Flipkart Pay Later Sees Double-digit Growth in

 Flipkart Pay Later Sees Double-digit Growth in Customer Base; Crosses 42 Million Transactions on Flipkart

• Flipkart Pay Later aims to scale customer growth by 2x in the next six months
• Beauty & General Merchandise, Home and Lifestyle were leading categories for the adoption of Flipkart Pay Later

Flipkart, India’s homegrown e-commerce marketplace, plans to expand its Flipkart Pay Later credit offering, targeting a 2X growth over the next six months. Currently, there are over 2.8 million customers who have adopted Flipkart Pay Later and have made more than 42 million transactions on the platform to date. Owing to the growing reliance on digital payments, Flipkart Pay Later has seen a 70% adoption rate among customers at the time of check-out and plans to cross the 100 million transaction benchmark by the end of the year. 

As digital adoption continues to increase across the country and customers seek value-driven credit options, Flipkart Pay Later has seen an increase of over 50% in the number of registered users as of July 21 in comparison to the previous year. Customers have used the offering mainly for purchases across categories of beauty and general merchandise, home and lifestyle. In fact, in categories such as lifestyle, Flipkart Pay Later has exceeded the credit card transactions, making it the top prepaid instrument used by consumers for the category.

Ranjith Boyanapalli, Head – Fintech and Payments Group at Flipkart, said, “As a homegrown platform, enabling accessibility and affordability for customers is at the heart of all our offerings. The success of Flipkart Pay Later so far has shown the benefits that the construct is able to provide to millions of customers and made us confident of its market-readiness for a much wider adoption - both on and outside Flipkart Group’s platforms. By expanding the offering, we want to enable customers across the country to fulfil their shopping needs in a seamless and hassle-free manner.” 

According to a recent TransUnion Cibil-Google report, small-ticket lending has gone up from 10% in 2017 to 60% in 2020. Customers are increasingly relying on fintech players for their credit demand which has further been accelerated during the pandemic. With this in mind, Flipkart plans to expand the reach of its ‘Pay Later’ construct to make credit available not just on Flipkart’s platform but on other partner channels as well.

Flipkart Pay Later offers its customers convenient and affordable credit solutions for their shopping needs. It is a 30-day credit product that does not have an interest fee and offers bank-grade security without an OTP for most transactions. It has end-to-end digital KYC, a seamless checkout process for items priced up to INR 10,000, and a single-click payment mechanism that eases the customer’s purchasing journey.

SIDBI and TransUnion CIBIL launch MSMESaksham

SIDBI and TransUnion CIBIL launch MSMESaksham

 – A one-stop knowledge platform for MSMEs

In order to support the revival of India’s economy and strengthen MSMEs, Small Industries Development Bank of India (SIDBI) in association with TransUnion CIBIL has launched MSMESaksham - a comprehensive financial education and knowledge platform for Micro, Small and Medium Enterprises (MSMEs). This unique one-stop knowledge portal will guide MSMEs seeking seamless and quick access to finance while also supporting entrepreneurs towards managing their credit obligations.

MSMESaksham aims to guide MSMEs across their credit lifecycle, from availing credit to start and grow their businesses, to managing credit lines to sustain and build structural strength of the business, as well as ensuring timely closures and renewals of credit facilities. Focused on two key pillars of financial knowledge and access to credit, MSMESaksham leverages SIDBI’s extensive network of MSMEs as well as information and insights from TransUnion CIBIL to create an educational ecosystem that can help build structurally strong MSMEs.

Speaking at the launch of MSMESaksham, Shri Mohammad Mustafa, IAS, Chairman and Managing Director, SIDBI said, “As MSMEs are gearing up to emerge out of present challenges, we realize our crucial role of being harbinger of reliable and trustworthy information and seamless credit access. SIDBI is happy to partner with TransUnion CIBIL in empowering MSMEs by making them financially aware and loan-ready so that timely and affordable financial support is realised. This aligns with our Mission Swavalamban wherein we are targeting youths to imbibe entrepreneurship culture. MSME Saksham being a digital platform aims to facilitate and strengthen credit information availability for MSMEs, pan India. The large-scale credit infusion to MSMEs under the Emergency Credit Line Guarantee Scheme (ECLGS) of AtmaNirbhar Bharat program is a very promising opportunity for MSMEs to access financial support for bouncing back and taking next leap confidently.”

Shri Rajesh Kumar, Managing Director and CEO of TransUnion CIBIL, said, “Empowering MSMEs is vital for economic resurgence and we are committed to supporting the credit industry, government and the MSMEs themselves with insights and solutions to enable them to transact with confidence. While we are supporting banks and credit institutions with solutions to drive faster and digitalized access to credit for MSMEs, we are also extending guidance and enabling access to CIBIL Rank and commercial credit report for the MSMEs. With the launch of MSMESaksham, we strengthen our commitment to empower MSMEs and help develop a productive ecosystem conducive for resurgence and sustained growth of the sector. MSMESaksham is a single destination for MSMEs to access a wealth of helpful financial information and tools – Government schemes and interventions, access to their CIBIL Rank and Score, loan offers from banks and above all a comprehensive knowledge hub encompassing business insights and learning modules about credit and creditworthiness.”

The COVID-19 pandemic has further been detrimental to MSME businesses with newer hurdles like reduced cash flows and a dip in market demand. Credible access to guidance on maintaining financial discipline is critical to help MSMEs achieve long term stability and sustained business growth. Managing credit well and building a good CIBIL Rank is essential towards creating a structurally strong business.

Highlights of MSMESaksham

1.      Available in two languages – English and Hindi        

2.      Consolidated list of all GOI and State government schemes and interventions launched to help MSMEs

3.      Knowledge Hub with informative articles, how-to infographics and videos, and business insights to help entrepreneurs and business owners start or grow their businesses

4.      Business Insights and MSME Resources showcase credit trends and regional insights

5.      A seamless credit journey with all the necessary tools:

·         CIBIL Score & CIBIL Rank to help MSME owners understand their company’s credit profile

·         Special loan offers for MSMEs

6.      Help Centre and Events calendar with frequently-asked questions about credit and CIBIL Score and CIBIL Rank, MSME news snippets and the latest announcements

For more information, please visit https://www.msmesaksham.com

MSME credit continues to have lowest rate of

MSME credit continues to have lowest rate of default in commercial lending

Structurally stronger MSMEs most eligible for financial assistance for refueling growth

The latest edition of the TransUnion CIBIL-SIDBI MSME Pulse Report reveals that the default rates across all the MSME segments continue to be lower than those of the large corporates. In Jan’20 the non-performing assets (NPA) rate for large corporates was at 19.7% while the NPA rate in the MSME segment stood at 12.5%.The total on-balance sheet commercial lending exposure in India stood at ₹64.45 lakh crores as of Jan’20 of which the MSME segment holds ₹17.75 lakh crores credit exposure. Within the MSME segment, Micro segment borrowers (aggregate credit exposure <1cr) observed robust fresh credit disbursals worth ₹92,262 crores in CY 2019.

Finding and funding the good MSMEs

This edition of MSME Pulse covers a study conducted on the assessment of the structural strength of MSMEs and classifies entities that are positioned strong to tide over the pandemic situation. Structurally stronger MSMEs are expected to be in a position of low leverage and high liquidity prior to the pandemic situation. CIBIL MSME Rank (CMR) and credit utilization of MSMEs are used to identify and map the position of MSMEs. This hypothesis is back-tested under two scenarios – the first being the Goods and Services Tax (GST) implementation period starting Jul’17 while the second covers the period starting Jul’18 which includes NBFC liquidity crunch and MSME credit growth slow down post Mar’19. By mapping the CMR and credit utilization of MSMEs during these two scenarios, we are able to understand their position before they entered previous disruptive phases and track their performance in the subsequent 12 months. This can the help predict the ability of entities to continue to remain stable and weather the current pandemic situation.

Speaking on the insights from this study, the MD and CEO of TransUnion CIBIL, Mr. Rajesh Kumar said, “The findings of the study make the case that structurally strong MSMEs are better positioned to survive the current pandemic situation and emerge stable. These MSMEs are the most eligible to receive financial assistance from credit institutions. There is an opportunity here for banks and financial institutions to identify and fund these entities and build a healthy portfolio. Such targeted interventions can help refuel the economy through these unprecedented times while ensuring that portfolio risk is under control.”

“TransUnion CIBIL is committed to supporting the credit sector, the regulator and the government with rich insights and solutions towards the formulation of judicious policies to drive access to finance for MSMEs, while ensuring the stability of credit portfolios and navigating the economy back on the growth track,” added Rajesh.

While the impact of the lockdown may be more pronounced than that of the earlier events simulated in the analysis, the core essence of the simulation study highlights the attributes to identify stronger MSMEs and their lower likelihood of getting impacted by the financial pressures of the pandemic situation. The findings of this study on the position of MSMEs prior to current lockdown, conclude that almost two out of three MSMEs entered this lockdown with structurally strong positions of which about half are very strongly positioned.

Micro segment emerges as a promising growth driver

Findings from this edition of MSME pulse indicate that on-balance sheet exposure across most sub-segments of MSME lending has reduced in the last few quarters, however micro segment (aggregate credit exposure <1cr) is emerging with fresh disbursals to the tune of ₹92.3K crores made to this segment in the calendar year 2019.

Public Sector Banks (PSBs) and Private Banks have roughly equal share in new credit disbursed to the Micro segment borrowers. However, when looking at granular segmentation then the Very Small segment (aggregate exposure <10L) is dominated by PSBs and the Micro-2 (aggregate exposure 50L to 1CR) is dominated by Private Banks.

Fresh disbursals in the Micro segment are also observed across states. The top 15 states account for over 80% of total credit disbursals in 2019, by amount. Maharashtra and Tamil Nadu together account for over 1/5th of the fresh disbursals. The highest rate growth in fresh disbursals in 2019 over 2018 was observed for Rajasthan, while lowest growth happened in Odisha, among the top 15 states.

The NPA rate for the Micro segment at 9% has been lower than the Small and Medium segments which was at 11%. NPA rates are highest for medium sized MSMEs at 18% across all lenders.

“The Micro segment can be the next growth driver for the economy and credit institutions must capitalize on this opportunity by identifying the Micro segment entities that have stood strong through the past disruptions and fund them during these times. Banks and credit institutions can play a pivotal role in fortifying the MSME sector and revitalize the economy by making astute lending and policy decisions based on sectoral data insights,” observed Mr. Mohammad Mustafa, Chairman and Managing Director, SIDBI.