OkCredit: Making transactions easier

Aditya Prasad, Gaurav Kumar, and Harsh Pokharna used to buy grocery on credit from a nearby store, but settling it was a tedious process. The problem was in the way it was recorded — Sometimes on register, sometimes on loose scraps of paper, leading to a mismatch in their and the shopkeeper’s accounts. They realised that it wasn’t just happening with them but several other customers visiting the store were also troubled by this. There was a clear opportunity to build something that would help, not just the shopkeepers with record-keeping but customers as well. And thus, was born OkCredit that currently has over 2.4 crore registered users on the platform of which 5.5 million customers are recording transactions on the platform.

 OkCredit uses the power of the internet and technology to bring micro-businesses online. With the OkCredit app, every time a credit purchase is made the merchant sends out a message to his or her frequent customer. This app also enables the end customer to view his/ her outstanding balance with that particular merchant via a webpage link which provides a monthly breakdown of credit purchases. This improves transparency in business transactions and facilitates a higher degree of trust among the participating individuals. Harsh Pokharna, Co-founder and CEO, OkCredit, shares the journey of his start up 

Challenges

 The biggest challenge for adoption of digital tools, including ours, is trust and inertia. Merchants have been using registers traditionally and would not trust a software, when it comes to finances. “However, by demonstrating the efficiency and convenience of our app, we have been able to attract a large number of merchants on our platform”, says Harsh.

 Secondly, credit transactions (between small merchants and customers) are usually stronger in tier 2 and 3 towns as the customer-merchant relationship is strongest in small towns. But most of these transactions are still made in cash. Also, as the suppliers to small retailers generally deal in cash, the merchant does not have an incentive to make bulk purchases of stock using digital means. This is a big challenge in the adoption of digital solutions by merchants.

 Achievements

 OkCredit is helping unorganised businesses to digitise their business and in the process become part of the mainstream organised sector. We are facilitating regular communication of SMBs with customers thereby bringing an element of transparency in the business and fostering trust among participating individuals.

 With a reach across 95% pin codes in India, OkCredit is helping small shop owners expand their business by assisting them to keep a track of their borrowers and get their credit back on time, without having to leave the shop. This has played a huge role in bringing the SMB community back on their feet during the Covid times as we helped merchants get back their outstanding dues and thus restart their businesses.

 India’s total GDP stood at $2.6 trillion in the year 2020 of which OkCredit captured 0.5% in terms of the total value of transactions on its platform. This was made possible through over 800 million transactions on OkCredit’s platform in 2020 and amounted to $40 billion worth of transactions. We also added over 70 million new merchants in the same year.

A word of advice

 “I would recommend budding entrepreneurs to focus on building a robust, feature-rich product that solves a specific problem or addresses the specific need of customers. This will enhance the chances of the acceptability of the product or solution and lead to better customer retention. Moreover, this will support the organic growth of the company by generating positive word of mouth through satisfied customers”.

Future

 The three co founders intend to create an ecosystem of digital solutions for small businesses to help them manage their business tasks such as digital bookkeeping, staff management besides creating an online presence to compete with more organised players.

 “We see the number of SMBs who will be interested in exploring digital solutions towards business objectives going up significantly in the coming years. Hence, we have scaled up from a single product company to a multi-product company solving problems for different segments of the diverse SMB base. We identify the unique value of network effects in this and have also started pursuing that towards delivering more value to them”, says Harsh.