According to data gathered by OkCredit basis the behaviour of the users, the micro retail players are increasingly taking up digital book-keeping solutions, as it makes this task simpler and there is a demand coming from small towns and hinterlands.
In the unlock phase of Covid pandemic, OkCredit has witnessed a recovery in demand for its app from tier 3 cities followed by tier 2 and tier 1 cities. OkCredit’s business from tier 3 cities witnessed 33% growth in the period of February – September 2020 while Tier 2 and Tier 1 cities registered 30% and 28% growth respectively during the same time. This is after a dip of 26%, 31% and 38% in business from tier 3, tier 2 and tier 1 cities respectively in April this year.
Sixteen of thirty-six states have recovered to business activity levels that are higher than pre-Covid times. Bihar, Haryana, Assam, Rajasthan, and Himachal are the states where business activity is 10+% higher. Uttar Pradesh, Madhya Pradesh, Chhattishgarh, Odisha, Jharkhand, Uttarakhand, and Punjab are the others that are already exhibiting higher business activity. Out of the 19 states that are yet to recover, Karnataka, Maharashtra, Gujarat, Andhra Pradesh, Tamil Nadu and Delhi are trending at 90–95% of their pre-Covid activity levels.
The company witnessed double-digit growth in business from medical and kirana stores at 21% and 15% respectively in September 2020. This was after a dip of12% in business from medical stores and 22% from kirana stores in April this year. Both mobile recharge and electronics category registered modest growth of 5% in September 2020 after a dip in April this year.
Harsh Pokharna, Co-founder and CEO, OkCredit, in a statement said, “It is interesting to note that amid the Covid pandemic, remote towns are emerging as the torchbearers for the digitization of the MSME segment. And they are showing exciting activity and growth as the economy pushes hard for a V-curve recovery.”
Positive word of mouth by migrant population who have experienced digital tools is driving the adoption of digital book-keeping tools among small businesses in remote towns of India. This bodes well for India’s digitally connected future and presents a big opportunity to technology service providers to further capitalize on the digital bookkeeping opportunity presented by the MSME segment. Empowering micro and small businesses are crucial for the next stage of social and economic growth.
Given the current scenario due to COVID-19, more consumers are looking online and this provides the potential for MSMEs to transform and build on digitisation of their businesses.