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Progcap: Accelerating Business Growth Through Last Mile Financing Solutions

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Pallavi Shrivastava,Co-Founder

With significant growth opportunities for the fintech market in India today, Progcap, established in 2017, has been aiding numerous micro and small organizations to sustainably grow their businesses by addressing the needs of these businesses with tailored financing solutions.

With a broader picture of building a stronger economy for India, Progcap's flexible, collateral free credit helps in removing one of the biggest hurdles towards scale and economic opportunities by plugging them into formal financing systems. The company’s first-of-its kind Last Mile Financing Facilities are aimed at broadening the financial opportunities of individuals and businesses from traders, merchants, and shopkeepers, retailers, among others.

Progcap has been catering to the credit and banking requirements of last-mile retailers, merchants, traders, and shopkeepers. Today, the company's platform is tapped by over 100k across 150 cities pan-India today. And till date, the company has disbursed over Rs. 200 crore across 20k transactions. We engaged in an exclusive interaction with the company’s co-founder Pallavi Shrivastava, who took us through the latest endeavors of Progcap.

In conversation with Pallavi Shrivastava, Co-Founder, Progcap

India is amongst the fastest growing FinTech markets in the world. India ranked the highest globally in the FinTech adoption rate with China. As a startup in this domain, how do you think Progcap is contributing to this huge untapped market of MSMEs?
Progcap has been truly working along the lines of an ‘Atmanirbhar Bharat’ by empowering the core pillar of India’s economy - the micro-enterprises. The platform plugs the credit gap via a mix of technology, including open banking, and supply chain evaluation for credit assessment. Overall, it provides capital and technology solutions to increase the profitability of its customers, manage their cash flows, and help them advance towards a higher growth trajectory.

Looking at the significant slice of this overall opportunity, we identify the customers who currently don't have access to any kind of banking and

financial services, such as the last mile retailer segment. There are over 15 million small retailers and shopkeepers in India, routing over a trillion dollars in sale that are currently underserved or don't have access to financial services because they don't have data, collateral or documentation that a traditional financial institution would look for while lending to them. Many of them don't even have any kind of formal credit history. Progcap is addressing this very market by providing these customers access to short term, revolving credit and thereby plugging them into the formal financing ecosystem.

SMEs often juggle around managing their finances and payments. Coming to the rescue, FinTech startups are addressing this anomaly, opening other ways for SMEs to operate. What services or solutions Progcap has in place to be a favorite of SMEs?
Progcap has been aiming to become the go-to banking and financial services provider for every need, whether it comes to payments, credit, financing, or any other products or services that these segments might be looking for. Our mission is to empower our clients by providing affordable and timely credit by leveraging world-class technology. Progcap’s Last-Mile Retailer Finance facility focuses on last-mile merchants/ retailers/shopkeepers by leveraging an ecosystem-based approach to identify, approve and monitor loans. Our lending platform has been risk modeling these businesses using non-traditional ecosystem data by creating credit scores for customers that are currently left out by the traditional financial institutions.

Our mission is to empower our clients by providing affordable and timely credit by leveraging world-class technology

We are offering them a range of technology products, and also trying to address this huge untapped demand by not only being the credit provider, but rather acting as an end-to-end solution provider for their overall banking and financial services needs.

Kindly tell us how your company has been able to provide lending services to these MSMEs?
Most of the customers that we deal with don't have the kind of paperwork, documents, financials etc., which a traditional bank would require for sanctioning loans. Moreover, they don’t have collaterals to give, and very often, they don't even have an existing credit-footprint, as they might be new to credit. So to understand their risk profile, we look at their historical transactions data coming from their trading partners. The kind of data we are bringing in is very similar to what a credit scoring company would look at to assess the

credit worthiness of a business. We underwrite customer’s basis based on this data without even having the need to look at their standalone parameters, thus giving a holistic perspective on these customers so as to define their credit worthiness.

Hence, this alternative data analysis is what is needed in identifying the customer’s worthiness for the loan, who otherwise won't have access to credit through traditional banks.

Kindly elaborate on the Progcap experience that you offer?
We offer assured and steady financing to our customers’ growing needs. If we talk about payment terms, Progcap provides flexible repayment terms which are completely aligned with customer’s cash flows. Furthermore, as with the current situation, we offer digital transactions with simple online initiation and settlement of transactions via mobile application. Our on-boarding process is simple with real-time digital verification, scoring of clients’ data and instant loan approval within minutes. Hence, clients can instantly start using the credit facility, make requests for finance, and also track their transactions and make repayments digitally/ remotely.

Please tell us about your team and also the recognitions that Progcap has received over the years.
Progcap’s unique methodology has enabled the platform to receive several recognitions including ’2018 Product Innovation of the Year’ at IFC’s Global SME Finance Forum in Madrid. Above all, its innovative business model has helped Progcap to maintain ‘Zero NPAs’, despite a rapidly growing portfolio.

The company is driven by a passionate team of more than 100 members that operate with the highest levels of integrity, ethics, and a predefined cause. The platform is simultaneously witnessing an ever-increasing interest within its business model – from both customers and banking partners.

“The platform plugs the credit gap via a mix of technology, including open banking, and supply chain evaluation for credit assessment”

Moreover, Progcap is backed by Sequoia India, GrowX Ventures, Axis Capital Partners and Contrarian Capital, along with prominent industry veterans.

How is the company gearing up for the future? What is the future roadmap set for your company?
If we talk about our lending services, in the coming years, Progcap is targeting to serve a base of over one million retailers by end of 2021. Other than the lending business, we are looking at different ways to add value by adding new product lines across the non-lending vertical of the business. Hence, it is gradually becoming a banking ecosystem for this segment of customers; from account opening to payment solutions.

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