According to RBI, the total demand for external credit by the MSME sector in India is estimated to be about INR 37 trillion. Meanwhile, the overall supply is limited to about INR 14.5 trillion only.
The credit gap sits between INR 20-25 trillion.
In recent years, neobanks have emerged to be the major player filling this gap.
They’re not only offering businesses core banking solutions but helping them secure loans at cheaper and better interest rates compared to traditional banks. They’re constantly simplifying the entire process and ensuring the entire Indian business sector remains financially strong and stable.
So, what are the other ways in which neobanks are aiding the small businesses in India?
Let’s find out.
Convenience
Convenience is always the first thing that any business looks for, especially when it comes to financial activities. Neobanks have brought down the overall turn around time for time-consuming activities like integration, banking, reconciliation and more. Probably the reasons why they’re becoming the most preferred way of banking among businesses.
Round The Clock Business Banking
Unlike traditional banks, neobanks enable you to carry out banking services round the clock. You don’t have to wait for your bank’s branch to open to do banking activities. Simply login to their app do the needful.
- make 24*7 payouts
- Individual and bulk disbursals
- Process refunds
- do NEFT, RTGS, UPI, or IMPS
Easily And Effectively Track Business Finances
Besides transacting money easily and effectively, businesses can also track their funds in real-time.
- Maintain financial records
- View all transaction details in one single place
- Track the organisation’s overall financial liquidity
- Get overview of business revenue, expenses, and savings
- Create and customise saving buckets for various business needs
Additionally, businesses can access and download financial reports to analyse business potential and make informed decisions.
Digital Onboarding And Account Opening
Opening a bank account for every employee hired is a very tedious task.
In fact, it usually goes like this:
Inform the partner bank> Get a bank representative to visit the office > get employees to complete the formalities < other paperwork and documentations
Neobanks simplify this hefty activity. Employees can open a bank account linked to their respective organisations in a matter of 2-5 minutes. This means automation, less wastage of time, and better business/employee satisfaction.
International Payment & Remittances
Now businesses do not need to contact their partner banks to enable international payment and other features. They can simply use a neobank’s services to streamline both national and international payments.
- Hassle free activation upon signup
- Make instant individual and bulk payments and remittances
- No additional convenience fee
- Real-time currency conversion
- Support all major currencies
- Competitive pricing
- Settlement in a currency of choice
Lending And Credit Facilities
Lending and credit facilities offered by traditional banks are usually lengthy and time-consuming. Every step requires extensive paperwork, multiple verification levels, references, approvals, and extensive collateral review of financial books of the borrower.
Neobanks are streamlining these services and making it easier than before for the underbanked and MSMEs to get a line of credit for their business needs.
- Comparatively lower interest rate
- No extensive levels of verifications, need for references, or approvals
- Comparatively fewer levels of sanity and financial checks
Transparent Processes
Transparency is another mantra on which neobanks operate. Generally, neobanks provide real-time explanations of all charges and penalties levied to a customer. They offer user friendly dashboards which helps maintain a level of trust between the two parties.
The reason why neobanks are able to deliver on the above-mentioned features/promises is because of their preset priorities and focus on helping businesses achieve financial stability.
So, what are your thoughts? What is the future of neobanks and what can we expect from them?
Let us know your thoughts in the comments below.
