Hello and welcome everyone to the virtual conference on innovation opportunity for FinTech startups by Entrepreneur India. I'm Pritima Bharadwaj project at webinars at Entrepreneur India. Today's discussion will revolve around the next big opportunity, trends for FinTech startups. The agenda to be discussed during the session is how FinTech startups should look at ways to connect, innovate, disrupt the financial services industry further. Let me start by laying out the ground rules for attendees. The discussion will go on for one hour 15 minutes. This will be followed by a Q&A session for the next 15 to 20 minutes. If you have any questions during the course of the discussion, you can post them through the Q&A option at the bottom of your screen. Mention in your question if it is directed at any specific panelist, we will take up questions for the panel discussion. Please participate in poll during the webinar. We would also like to request the attendees to keep the questions within the scope of the discussion here today and not pitch their businesses. Let me now introduce a panelist for today. We have with us Siddharth Pai, Founding Partner 314 Capital, Mithun Sundar CEO, Lending Card Finance Limited, Meghna Surya Kumar, Founder and CEO Credit Watch, Deena Jakob, Co-Founder, CFO and Head Revenue and Growth, Open Financial Technologies Private Limited, Shishank Mehta, Director, Product Strategy Razor Pay and Mr Satyam Kumar, Co-Founder and Executive Director Lomata Financial who will be joining us in the next 5 to 10 minutes. A session moderator for this session is Saurabh Kumar, Editor Special Project Entrepreneur India. Let me now introduce Mr Ritu Mahare, the Editor-in-Chief of Entrepreneur India and Asia Pacific who would give the welcome note. Over to you Ritu. Thank you very much Prithima and a very good morning to all the entire community of fintech which is present over here today. I see that we have some great participation and also stellar panel of speakers from the fintech industry who are now going to set the entire digital side of finance into movement. Now what do I see from an editor's lens? I see that fintech today is a key enabler of financial services not just in India but pretty much around the globe. I see the biggest movement happening in the future of payments which was always very large. It was happening, it was always growing but I see it going forward becoming all the more omnipresent when it comes to its growth.  I also see cloud-based POS as a big opportunity particularly from an e-commerce and retail perspective going forward. On a larger scale and if I were to take fintech or an extended fintech view I would say Robo-Advisory particularly for wealth advisory services is something I am very excited about. I think digital advice is going to become a prerequisite for pretty much every wealth management firm which is serve the mass market today. The adoption of contactless payments will be rising particularly post-COVID as people will be more scared of handling money. Money lending of course which had started by fintech layers on digital basis is again going to see a big, big rise and peer-to-peer money transfers is going to be very big. One thing which I would love to see in India particularly from fintech startups is digitizing the international remittance processes. Not that it is already not happening, it's happening in a big way but I think we need some kind of blockchain technology for enabling this remittance process rather than going through the traditional third party approach. And certainly Omni-Channel offerings, the framework of digital payments to provide seamless customer experience across channels is something that is looking very big. On the whole I think it will be a mix of technical skills, capital investments that will go in, government policies, the regulatory framework how it pans out and the entrepreneurial mindset which will really be the driving force of fintech going forward. So we have as I said the stellar panel and I'll give it over to Saurav to actually pick out some great points today and actually lay out what will be the future of fintech opportunities in India. Over to you Saurav. Thank you Ritu and good morning and welcome everyone to this webinar on entrepreneur India. Today we are going to talk about innovation opportunities for the fintech space. Definitely there are many spaces which get affected but this is one space which I believe has one of the greatest opportunities available during these times also to come out winners. But for that I believe that the first and very important thing that is required is an institutional help which is the backbone for any economy to nurture its startups and fintech for any kind of business. So I'll straight away go to Siddharth and Siddharth if you can first tell me that till now whatever announcements that we have heard from the government in terms of helping the startup ecosystem specifically in the fintech space do you think they are enough or do you think we need more? So I think what the government, the first priority of the government was to actually ensure that 800 million people, 800 million Indians who would be vulnerable to COVID-19 were taken care of. During the course of that presentation when asked what are they going to do for businesses and SMEs, the financemen announced that they would look into it. It's been more than a month since that particular announcement but we haven't seen any amount of measurable relief actually given to SMEs or to the fintech players. What the RBI is actually done as of now is that the RBI is actually unleashed this quote-unquote Bajuka of 3.74 lakh crores by actually reducing the CRR, by actually starting the TLTRO operations and everything else that they've done so far. But see what India is facing and this is an institutional problem is that there's a large amount of transmission loss that actually happens because the transmission loss happens wherein the RBI actually releases all these particular goodies, all the way to the banks but the banks are reluctant to do any amount of funding. Now credit in India has traditionally been the bastion of NBFCs who actually do the last mile of credit financing. Ever since the ILFS crisis of September 2018, what we've seen is a marked reluctance from the market to actually accept the NBFC framework as a whole. It's because of this that India, that Indian businesses, SMEs and everyone are still reeling from a huge cash deficit. We have not seen enough participation from the government to ensure that SMEs have actually been taken care of. All the other countries across the world have actually taken up relief measures up to 10% of their GDP whereas India's relief measures so far from the government have actually been a polity of 0.85%. It is important that the government actually takes its influence and actually starts utilizing the institutional frameworks that we have across India to do it. And another thing that the government and RBI should look into is the fact that the current system has actually been broken. The transmission loss are extremely huge as of now, especially when it comes to the existing players of the larger banks etc. This becomes a perfect segue for India's FinTech players. FinTech has been the area which has garnished the largest amount of capital in India and seen the highest amount of growth. It's important for them to allow them to become part of the formal financial ecosystem such that any measures of the RBI can actually be actioned through the FinTech startups of India and actually go and give the end result to all the customers and to the SMEs and the businesses as well. They are reducing the entire transmission loss in the entire system. Talking about NBFCs which is also affecting some of the credit players in the FinTech space also. Don't you think that the track record of NBFCs and that is what even banks having money are reluctant to actually collaborate with the NBFCs. What would be the sweet spot where both can collaborate so that the other FinTech players who are there are getting affected who are not getting affected? What has happened is we need to understand that the banking system has actually become a regulatory mode as of now. It's almost near impossible for anyone to get a banking license to actually become part of that entire ecosystem. The banks have in effect become gatekeepers of this entire part. In order for startups and NBFCs to actually get part of that entire ecosystem, NBFCs to be deeper integrated. RBI needs to start treating NBFCs with a lot more kindness and consideration than what it's actually been doing in the past. What we've seen since ILFS, they've actually showed a study reluctance to us accepting the NBFC framework for whatever reason. And these NBFCs have actually become systemically important NBFCs as well. So unless NBFCs become part of the formal framework, the RBI starts directly extending its largest to these particular NBFCs. Rather than trying to go to the banks as it's always been doing, you will see this particular thing continue over time. What India should do and the RBI should look at very clearly is the fact that the digital banking norms need to actually come into the forefront as of now. Singapore has done tremendous work in ensuring that they have actually come out to the forefront. They've been one of the first countries in the world to explode a universal digital banking license. And what COVID-19 has taught us is that the physical banking infrastructure is not that important for a business to actually conduct its operations as a whole. See, we have been open as well. They've done tremendous work in actually ensuring that SMEs and all can actually directly integrate with their banking accounts and start getting greater flexibility.  RBI should actually accept them, classify them as digital banks and allow them to become the last mile players as well. The moment this happens, the transmission loss of close to 3.74 lakh crores has now been stuck in the financial system and the banks. So we've seen the deposits right anywhere between 15 to 30% in March alone. We can actually ensure all that money actually transmitting for the economy. We won't be stuck in the situation we are in as of now. Thank you, Siddharth. So I'll come to Dina. Dina, I think you would want to talk about this that you know when that says that you know new banking and all that stuff to accept it. What's your view there? Right, so see that pointed out as a very important aspect in the relevant for the current times. In fact, COVID what COVID-19 has done is to act as a catalyst in pointing out the importance of contact less digitization, everything in film tech. So we are in New Bank started in 2017 and I still remember the early days where it has been a whole lot of friction from the entire ecosystem in terms of you know this requires a lot of API or other infrastructure sharing. It requires in banking infrastructure being opened up and being mature all of that from my tech perspective. So as we have seen that evolution there has been we were already at a point wherein things were changing in the right direction. And I would say COVID-19 has catalyzed or accelerated that whole piece today in the last one month. The kind of changes we have seen just to give you a few statistics on how things we have seen when everything was falling about all across. We've seen almost 20% increase in the kind of acquisition at a 40% of the marketing budget of course we have cut down on that. And then we saw a whole lot of interest in the API banking that was coming in inbound which was not our immediate focus at this point in time. We were focused on SMEs and giving them a complete full-fledged platform with the entire new banking spectrum of services including the payment stack and the recording compliance aspects, coming to the card issuance with an expense management and then coming to the demand generation part also. But that being said what we have seen is API banking gaining relevance because businesses started having this pressure of getting into the digital era or rather digital channel and that's not completely ready elsewhere today. So we started seeing we could put together different parts of the assets we have built to solution it in a totally different manner. That was another emerging trend in the last one and even with the banks also we've seen more banks opening up to the whole idea of sharing and taking to the community. So I would say what got down was working in silos everybody has opened the entire ecosystem has come together open to collaboration and the smallest friction we have seen while customer experience is at the core of what entire new banking and all these infrastructure and sharing does. What we see as a friction also is a small little requirement of the physical documentation be it on the account opening part. I know that from government also a lot of push is happening on breaking down those frictions yet at the same time it is a need of the art to push through. Right as mentioned in the beginning for the cross-border payments for that matter be trade finance for that matter. So that is where businesses started struggling during this period. So you think that after I was just talking that you know earlier also. They when these detectives came they bought out wallets and all they tried to raise a war but then they could not. So then they gave up and now do you think there is going to be another round where a lot of collaborations in terms of these institutions working with you know innovative product product companies would be something that you would see from here on. Yes I think it opens up a huge window for the collaboration and we have all opened up and warmed up to that whole idea. So that has been you know it is a evolutionary process right initially we try to take each person's solution to the market and this is such a vast market and so many things to be tackled as said that mentioned right if government is announcing something how do we take it to the right deserving set of people how do you identify that how do you create channels to get there. So the existing infrastructure working in silos is not solving that problem and the problem doesn't have we don't have the luxury of like two three years to solve for that. So these are the times where in you know height and collaboration for example when we work with we work with a bunch of in the entire FinTech ecosystem a whole lot of players are plugged into what we do and they are also you know taking this free I wouldn't say free time. So currently there is bandwidth apart from the core product everybody is taking a step back and looking at listening to the users listening to consumers listening to the problem and the complexity of the evolving times that we are in habit change behavior the digitization all of that shift which is happening everyone is taking a step back and looking at how can I collaborate I'll play on my strengths and take the right solution to the market rather than reinventing the wheel. So that way we are working with the entire ecosystem players right from you know banks where in we are providing co-branded enterprise versions to you know there are FinTechs whom we are collaborating and helping their clients have their own you know what the models which they can take as an entire new banking offering to the customers which helps helps them you know I value add to the customers and we are directly giving to the SMEs with the including a user experience and the journey everything crafted by us so even for us it has been a time of reinventing ourselves the way in which we take this entire thing to the market while building a stack how we open up so that people can benefit out of it including the FinTech players. Ashank I'll come to you when when it comes to like we talked about you know making silos and evolving products you know so how do you see this space and how what has been your observation especially in the last one month has the attitude changed or have you been able to reach out to more people and talk about products that how we can evolve especially when you know contactless is something that we shouldn't think about. Definitely so I think with Dina and Siddharth also going to talk about right the banking flows changing there's a clear cut ask from the market that's coming out for more product based flows you know if you look at any of these things in the past very simple things like salary processing the lot of companies right now which are still operating in the manner where the salary is printed onto a letterhead it's signed by the outside signatory handed over to the bank official who then does a salary processing and these companies are now finding that there's no longer possible this is becoming a pain from them because the banking officials also cannot reach your house easily even if you look at various angles like how data sharing would be done with the CA firm for your taxation the way this was being done was that the person from the CA firm would come to your office sit in your office look at all the documents do your TDS filing and all the taxation right versus what we are seeing now from the market is a very clear cut demand because of the realization that everyone has that we should be able to run our business from wherever we are we should be able to run our business through our laptop versus requiring physical contact for anything and because of this we have seen a very large rise in interest in the recent times for our payroll solution particularly in terms of how companies can very quickly process payroll and without having to you know give any kind of a file to a banking official how do you do those angles things like compliance payments your TDS payments can be done through an online channel easily without having to kind of create again a file being done physical verifications happening in the office etc how do you digitally do it so in general I think in terms of how the product flows are changing there is clear cut demand from the market that we need solution for today's agent time I think we all would accept that this COVID situation is not going to you know end and things will not go back to as they were let's say in JAN FIB in about another month's time or so that's probably not going to happen a lot of the things are going to be impacted for quite a significant amount of time so in terms of the payment side of things we are seeing a significant rise in solutions like EPOS which was earlier seen a spike during demonetization period we had built the solution back in 2016 when the demonetization happened for an EPOS collection that instead of you collecting cash from the person you take an online payment even though you are let's say near to the person in grocery companies for example they're delivering in a lot of areas where let's say people don't have their debit cards even enabled rupee debit cards where a lot of them were switched off because they were not used for a long time so the ask of the market now is how do I collect these payments without requiring cash and most of the grocery companies have stopped taking cash because of the contact nature so we've revamped our EPOS application now and we have launched it again in the market with brand new set of features and I think that's what the market is clearly asking in terms of general product strategy I think while there is the COVID lens that you have to look at there's also a strong lens that you have to see from the perspective that clients are now you know focusing more on survival they are no longer looking for optimization products which are optimizing few parts which are not in the critical flow they're looking for things which is going to help their company survive this over the next 6 to 8 months so the amount of USP that your application should be able to provide to them the ask is increasing they are no longer going to take let's say an MVP which has let's say bare bones feature it does the job it does one thing well but it is not providing enough depth what in earlier times you could possibly launch an MVP do marketing exercises around it and get good amount of traction I think now everyone is more focused on survival which means that any solution that they are picking up they need to be more thought through it has to be more sorted and it really needs to solve the problem of survival how do I help my business run during this time so that's the lens that needs to be taken I think across companies when they look at how their product strategy is to be framed over the next few months so I think the robot behind me and these kind of things are going to be more definitely definitely so I think so we work with so we have a capital arm also and we also have a lot of lenders who give out their loans through our disbursement platform and what you're seeing is that clients are now coming to us asking that I don't know which lender is lending in the market I have an immediate requirement and I don't have the time to talk to 10 different lenders to figure out who can give me at what rate can you as a company help me out in this time and give a quick turnaround time so robot advisory as you pointed out is a very relevant thing that how do I get the value that I need in as short a time versus earlier times when I would kind of do shopping around I would talk to various lenders I would kind of figure out who's giving me better rate I need the loan right now and people probably are willing to give in a little few points extra in terms of interest rate as long as they can get the right support at the right time so talking about lending so this is one more there's one more you know arm of banking which so lending is something that is one more thing that we would have to talk about it because at this moment in time a lot of people a lot of loan takers are not able to pay back and that's kind of hurting a lot of lending there so I would come to you how have you seen this with you know evolving since we have been hit by the crisis in terms of you know that we came in and what are the learnings that you're going to take forward and you know you know the plan to have enough to unmute Thanks Arup so yeah you know a couple of themes are uniform and across the industry and cost cut is one such thing whether it's a government or whether it's individual or institution cost cut has been uniform that has been practiced across the industry and startups or non startups both together now moving on from there what we are also seeing is that a couple of stuffs which is also emerged very clearly that when it comes to doing an emergency support system government has relied more and more on the on the startups be it in a healthcare domain beat into grocery domain or or a global domain so the startup has come as a main theme in on the whole fight around the covid similarly coming back to the fintech how do we see the fintech operating lots of railroad in the fintech being into the acquisition payment or accounting side or the lending side the railroads has been made what we'll be seeing is we'll be seeing more and more collaboration cohabitation between the institutions and as an institution we are also preparing for that we have to come in all over again so kind of a speeding up of adoption we saw post demonetization in the payment space same kind of a speed we will see in the lending space because all the business will look forward to restart ASAP all the institution will look forward to start ASAP individuals will look forward to restart their life and the speed will be of essence over there having talked about speed and building the railroads around it and a collaborative environment around it what we also see sort of when everyone is that you know post covid as we very clearly see from the way government has been approaching there is still lack of clarity or lack of planning around how the lockdown will be eased out in this kind of an unpredictable environment where you are seeing things to stretch maybe 6 months, 3 months, 12 months depending upon when the whole when we will have I am seeing some changes in this yeah so yeah when we see the government lacking the planning on the lockdown easing and that is where we see that speed will be needed both in terms of entering the market delivering the product and coming out of the market because you will have India you will have to see India in a multiple pocket some pocket will peak in May some pocket will peak maybe later June some pocket may see a climb back of the covid in some other month so the institutions has to come very quickly to the market deliver the product meet the market demand and come out of it with least of the trouble or least of the scratches so the speed of delivery and the will be very important and the platform which has been built by fintech will help or will become a collaborative environment even for the larger institutions like a bank or a large balance sheet and bfcs to play in the market so both one in terms of the demand to be met and the second the speed with which it has to be met and the third with the operational efficiency of going into the market and getting out of the market in the situation that the trouble will begin again is all three or four variable has to be looked at so we are looking at a covid more like a Kaliana kind of environment where you have a multi headed snake which will come in so one snake taming at one head taming at one end is not given to give you a solution unless until you get a clear cut medicine or you get a clear cut stuff like vaccination till the time this problem is going to live and then it is about the speed so at the same time all of us also have to earn a livelihood so for earning a livelihood we have to cohabit the environment of covid go into the market do business come out do the product delivery essential or non-essentials and come out because after a quarter every item will become essential today we are looking at only as a grocery as an essential within a quarter you will see every part of our life to turn into essential and the delivery railroad is what fintech is in a position to provide and that's where we will see the adoption of cohabitation happening I just hope that we don't have to cohabit with covid I hope that it will be good I think I will come to Meenav before I go to Meenav about lending I think you want to add something about the tanking I think that will be good so how we look at this problem is it's not just covid alone you know when ILFS collapsed you know a year and a half ago we sort of got into an economic recession so there's a three-fold problem at this point right there's a recession which we thought will come out of which we thought was bottoming out but we had the covid so it's extended the recession and made things worse we have the covid situation and we don't expect to see a vaccine and you know maybe 8 to 12 months we would have a vaccine and the third thing is now there's this fluctuation in the you know oil prices because of this you know there is a lot of stress in the market both on the demand and supply side so from our perspective if you look at the situation right now equity is very expensive form of capital so how are companies and businesses going to raise money to survive right so we feel that debt is going to become the new equity and debt is going to become the cheapest option for companies to survive to have liquidity to be able to have working capital to survive and whether through this crisis so from that perspective we feel that the lending industry the financial services industry is going to play a very crucial role to help businesses especially small businesses you know try to survive this crisis and the Murata area of a 90-day period for your loans for MSMEs and some of the additional support is a step in the right direction it's not enough but they need to do it so from out so we see a lot of shift in the lending industry because of this maybe while digital lending and SME lending was you know under 1 crore was completely digital if you look at the 85% of the current outstanding in India today that was not lent using digital processes it was done using manual processes paperwork so there's human touch everywhere from collection of documents to processing to interaction so that is going to see a huge shift post-COVID because of the risk that people cannot take an entire lending industry per se needs to get going digital and that's a huge opportunity for the fintech industries and for fintechs to you know support the entire financial services ecosystem across sectors and across shapes and sizes of loans whether it's a 10,000 crore loan or a you know 5 lakh loan or 100 crore loan everything is going to go digital video KYC which is the right move that happened in March that is going to become but become very important so digitization is going to happen in every step of the lending flow we've already seen that kind of happening in the past 60 days when we've seen like a rush of large banks reaching out to us to help them digitize the entire lending process end to end with our platform so that's I think a huge shift and opportunity for fintech companies to support the industry and of course like everybody said collaboration is important that everybody worked together to kind of create different kinds of new offerings, products and services for example like Canra Bank some of the you know PSUs have come out with extending the current working capital for MSMEs from 10 to 35% without any additional collateral and I think that's a huge relief for them to get access right now and that's what some of the PSUs are doing right so for people to collaborate and come and offer different kinds of products and financial services to MSMEs and MSMEs you know and to help them you know whether to this crisis again will be a huge opportunity that everybody can capitalize on especially the fintech industry so that's kind of our view we're going to now come to you now so from the lending from the lending point of view how do you see this period right now and you think I just did it because I've heard from various experts that right now people should avoid that and should be you know preserving that fashion extending that and so how do you see this period thanks for the question I think I would answer it in two parts right I think there is a period of the next three to five or six months and then there's the period of you know the next 18 months after that right I think and let me say it from two perspectives as well as a company see we are a medium sized well I would say medium sized but at this point we come systemically large we are a medium sized mbfc online digital lending platform which is completely focused only on MSMEs in the country and which typically gives out working capital loans to the tune of about on an average ticket size is about five six seven max right so these are given out to the mom and pop stores the small medium entrepreneurs people who are sort of by the street corner in India and given out completely digitally with close to zero touch physically that's been the business that we've been in now for a company of this sort which does this business I think the next two three months the most important question is to be able to conserve cash through a mix of everything that you know different people have spoken about cost cutting prudence thinking through postponing certain commitments but making sure that we are able to sort of manage our cash flow over the next two three months as the bulk of the tightness of this situation passes through now speaking for the next 12 to 18 months of the company I actually think it's a different context altogether right because the need for credit especially the target segments that we are speaking to is actually going to be much larger than it has been over the last four years when we've been in life and from what I see of the ecosystem outside India sees if I speak to banks and to all of the other institutions that I speak to and if anything their ability to give credit where they may have money to lend their ability to be able to really think and give the credit has actually become more marginalized there will be more risk covers to that extent especially to MSMEs who are already underserved I suspect they will be even more underserved unless you know the right digital fintech banking companies sort of steps into this space today MSMEs in the country there are about 70 million MSMEs frankly only about 10 to 12 million of them actually have ever had working capital loans from a systematic industry they get it from the nearby market often but from a systematic industry in a simple easy to access clean purely on the books kind of manner very few have had access to them for a variety of reasons either their vintage is slow their business is slow their size of business is slow companies ability or banks ability verify their credit history for a lot of such reasons and that's why these things happen now if I remove the company view and I take the industry view as to how does this look I'll flip it completely the next three to six months is probably where the requirement for credit is going to be the highest now the reason for that may be a very mix of factors right there are cash outflows which still continue for a medium-sized business during a shutdown period and they're stuck working capital depending on the nature of the business which is already stuck and so and salaries need to be paid and they need to sort of manage the similar problems for them as they sort of come back in the economy comes back and as they come back I agree with some of the folks here who mentioned something mentioned it's about mentioned it I think that we are looking at at least you know a 6 to 12 month period where there will be some version of coming back going on right till we really get a vaccine and sort of come out of the problem entirely I think as this comes back these will likely be the businesses which come back to shape the fastest and the reason I say that is one typically if you're servicing a nearby cashman localities sort of small and medium needs be it a repair shop be it a guy who does computer repairs be it somebody who's actually a vegetable grocer or a tailor typically these people have ties in the community and they are in a sense in what we within courts call medium essential industry and so when the when demand comes back they'll be the ones who are sort of the quickest if you will to recover number two unlike a large company their overheads and their cost during the transition period is lower as well so if they manage to sort of stay prudent during this period in time we expect that they should be able to come back to life very quickly so I see this broadly if I step back for both in BFCs like us and for the MSMEs whom we serve I think you've got a 3 to 6 month period where we all need to be extremely prudent and really manage cash flow coming out of it I suspect MSMEs in this country if with the right level of support have an opportunity to rebound and the need for credit especially in a digital manner is going to be significantly higher the one piece that I think would make the biggest difference to this problem would be if you were to get significantly higher assistance for the MSME sector from the government I think that spoke about countries spending close to 10% while we are spending sub 1% of GDP and somebody spoke about how Singapore has sort of set up the best system I'm speaking to a friend of mine who runs a lending company in Singapore and another friend who is actually a small entrepreneur in Singapore when they shut their business down within the next day the company actually received a check from the government with a certain amount which is supposed to cover their 2 month expense that's the speed at which people are sort of processing we're taking very if I would say at this point the government measures to sort of really support MSMEs having been at it but I think we need more but the experience with the price how it would be coming to the RBI about some measures you know so to ensure that you know both that it goes out in the market but can we see back to when it comes to the price to the RBI even at the small rates but they are reluctant to really go for an event so how is your what is your I think the moratorium is in theory a great idea and we've been sort of keen to extend it to a lot of our customers frankly because they need it as well right what's not happened is full scale policy clarity across the spectrum it has not been a full flow through on both ends of the spectrum now when we sort of give moratoriums to several of our customers the right thing to happen would be the government is stepping in to make sure that you know the banks that we borrow from the financial institutions that we borrow from also pass the same moratorium with the same levels of you know clarity on how we treat you know the loans during this period of time I think while the intent has been right as with India a lot of loss happens with most things right so the final implementation and making sure that last mile in every part of the chain is getting the same sort of relief from the government hasn't fully happened and that's made it a little tougher to execute all intention I think everyone's intended right but in times of uncertainty the direction is not 100% clear capital follows the safest path and that goes as you spoke about the reverse flow which is not really helping the business in any way shape so that's welcome to you to have your view on this a lot of people are saying that you know that is not the correct thing for the SME the right what they mean things that they support so the RBI has tried it but the banking system has kind of failed so what do you think is the impediment there no I think see what usually happens what usually happens is in times like this is that all of credit like your entire banking norms everything etc is based on risk assessment right about now the risk the risk is actually at the highest so no banker can actually go about and actually make any of those giving any of the loans or making the investments at this particular point in time another part another part that also needs to be taken into consideration is the fact that the NPA norms our banking system has been burdened with this legacy of NPAs for a very long period of time and it's only been it's only it has it peaked I think about about 18 months ago started coming down now but it started spiking up because of this as well now for a large amount of banks because of the Titan NPA norms and the Basel 3 norms that all the banks follow the moment 45% of the loans actually go bad there's actually a very strong chance at the entire equity base of the bank may actually be eroded at that point in time so this is so this is a systemic risk that or that the bankers the bankers also understand along with this the RBI with the moratorium everything they put in what they should have ensured is some of the NPA recognition norms etc across the entire banking system have actually been reduced to a larger extent possible the RBI did some small bits and measures in this entire piece but the larger cohesive piece of the nation that she needs as of now is important another point in this with regard to credit see India in India the problem the problem we always had is a lack of credit we have never been an over-leveraged society we've always been the savings economy as a whole if you actually compare that to GDP ratio across all the countries in the world we think about 55% if I'm not mistaken whereas the countries like the US and Japan has a 256% ratio the US is already I think about 110 hours of now China also has significant head on the books as well the problem India faces isn't the is a lack of credit it's also lack of affordable credit the interest rates in India are actually far too high in order for businesses to actually borrow in order for people to actually lend we've always all this time we've been fighting this method of inflation inflation inflation but if you actually look at the way India's calculated inflation for a long period of time 42% of the entire basket is dedicated to food in fact I always say this India is one of the few countries by the price of onion actually determines inflation we've been had the recent onion problem a few months ago you saw the inflation actually spiked up to a large extent whereas the rest of the goods that we actually do consume on a daily basis remain remain almost flat so India needs to actually relook at its way of actually accounting for inflation so the interest rates can actually come down and wider and wider cheaper credit can be made available to a lot of people even the recent scheme by CIDB as well for startups it had 10.5% interest the schemes that have actually come out in the US actually have a cap of about 3% of the entire interest some businesses that are getting loans at 1% as well when the interest rates across the entire system have actually collapsed and even the RBS taking a large amount of effort to reduce the repo rates etc the repo rates are now standard about 4% if I'm not mistaken and the banks cost of capital is actually around the same rate as well but the banks are lending at 12% to 16% to businesses that entire spread of 8% to 10% is almost unheard of across the entire world in India businesses especially need larger access to credit they need larger access to cheaper credit and this actually requires the RBI and the government to actually look at the cost of capital in India find ways to actually reduce that and to actually broad base it the moment you consider credit in the hands of those few banks as well see what we've had is a credit concentration risk in India for a long period of time there are about 15 to 20 banks max really want to extend it there actually become the credit providers to a 2.7 trillion dollar economy of 1.3 billion people it's unheard of across the entire world we actually need broader participation over that and we also need to realise that some of the banks have become commercially unviable and we have all of us that know which banks some of them have even fallen some of them have gotten bailouts etc those particular banks should be allowed to sort of just be retired off so to speak and we need to allow newer players to actually come in because the legacy costs of these banks have become so high that it becomes almost unserviceable I think this particular situation where in now actually gives India a chance to give it's a reset for the entire nation as we come out as crisis no one knows when we're going to come out how it's going to come out it's important for us to actually start pursuing all these bold reforms because if you are to become a 5 trillion dollar economy by the year 2025 unless we have these kind of bold reforms unless we actually let loose the credit gates unless we bring down the cost of capital across the entire nation we will never be able to hit those particular numbers in our lifetime 5 trillion that's a huge number I think in the case of very ambitious number I would say but you know we'll move on to some different things altogether is the financial services in general like the products that you have you know we have seen a very under penetrated society but now a lot of players you know we see even players like KTM and all also trying to become a fully financial services company having all you know so innovation products and use of more technology maybe blockchain maybe I don't know all these different solutions so what do you think is going to be the new kind of strategy for all FinTech players from Europe I think one of the major aspects is going to be that everyone as I mentioned in the past everyone is going to be focused on survival more than anything else so I think the first aspect that companies are looking for is how do I work still in this model how do I work in this way that I'm kind of you know during the COVID time I can still survive but the major thing that companies are looking at and how like you know finance companies are kind of also looking at solving the problems is helping businesses switch over to mechanisms that can let them work during the COVID time the fastest I think Dina had mentioned this aspect right that a lot of companies which have to do let's say foreign transfers they can no longer depend on the older model so how do companies switch over to mechanisms give to these companies that you can make foreign transfers by an online mechanism requiring a physical signature model so in terms of I think how everyone's kind of moving to the financial services a simple way for me to actually talk about the basic requirement is that if anyone of us over here has to find out when did I last pay a particular vendor any amount of money I need to go to my bank account I need to download an entire account statement there's an Excel file do a search in that Excel file for the name of the vendor which most likely won't be there they would be an account number they have to find the account number of the vendor and then I know when have I last paid this vendor nobody wants to be wasting time on this this is an absolute waste of you know the talent that we have in our companies and if you look at any finance team it's a pyramid of their ass at the bottom most is just transaction monitoring and transaction reconciliation and still the problem because it is the core thing most finance teams are just spending time doing this just looking at if the money has come in what money is due to me what money needs to be paid out just this aspect the finance teams don't even get an opportunity to work on strategic levers like how can I help my company manage this cash flow better they are just still working on their receivables their cash flow cycles etc. itself and they are kind of burdened by these angles so what even PPM is doing what Razer Pay also is kind of doing and a lot of companies are kind of looking at is figuring out how do we help these companies manage their finances in a significantly more efficient manner without requiring you know too many basics kind of being sorted like large companies and we work with a lot of large companies processing let's say hundreds of crores of transaction on a weekly basis they do the reconciliation on excel sheets still they download an excel sheet from payment gateways they download an excel sheet from their own system a person sits and matches it identifies where are the places where there is a mismatch and those mismatches are manually handled leading to let's say three to four days before a lot of your anomalies your finance anomalies are sorted now these are all things which is no longer acceptable in today's time when people are trying to kind of make sure that their finance is run as tightly as possible their numbers are as closely monitored as possible you can no longer depend on this human interaction solving out so many different pieces and sadly the fact of the matter is given the strain on the businesses you can no longer solve problems just by adding more people to your payroll which has been generally the way that Indian companies have operated that okay my volume has scaled up 10x let me increase my company size by 3x4x that's been the model but given the financial strain on most companies that is again no longer possible companies which have seen massive scale up education sector has seen a massive spike in terms of volumes they no longer just quickly go and add a lot of people on their payroll to manage these spikes they need to kind of look at these technical solutions to manage it an education company working through freelancers who are providing classes on their platform needs to be able to make payments to these people on time and on demand just like how a lending company needs to be able to disperse loans on demand and in an automated manner so these kind of challenges exist across various industries grocery companies when they do procurements from the actual farmers they need to make those payments on time these farmers generally wait for a lot of time before their invoices which are not even invoices these are generally standard bills that are given to them and these are cleared it takes a lot of time whereas what we need is money to kind of flow as quickly as possible there are farmers that we have heard of some stories from our grocery players who particularly who are working in the agriculture economy side where the challenge is that there's so much distrust that's also coming out the people like you need to give me my money now only then can I dispatch out the goods for you whereas earlier they would be working to work on a credit model where I allowed you to kind of take the goods and then give me the money later and we had companies come to us and say I need to automate my procurement because I can no longer work on the older model I'm not able to do my procurements if I'm not paying them on time so what financial services and all these financial companies need to kind of do is help these companies evolve as rapidly as possible and I think as a bunch of folks on the panel have already mentioned right the next six months is going to be the companies which are able to get back on their feet as quickly as possible are the ones who are going to prop up the economy and the way that they are going to be doing is by changing some of their core flows and finance is one of the last places generally where technology touches in a lot of companies but now the need of the are is that this happens as quickly as possible so that's I think where the financial service companies like Razerpay and a bunch of others are playing the role right now in the market so what we're going to do is we'll continue the conversation by taking up some of the questions that we already have got from our attendees so we have our first question from Pradeep Pat can we have his audio please Pradeep Pat I think we're not able to give to audience Pradeep can we give the audio to Vibhore Tikia please Vibhore Tikia yeah Vibhore, we can help my first question is to Mithun Mithun I'll just give a brief introduction we have a fintech lending startup which lends to the underbank I've worked closely with one of your colleagues as well Pibhi's colleagues, Prabhakar, Aira, Zora which sold to Woonik and Prabhakar came to Woonik for a while now the idea is when we were lending to the underbank what we are now going to experience is going to be a spate of or we're planning to experience a spate of increased NPAs we're trying to prevent that because we have both technology and touch as part of our ecosystem how are you planning to overcome the spate of increased NPAs also increasingly there are articles coming out which are talking about VC's shying away from the fintech space as of now, I'll give you an example what happened with us when we sold Zora to Woonik at that time vertically commerce was the flavor so apparently commerce companies suddenly shot up and very quickly once the flavor ran out they shot down and they shut down like a pack of cards do you see that happening in the fintech space also how do you tackle that, get over that I'm sorry I didn't get your name when the question was being asked I saw the bottom box so thanks for the question, let me answer it from the reverse before I joined Leningrad I used to lead revenue marketing and strategy analytics for Mintra so my earlier role was in the apparently commerce space as the vertical so what you said makes sense I think two parts of the picture number one, dissociate sort of the running trend from the performance of a specific company I think these are two specific things that we will always have to look at in any sector now if I take the simple example of vertically commerce in apparel multiple players have tried and failed while a few have succeeded in finding a business model that works now if you find a business model that works apparel is the second largest pool in this country after grocery and once you've found a model that actually works and can generate positive EBITDA you're home and drive because it is a very large market in this country and will continue to grow and whether flavor of the season VCs come in, VCs go out, if the model works the model works grocery is a model that is still being cracked while Vibhax's kit has done really well to do it profitably has not been as simple and it's a model that's still getting cracked other verticals haven't cracked it yet horizontal players were large so first thing is what I see is apart from what you see in a sector the more important question is the performance of a company and there are different companies that perform fantastically in any given sector and there are companies which perform broadly badly in any sector second piece coming back to fintech and sort of flight of capital in terms of VCs etc. from them and how are we managing MPs my experience has been actually deliberately the opposite I think true maybe about six months, eight months back the flavor of the season was to use the word fintech and frankly every company that was worth its all was trying to actually become a fintech I knew of a travel travel service provider who actually had to go into lending so it looked like when you have a large enough profit pool which in India lending is a massive profit pool and technically low entry barriers to trying it, I mean digitally you can lend but you don't realize the complexity of getting the full mix right is lots of people want to try their hand at it there was a saying around six months back and not saying but you know common joke in the VC circles which said every company spends its time doing what its core business is as a start-up for a really long time until they finally became a fintech and Google was the best example of it when they eventually got to Google pay so fintech is a place where the profit pool is a large, relatively low as your entry if you are able to manage your cost of goods or this cash so lots of people enter my experience has been the reverse right now VCs are being very selective on who they back but they have been very clear there is no long-term potential for this market I am using the term loosely fintech is high fintech is a broad variety of things payments functions very differently from lending functions very differently from investment from transaction so very very different models all together if I speak purely about the lending industry I think staying focused putting your customer first and finding a way to sort of really underwrite with knowledge will actually save you from whatever the NBA crisis is we have now done four years where we are close to doubled in terms of our book every year we have served largely the underbank and the unbank but we have stuck to that one segment of 70 million MSMEs in this country and we have created with the knowledge of the four years we have created an algorithm which helps us to rightfully decide what is the right level of loan to be able to give to that person what is that right tenure and where will they be able to comfortably pay his back will that be will there be a hiccup in that or change in that due to the current scenario of course they will be do I predict everything algorithmically on what would I do with this current scenario not yet so right now it's going to be a mix of as you said take and touch at least for six months and we are going to have to work and see to it our level of prudence would probably go two x up our level of growth would probably come fixed out and I think you are perfectly happy to sort of wait out the growth period and stay prudent for a bit we are the venture capital folks who we are speaking to and our own backers as well they are fairly confident about the model the question has been are they willing to take a little longer patience curve which I think everyone is now open to thank you I think before I go to the next question I would want to ask that can make now also that this last part of the question that think that getting attention from we see before I go to start to get the final answer so what has been your experience you know especially you think very shortly if you can sure so I think that this is a time where startups kind of have to be prudent I think that the first two first one and a half months during the covid crisis we did see that the VCs community was a bit more silent because they were focused on working with their own portfolio companies looking at the way they run ways where and supporting them to survive because the first six weeks of the crisis everybody looked at the cash flows there are ways and all the VCs work with the existing portfolio companies to look at you know who's got how much runway who needs funding immediately what's the urgency so they were busy with that but what we see in the next up you know come right now it's changing I think that if you can see the news everyday investments are happening and I think that the VC community is kind of going to bounce back and start looking at lending the bar is going to be much higher that means that you know business models that have a path to profitability that are solid they would still get backing at this point of time I think that the VC community is still active there will be new deals but it's only that the bar is going to be a much higher for the next few months so what I would tell all of the startups is if you have existing VCs and who already supported you and you're running out of money consider doing a flat round that will give you 12 months runway go back, deepen your product achieve a few miles down and then go back and do a larger round of funding 12 months from now at a much higher multiple and that's what I would tell startups with a short of runway that would be my piece of advice for them to consider doing a flat round from the existing VCs and for startups who have 18 months cash just sit tight, focus on your product deepen your offering work with your customers work on your model and in the next 6-7 months everything would bounce back so that's kind of the situation that's what we feel thank you I totally agree with Mechna the factor we need to keep in mind is that VCs haven't gone off the market neither have they stopped looking at the right models so they are very actively looking at the right models we still get inbound calls and interest to understand what it is so the key is how to survive currently the way in which it will be evaluated is that this is also a test of resilience so who is a winner who is actively able to innovate and come out who is actively able to find out new revenue streams, survive find a way to survive and this is a true test of entrepreneurship also so what one needs to keep in mind is as Mechna rightly mentioned look at different structures flat round, down round be it the bridge round you can take or that you can look at whatever would be the case to get yourself a float and then be clear on what to start what to continue doing and what not to start also be very prudent in this time so if you stay afloat don't worry VCs are there, capital is there so it's more about your resilience during this time happy to so things see as Mechna probably put it VCs like living like lending companies even for VCs the inventory is actually the cash so the moment that cash the moment that cash sits in the bank longer it starts burning a hole in your particular pocket so VCs haven't stopped investing as of now most of them have become more prudent when it comes to this they've gone for the they're no longer looking at companies to follow what I call the raise and raise model they raise a lot amount of capital and they burn or raise all that money within the span of 6 months and they go back to the market and start raising again so all those bottles have actually gone away especially now when it comes to fintech fintech had actually become a fig leaf there were a lot of people where they couldn't find anything else they could do they would call themselves a fintech company and try introducing some element of it all those fly-by-night operators are no longer going to be entertained by any of the venture capitalists there's been a flight to quality and a flight to fundamentals so as long as you can prove that as long as you prove that you actually built up a sustainable book your book isn't fiction that you do understand you do understand the nuances of lending and how more important you have to get the money back all the VCs still actually have a large amount of dry powder to continue to invest in you and seek out these models The next question that we have is from Muttu Alagapat can we have the audio please Hi everyone Yes please go ahead Hi my name is Muttu, good afternoon I run a finance company that gives out loans for automobiles and I operate in smaller tier two and tier three towns where people are not used to digital lending and digital transactions so I have two questions post Covid would you think that digital transactions would increase in smaller towns in general where people have limited access to smartphones, computers etc and the second question would be as a company how would I go about building up my digital collections that is payments through cards, banks online payments etc Thanks Satyam would you want to answer that first part of the question if you want Yeah sure Fundamentally the vehicle sales itself will move more and more online and as I was saying that it's a adoption change for the people the company is both in China as well as globally even domestic company we work with leading electric vehicle manufacturers who never thought that they will think beyond dealership outlets and good amount of bookings are happening on their online platform so you need to bring your dealers probably if you want to take more participation in the ecosystem you need to bring your dealers to the platform if you want to control the platform create the platform or participate with the controlling party over there so yeah the purchase will happen and if the purchase is happening or selection is happening then the finance will also will be triggered on the platform or in a digital interface this thing so the answer in nutshell is I am fatigued yes Thanks for the second part of the question that's in the smaller town so will we see more innovations in terms of products that will get them more accustomed and used to using these kind of digital platforms I think if you look at the digital collections angle in general I think the best strategy is to kind of cover everything how we have seen lending companies kind of manage the collection pieces they give as many options to the customer as possible right from let's say giving a web page where they can go to an online payment if there's an app there's a payment option within the app itself to giving if let's say these customers are used to sending it the money as in any of the transfers from their bank account you give them a virtual account number on which they can transfer the money let's say if these customers are delinquent or maybe have forgotten to make payments you send them reminders but not just a reminder but you attach a payment link along with it and if let's say at the end of the day if you are sending somebody to their home for collections angle right there if you are equipped with collecting the money in a digital manner through let's say an EPOS application I think the way that digital collections has to be looked at is and it has always been this case and I think others on this call can also kind of confirm this angle right that you have to give every single avenue because what you are looking to do is basically recover the money that's the main thing that you are looking at in terms of innovation there are going to be hard challenges especially in areas where there are no smartphones I think that's going to be one of the toughest thing for any one of us to kind of solve given that maybe they are not used to even using their debit cards that have been given with their basic savings account they use to the cash model and cash fundamentally requires you to visit a place and withdraw money right I think what we probably are not taking into account over here is the just the will of humanity to survive and while I am kind of saying this lightly but this is I think one of the strongest force for all of us that all of us and every single person is just kind of looking to survive and if we are able to educate them during this time if let's say the lending company which is kind of doing a collection is able to educate them that hey if you have a whatsapp you can actually make a payment if you have let's say a smartphone you can make a payment if you are stuck with cash here are some of the mechanisms that you can follow to safely withdraw money from ATM if the need is there I think that education right now is very important and kind of calming the nerves is very important so I think collection is a very it's a game between technology and I think all of those have to be taken into account when you build a strategy from a payments perspective how it should work is that you need to give all the various options to your customers whatever they are comfortable with that is the hard work that you have to do on your end and when it comes to cash I think primarily right now sadly the only way out is to figure out and let them know of safer ways to withdraw cash if they just don't have any digital media while just to quick point to add is that even for people without a smartphone there is a payment mechanism the awareness of it is very low the USSD mechanism to make an IMPS transfer it requires a standard code like a star hash kind of a code is to be sent to transfer money the knowledge of it is very low maybe the lending companies can look at giving a good detailed instructions along with it when they ask for the recovery angle to be done so that's how I would kind of liquidate technology plus psychology both of this needs to play very well together for the recollections part to be made more modern I would like to add to that also Shishank very well put so Mutu the key thing is that when we went to the market also initially we thought the adoption of digital payments or this kind of you know New York Banking and this awareness and the usage would be very low in the tier 2, tier 3 cities but to our surprise today we serve almost 12,000 PIN codes in India and offline businesses also have also adopted very very well and this is one of the areas where as Shishank also rightly mentioned you could probably look at you know this is where API Banking or these kind of things become extremely handy wherein you can find out options which you can integrate to your system and provide all kind of solutions as a cash management collection system to your customers thank you next question we have from Manish Trivani can we have Manish Trivani hello can you hear me? yes we can Manish please go ahead so I just wanted to know that nowadays a lot of fintechs are resorting to pivoting their business I wanted to understand the opinion of how this will impact and how pivoting will play an important role and like how does it work so this is something that I wanted to understand okay okay Meghna you want to take that sure I think that startups have to be very very nimble and also learn I know in their journey right so pivoting sometimes can be quite instrumental if you take for example they were selling t-shirts and cups and they pivoted to selling you know garments in a paddle and that was a very good pivot right even Kadivach per se we started with serving law firms as our first product and it was more compliance oriented and in 2016 we pivoted to giving risk insights using data and that's something we learned when we spoke to our customers when our product initially hit the market and we got feedback so pivoting is good provided it's a well thought to strategy just because there's a covid crisis going on suddenly pivoting to do something in relation to covid which is a complete deviation from what we're doing today those kind of privates are not recommended you know a pivot should be very well thought to should be nimble you should adapt but don't kind of just pivot just for the sake of pivoting or pivot because there's a covid situation so suddenly I'll start offering services in relation to the covid just because that's the opportunity where that might not be the strength of what you're doing so it needs to be a well thought to strategy anyone else could work to add about pivoting situation so I would probably like to touch upon the finance angle as well here because what happens is today the pivot can be of two things so this is where it's critical to understand the shift in behavior that's going to happen during the short term and even as a permanency so we should really cut to the chase and see what kind of things would as a behavior change will stay with us for a longer time and if the assets you have built is going to be extremely useful to cater to the new normal then it makes sense to do a pivot because you are playing, leveraging on your core strength so that would also help you stay stronger or rather emerge stronger so there is no problem in doing such a pivot but as Meghana mentioned doing it as a knee-jerk reaction is something which we should avoid the next question that we have is from Raulia and we have this audio good afternoon everyone this is Takhar I work with Mindra Automotive Division just wanted to check with you in current scenario where automobile sales and service both are not happening and so do you see fintech startups or catering to the dealer fraternity where online retail customer can have a lot of options in bank bazaar or paisa bazaar but I don't see that happening for SME or a dealer fraternity secondly automation of the supply chain finance so dealer or SME deals with the banks and then there is a separate tie-up then the money comes into them and then the billing happens or the dispatch of the vehicles happens but there is no one integrated ecosystem where each and every three parties which are involved dealer, OEM and the financer can see a transaction straight through which ones are going to take this sure I think the problems you raise in terms of friction are perfectly valid questions and I think these are these have been both sort of affecting affecting transaction flows and reducing the size of the industry we are trying to approach it in two fronts I think number one from the from a public perspective from the government perspective there are a bunch of efforts underway to be able to make transactions for SMEs a little more seamless right there is a beam for lending app that is on the way to K happening you all would have heard of account aggregator right now there is a little bit of a delay in timeline given what is happening because of COVID but when these things were to come online you would potentially find that the transaction friction that has existed in the past goes away whether the results in a paisa bazaar like a bank bazaar like platform which allows for marketplace of multiple products is it large enough to create that depends to be seen unsure even today by the way a lot of MSMEs show up on a paisa bazaar and a bank bazaar as well at least speaking for their credit and lending needs I don't know for the other requirements all together now second piece which you said in terms of creating a single unified force for something like automobile loan or OEM lending loan sure valuable how valuable is it to create and how much would it change the industry altogether not sure which is probably why you know a player hasn't sort of taken up and done it yet because if there was very to be significant very to be created by that somebody would have done it for the cost to benefit outcome but given that maybe people are willing to bear with some pain in order to get their loan it has not yet been created as how I see it even when a bank bazaar launched I mean how many years back this close to I think 12 years back when a paisa bazaar sort of started out none of the products that they were offering and there existed agents in the market which had a similar sense of a marketplace now they've just reduced the friction and for a large enough consumer opportunities it has made sense to reduce that friction for the 70 million MSME opportunity will it actually do that don't know a player could actually start out and do it today when we at Leaning Card go to business while our core product is credit we allow the customer who has come there to be able to pick a whole bunch of products that we offer which are not our own products things which other customers are the companies we don't offer gold loans but we offer gold loans to a partner who sort of goes and offers the loan loads and we offer insurance to our customers both for the loans that they take and general insurance none of which we are not an insurance company we don't we just offer it as a reason so are we now a marketplace sure to an extent we are and I think as customers come and make the first transactions with a trusted partner they'll be willing to hear 20 other recommendations so to speak specifically to automobile ecosystem you know this dominated the structure is dominated by the large players so like a Mahindra and Mahindra okay the entire dealer chain of Mahindra and Mahindra is commanded by Mahindra itself first okay so unless until it is these initiatives are taken from that front it will be very difficult for fintech to enter a provider chain based solution or an automation the reason being is that you know as an institution whether it's a Maruti or a Tata or a Mahindra based on their rating they command a very different pricing power with the large banks and the design of those relationships are that the banks force them that the dealer should take the finance from those banks even if it is ineffective so you know there is a structural jam which has been created by the giants over there and it becomes very difficult in those kind of situations to seepin and build ecosystem or a product so because when I go to a dealer okay so the dealer says that hey I mean the SBI gives me at a 10% now SBI might be giving on a certain category of product which comes from a Maruti it doesn't give for anyone but the expectation the wrong expectation is set in the system so do we do certain loans yes we do certain loans as I was saying on a certain category we have started taking the leadership in those categories but the product or the chain necessity the automation or the entire tech blocks necessity the answer is yes but it cannot be done without the principal support the principal support has to be the large manufacturers who command the OEM dictation the terms and policies or the dealer dictation in terms of terms policy vehicle sale and everything because any of this system has to actually plug in to your CRM your purchase management system your sales system purchase management system in terms of OEM your sales management system in terms of the dealer supply chain where each and every part has to to be looked at the data has to feed into my system the way it works in a B2B sales environment so that when it comes to a B2B the organization has been more open but when it comes to vehicles the organizations are not yet shown the openness all right thank you Satyam so we just run out of time we'll just take one more question before we wrap up for today the last question from Pawan Laksh Pawan Laksh Hi sir, hello Yes Pawan, go ahead Yes sir, I am a finance aggregator startup actually Dai Lior Bank My question is that actually how going on the lending process like we are going to the aggressive in the market like my major concentration is an on-organized sector like we have a share with an ink rate and this clicks clicks capital new growth because they are funding for the on-organized sector like a swiping based banking banking based surrogate rate okay and the prospect we are going to concentrate sir if you can help me out it would be better sir Okay, okay not sure how should I give this one but Mr. Mithun sir, Mithun sir would be better because he is into a lending right No fair enough, I am not sure I got the exact report of the question were you saying will we be aggressive in the future in the market or not, was that the question Sir he wants to know that whether he should be aggressive because he works in the on-organized sector okay I think fair question sir but I think universally right now whether on-organized or wherever we might be I think the the ask that is to be prudent and not aggressive is my overall guidance and I think definitely in a thing like on-organized and sort of you know informal sort of unsecure system I would at this point at least the next six months the market would reward and your business would be well rewarded to be more prudent than aggressive where it would be aggressive is some sort of capability and the product I think Meghna spoke a bit about transitioning through a difficult time if you are tight on cash find a flat valuation go deeper on your product understand your customer more if need be and then come back in a year to sort of be more aggressive and think about it that's roughly the mind frame that I would keep and this is not limited to lending but I think definitely so in lending that's at least how I am approaching the next six months for lending card which is given the size that we are at and we have typically doubled every every year for the last four years but this year the market will reward us and I think it's also a right thing to do for people who invest in us to look at the year in a much more prudent manner as opposed to an aggressive manner so let me just add on to that you will have to broad based your supply ecosystem because being an intermediary you have to understand that you have to solve the problem for your customer and for solving the problem of your customers the traditional institutions with which you have been working might be a bit tipped in their response or they will be guarded in their response you should also look forward to work with some of the P2P players and I think one of them the leading one is or the larger balance sheet there is a fair set because you really want people to come forward and support the businesses wherever there is a genuine requirement which goes beyond the traditional way of underwriting so the thought process will be to broad based your supply network or the matchmaking on the supply side Thank you ladies and gentlemen so much we have a lot of questions but we have really run out of time so Siddharth I am sure it was very helpful for our attendees here and thank you for joining us as I see that despite a lot being said and I see that the FinTech industry is quite geared up to take on the situation the silos are breaking down so we will have collaborative approach and as Siddharth also said a little bit of push from the government if we get if the industry gets and not only the FinTech sector but the entire SME and the small business sector with benefit and Shashank added that they are working on our business new business models and everything it doesn't matter that we need to be prudent in whatever we do right now and try to get in there so thank you everyone so much great to have you all here for our webinar and hope to see you again soon and I would also like to thank our attendees for being here just a request at the end of the session there will be a short form survey form if you can just fill that in it will help us improve our offering in the future thank you so much everyone