Banks, "Biggest competitive advantage of Neo Banks is breaking the silos of Business Operations and Financial Requirements. Ezo personalizes the operation and financial needs and demands across the SMBs sector."
Technology as an enabler and finance as a booster will work as wonder for SMBs. Sooner or later, Next 4 cr SMBs will have to access these Neo Banks. This will change the course of SMBs in India.
About Ezo Banks:
Ezobanks.com is Mobile First Neo Banking platform for Indian SMEs. Ezo is breaking the silos in operations and financial services to unleash the full potential of SMEs. Ezo is built for emerging entrepreneurs, It is easy, secure and powerful. For more information: https://ezobanks.
Disclaimer: No Business Standard Journalist was involved in creation of this content
