The Digital Banker sits down for a chat with Shrinivas Kasar, co-founder of Cashinvoice, an Indian fintech firm unlocking supply chain finance for small businesses.
TDB: What are some of the biggest supply chain issues that Indian businesses face and how is Cashinvoice solving them?
Shrinivas Kasar, co-founder, Cashinvoice: I think the biggest issues are both in terms of friction that exists between a buyer and a seller because of the lack of digital systems. Right from examples of purchase order management to invoice management to payments, as well as financing. Most of these processes are manual right now, so that’s one of the biggest challenges that leads to delayed processing as well as longer working capital cycles. This tends to affect especially the smaller businesses in a manner wherein they have longer working capital cycles and because of that, they’re not able to do more with whatever working capital that they have available. So lack of working capital or shortfall of working capital is obviously the biggest challenge for any small business. And that affects not only the supplier, but also the buyer, which could be medium or large size, because that brings disruption in their supply chain. They are not able to produce as much as they would want to.
Do you work with small businesses or also micro businesses or is it mostly SMEs?
So we are working with businesses of all sizes, but the product is designed in such a manner that it is more likely to be used by smaller businesses, which is micro or small businesses as compared to medium-sized businesses.
Medium-sized businesses have the bilateral banking arrangements for their working capital requirements for their invoice financing requirements. However, micro or small businesses don’t have the documentation required by most mainstream banks. And hence we at Cashinvoice, step in and bridge that gap between what is required by the bank versus what is available with the small businesses by providing the alternate data parts. This could be trade transactions, but also could be about drawing comfort from other aspects of their business, such as, which corporates they’re supplying to, what kind of seasonality their businesses have, et cetera. So we facilitate financing through alternate data for smaller businesses.
How are you differentiating yourself from the rest of the space in the Indian market?
One of the key differentiators between Cashinvoice and some of the other supply chain finances, is that we are an embedded supply chain finance player. We have our supply chain finance products embedded within the corporate systems like ERP systems or the order management systems, much like how there is checkout financing available on Amazon or any other e-commerce portal, we give that kind of a checkout financing option within the corporate systems. The other thing is that Cashinvoice, unlike many other players, is a 360 degree platform, meaning we are offering almost anything that is related to supply chain finance.
What feedback have you received from your clients so far?
The way we have built the platform, we’ve been able to customize it according to our customer’s requirements within a very short time as compared to a lot of other solutions that are relatively inflexible, which they have appreciated. Also what happens is part of implementing customer feedback, we’ve been able to build a product which is far more capable of coverage as compared to some of the competition products.
Do you see Cashinvoice working for wealth or any particular industries?
Yes, so I think the industries where the working capital cycles are relatively longer – good examples of that could be engineering, manufacturing industries or textile where the inventory holding time period is longer. Those are the industries where we have seen relatively a higher successes compared to those which have shorter cycle. Let’s say consumer goods standard segment, which has maybe 10 to 15 day cycle is less likely to use a supply chain solution as compared to an automobile industry, which requires much longer working capital.
