Many businesses witness high growth in sales on the weekends. But most merchants remain out of cash for 3-4 days making it difficult for them to pay suppliers, manufacturers, or staff.
Early Credit is a short-term credit solution designed to address this particular need. It is a short-term fund that small merchants can avail and is credited to their account every Friday based on the anticipation of the previous weekend sales. PayU’s 4.5 lakh merchants can avail credit amount starting from Rs 25000 up till Rs 50 lakhs.
According to a recent survey by Indifi in the last few months, 34% of retailers and 38% of e-commerce players found accessibility to credit a challenge in August compared to 58% of retailers and 30% of e-commerce players in June. Although businesses have recovered a bit, it is a clear indication that it will take more time to revive completely compared to pre-COVID days.
Early Credit can also be used during bank holidays when businesses don’t get paid, causing further delay in their operations. The product has gained traction since its launch with 20% of merchants already leveraging it for running their businesses.
In a statement, Alok Mittal, CEO, and Co-founder, Indifi Technologies, said, “The core objective behind this product is to accelerate the revival process of small and medium businesses while also boosting their sales during weekends, without worrying about payment delays, even during holidays. This will act as a support system for merchants to ensure smooth sailing without any shortage of credit.”
“Working capital and credit has traditionally been a constraint for small and medium businesses as they are often unable to access formal channels for loans. The pandemic has only exacerbated the issue. Working with Indifi, we will offer our merchants digital credit solutions to tackle a issue in their day to day operations and to help stimulate growth,” said Noopur Chaturvedi, Country Head – SMB Businesses, PayU India, in a statement.
COVID-19 has affected retail and e-commerce businesses, mainly in the form of extensive lockdowns, ceasing operations of shops and companies across India. This has also resulted in the growing reluctance of formal lenders against weak and slowly-reviving players. However, with Indifi’s early credit solution, every business can ensure operational continuity and continue to serve customers even during a crisis.