StoreKing, a network distribution platform which operates in small towns and villages is betting on the financial services sector. After creating a network of retailers and distributors for smartphones and fast moving consumer goods, the company is looking to leverage its network to enable lending. “We are working with a few non-banking finance companies like Capital Float, Cash Suvidha, Happy Loans, Muthooth, Hero FinCorp to extend loans to our retailers and help them expand their business and buy inventory,” said Sridhar Gundaiah, chief executive officer, StoreKing.
The company has just started a pilot for its lending project, with 2,500 loans disbursed accounting for Rs 60 crore. StoreKing wants to scale up the operations to reach more than 25,000 retailers and disburse Rs 2,000 crore by 2020.
Speaking with ET, Gundaiah said that StoreKing is making use of the elaborate data they have collected from their retailers which has helped them come up with scores, basis which credit worthiness of customers is being decided. Further the money sits in a StoreKing wallet, called an advance balance, which ensures that the owner uses the funds only for his business with StoreKing.
“We can offer loans at a cheaper rate through our partners since we facilitating customer on boarding. The NBFC does not need to put feet on street, and there is no collection team which reduces the cost of disbursing out the loans,” he said. “We are competing with micro- finance companies in this space but offering a much cheaper rate of interest.”
Further in an effort to digitise and formalise the rural payments ecosystem, StoreKing is also trying to bring in UPI as a standard digital payment solution for all their end retailers. Digital payments won’t just bring in more granular data into the system for better calculation of creditworthiness, Gundaiah said the shift would also solve a major pain point for retailers of having to travel several kilometers to visit a bank branch.
“We’re taking multiple UPI players into rural India telling these retailers to put up their QR codes and get the customer to pay through UPI, so that the money is already digital,” said Gundaiah. “Cash is a big problem, it’s not going to get solved tomorrow, but we have put our hand into it.”
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