Return on India
Episode 5 Transforming SMBs in India
Return on India

Episode 5: Transforming SMBs in India

Return on India

Episode 5

Transforming SMBs in India

Ravish Naresh is the founder and CEO of Khatabook. We cover the nuances of small businesses in India, the challenges of building for this segment, and the second and third-order effects of including MSMEs in the formalized Indian economy.

[00:03:17] - [First question] - Overview of the MSME segment in India with examples 

[00:10:16] - How retail market structure in India differs from the West

[00:15:58] - The role of Kirana stores and Khatabook in local Indian economies

[00:21:13] - Potential challenges and upsides of selling software to MSME businesses

[00:25:50] - Khatabook’s use of a free software wedge to leverage credit business

[00:31:08] - How Khatabook uses bookkeeping data to make lending decisions

[00:35:53] - The network effect enabled by Khatabook’s platform

[00:42:36] - Projected second-and third-order effects from Khatabook’s foundations

Transforming SMBs in India

Introduction

Romeen
My guest today is Ravish Naresh, Founder and CEO of Khatabook. The Indian economy is set up structurally differently than in the West. While the U.S. has big-box retail and all the benefits that come with it, efficient supply chains, readily established infrastructure and access to credit, India largely operates on the backs of the MSME segment, micro small and medium enterprise.

Understanding the MSME segment is critical if you want to understand India. It's the heartbeat of the Indian economy and it represents over 60 million businesses, largely in Tier 2 and Tier 3 cities. The limiting factor for growth for most of these businesses historically has been access to credit. They're under-banked and operate on a cash basis.

And it's why this week, I was excited to have Ravish on Return on India to help us better understand this segment and how to build for it. Khatabook is helping merchants in India digitize their bookkeeping and is bringing them from the offline world in the online economy. Today, Khatabook has over 10 million monthly active users and the platform records a staggering 250,000 transactions per hour.

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