Credit and finance for MSMEs: Private lender Kotak Mahindra Bank on Wednesday announced the launch of its Merchant One Account for banking and other business-related needs of MSMEs including small retailers. The current account would offer a number of services including keeping a digital ledger, recording customer databases, ordering stocks digitally etc. Available in two variants Merchant One Account and Merchant One Premium Account, the merchants won’t be levied non-maintenance charges if they miss maintaining the monthly average balance in this account.
“Merchant One Account helps them bill, create customer database, run campaigns/offers, track payment, inventories, place orders and more – all digitally. It is a unique proposition that helps merchants digitise their daily business processes through smart automation. Merchant One Account helps retailers increase efficiency and add capabilities that are usually found with the organised retail sector,” said Thakur Bhaskar, Senior Executive Vice President & Head – Liability Products and Merchant Acquiring, Kotak Mahindra Bank.
The account allows retailers to also collect payments using point-of-sale (POS) or mobile through QR, UPI, cards or by sending links to pay, scan goods with Kotak One POS for generating bills digitally, create customer database while billing, send offers to all customers using free SMS facility, track receivables with digital ledger and automate payment reminders, keep track of inventory and place orders digitally, get analytics of daily sales trends and customer purchase history, create online store, get order alert and list on their POS terminal, avail overdraft facility for business requirements.
Lenders have increasingly been catering to MSMEs to digitise their operations as the MSME sector has largely remained bereft of the adoption of digital solutions. Earlier this year, ICICI Bank launched digital solutions for MSMEs under the bank’s updated InstaBiz app such as access to instant sanctions of overdraft (OD), fully digital and instant current account (CA) opening through video KYC and a set of value-added services on a single platform.
HDFC Bank also last month had announced the launch of SmartHub Vyapar Merchant app, a payments and banking solution that enables merchants to accept interoperable payments across multiple payment modes which include Cards, UPI and QR code.
Digitisation of MSME-related products assumes significance as the Reserve Bank of India (RBI) aims at digitising funding process end-to-end. Addressing the FICCI’s banking conference FIBAC 2022 on Wednesday, Das said the central bank hopes to launch digitised KCC and SME loans sometime during the calendar year 2023.
The central bank in a statement in September this year noted that the process for getting credit in rural areas for small businesses, ancillary industries and farmers is not very smooth. It requires the customer to visit a bank branch in-person along with the proof of land ownership and other documents and sometimes, the customer may be required to visit the bank branch multiple times, the RBI had said. Digitising the entire process would MSMEs save time and resources deployed in securing bank credit.