Credit and Finance for MSMEs: In a bid to help enterprises and business owners with instant credit access, Chattisgarh-based small and medium enterprise (SME)-focused fintech startup GimBooks has launched a new credit card called ‘credit-on’ card in partnership with Delhi-based credit card-focused fintech startup RedCarpet. The new card would be available in physical format along with a digital version available on the GimBooks app named GimBooks Card.
According to the company, the card would enable users to convert a bill or a specific transaction into EMIs at a low-interest rate with its Card Swipe to EMI feature. “The users will be able to avail credit depending on the nature of their business, location, and other parameters, without going through the cumbersome elaborate documentation process. Further, they will be able to avail up to 45 days of interest-free credit period on each month’s spend,” Harmeet Singh, Strategic Partnerships, RedCarpet, told Financial Express Online.
RedCarpet is essentially looking to onboard small business owners, particularly kirana stores onto the organised financial lending system as they don’t have much credit facilities available, said Singh.
The shorter time taken in disbursing credit through the GimBooks Card “will ultimately help merchants with more flexible working capital to fulfil their purchase requirements,” said Yash Raj Agarwal, Founder & CEO, GimBooks. Moreover, it can be used for all types of transactions, and is enabled with an ATM withdrawal facility with minimal charges to facilitate easy cash withdrawals, Agarwal added.
Through the partnership, RedCarpet aims to support more than 2 lakh small businesses next year with the new credit card. The company is also looking to penetrate deeper into the nation’s SME and kirana segments to cater to their working capital requirements.Self-employed individuals aged 18 to 55 years with a valid GST number of their businesses can apply for the GimBooks Card on the app. The physical card can be availed by submitting the KYC details.
GimBooks and RedCarpet partnership comes amid Covid recovery for micro and small businesses including kirana shop owners that were impacted significantly during the pandemic due to the lockdown restrictions leading to limited labour movement and supply chain disruption. While the government had introduced credit-related schemes for MSMEs to tide over the working capital crisis, but a number of micro and small enterprises have continued to grapple with issues around credit access. In fact, the total gross bank credit of Rs 13.20 lakh crore deployed to the MSME sector in September 2021 by banks was only 12.04 per cent of India’s overall gross bank credit of Rs 109.56 lakh crore, as per the data from the Reserve Bank of India, indicating the credit gap in the MSME sector.