This Startup Is Hastening Digitization For MSME Sector
The Bengaluru-based Saas company Khatabook has been supporting MSMEs in its digitization journey with its ever-evolving range of products
The micro, small and medium enterprise (MSME) sector. MSMEs are a crucial part of the economic and social fabric of the country, and complete recovery will only be possible with high-intensity and strategically structured support to this high-spirited sector. Therefore, it is essential to stabilize the sector by meeting the immediate challenges of cash flows, wages, pressing creditors, and perhaps more important challenges of finding where growth lies, in realizing its true potential.
As the pandemic continues to trouble the world, especially the developing economies, there is a renewed appreciation of the fact that MSMEs need attention, care, nurturing, and rejuvenation, failing which, the world order of business, commerce, economics, and livelihoods will crumble and wither, in no time.
The MSME sector is widely acknowledged as the growth engine of the country’s economy, contributing over 30 per cent of the economy both in GDP and employment generation. The COVID pandemic had a severe untoward impact on the entire MSME sector in the country. In the given situation, it is necessary that there should be revival measures to support them.
The recent surge in MSME registration and incorporation of digital innovation into their businesses is an encouraging indicator of the resilience of MSMEs despite the pandemic.
India’s economic landscape is defined by its micro, small and medium enterprises (MSMEs). However, the sector is based on obsolete technology, which hampers its production efficiency.
With India’s goal of inclusive development, enhanced livelihoods and the notion of ‘vocal for local’, e-commerce marketplaces for the MSMEs become more significant.
With its ability to accelerate businesses, e-commerce could be a means for Indian MSMEs to unlock global value chains.
Moreover, automation in the production process for greater efficiency and availability of more channels to MSMEs to provide access to greater markets is the need of the hour.
The Bengaluru-based Saas company Khatabook has been supporting MSMEs in its digitization journey with its ever-evolving range of products. This is crucial as going forward, MSMEs would need to cater to consumers that are largely using online channels to meet their needs.
Through sheer resourcefulness and determination, a large number of MSMEs have been able to navigate past the challenges that come with disrupted supply chains, working remotely and optimizing costs while improving efficiency.
Khatabook chief executive officer and co-founder Ravish Naresh told Entrepreneur India, “Our goal at Khatabook is the end-to-end digitization of business processes for MSMEs. We want to digitize every workflow within the small businesses in India. For that, we built digital solutions that cater to the unique needs of millions of Merchants across India and are designed to fit into their digital usage behavior. We started our journey with the Khatabook app by digitizing bahi khata (ledger) and addressing the challenge of credit recovery for MSMEs. Today we have created a complete digital ecosystem for MSMEs by providing solutions for the various business management pain points.”
“The flagship Khatabook app is a digital ledger and finance management platform and currently has more than 8 Mn monthly active users. Khatabook app's user base is present in almost every district of India. Pagarkhata by Khatabook is a staff management platform for businesses to help merchants digitize staff attendance, payroll, wages, send automatic updates of attendance, leaves, payments, bonuses, work-timings, etc. seamlessly. Over 2.5 million businesses across the country trust Pagarkhata for their staff management needs. We have a Cashbook app for those who want a digital solution for only cash handling and tracking. Cashbook helps with cash sales and expense management. While it is available as a feature within the Khatabook app, we have a full functionality exclusive Cashbook android app. Recently, we acquired Biz Analyst, a leading SaaS business management solution integrated with Tally ERP9 ecosystem to offer premium value-added services where users can avail on-demand access to sales and purchase reports, bank balance, livestock updates, and other MIS reports, thus allowing a bird's-eye view on their business operations,” Naresh further shared.
All the apps have user profile synergy with more than a third of the flagship Khatabook app's user base. With this digital portfolio, the company is not only digitizing various functions for MSMEs but also digitizing the entire MSME value chain by providing solutions catering to small retailers to large retailers to wholesalers, distributors, and even manufacturers.
He believes that the true impact of digital in shaping up the future will come from how 'new to the digital' user base engages with digital platforms. More than half the MSMEs in India operate in rural areas. The digital reliance and skills in rural India are very different from that of urban areas. While a significant part of the MSME segment is lagging behind in adopting digital, it is partly because technology innovations were never centered around the digital needs of users from the hinterlands of Bharat.
Founded in 2019, Khatabook today is available in 13 languages and has over 10 million monthly active users.
The company has more than 10 million monthly active user bases across its platforms. The userbase on the Khatabook platform is increasingly becoming a strong indicator of the performance of the MSME sector in India. The company is recording more than $185 billion worth of transactions on the platform.
“Remaining committed to India’s MSME segment, we will be adding services to streamline and simplify business processes for the merchants and offer more customized services that benefit this segment. We believe in the power of digital solutions transforming the lives of millions of people. On the business side, the first two and half years in Khatabook’s journey have been all about achieving growth. In our next phase, we will be focusing on monetization through value-added services and freemium options,” he further shared.