As, we all know PayTM and PhonePe are dominating the digital payments market. But, now BharatPe is becoming a partner for India’s 50 million SMBs. BharatPe is aiming to build a $100M loan book.

In April 2019, Venkat got into a problem. As, he was in debt of Rs 3.25 lakh, which he took for his daughter’s college education. For, him it was omly possible to pay the half amount from his savings, but still he needed to raise the remaining amount. He looked after the option of banks, asked them to fund him, but all banks asked for personal guarantees and collateral.

On one evening, Venkat got a call from a BharatPe executive, that the company will grant him a personal loan based on the cash flow of his pharma store. Even, in less than 48 hours, Rs 2 lakh was transferred to Venkat’s account. He paid his dues. This collateral-free loan solved the problem of Venkat.

Still for BharatPe, it would be paid back on a regular basis, from every QR code transaction, which would be made in Venkat’s store. According to the reports, it has amounted to Rs 2,200 per day. So,Venkat will still have Rs 6,000 as daily earnings, after paying BharatPe.

“I paid off my debt just before the pandemic. Now, business is booming because we are in the essentials list and our businesses did not suffer through the lockdown,” he told in an interview.

Delhi-based startup BharatPe was founded in March 2018 by Ashneer Grover and Shashvat Nakrani. This have reached even more than four million businesses with its QR codes.

Till, April 2021, BharatPe goals are to make more than $1 million in interest income just by helping businesses be free from merchant discount rates. And saving on monthly payments to SaaS or CRM companies or by bookkeeping companies.

“The Indian SMB is hardwired to pay interest. But SMB owners need not pay additionally for the convenience of technology. Their gross margins are less than 15 percent. They want solutions that can put cash in their hands and not take it away from them,” Ashneer told in an interview.

How To Grow into lending?

When BharatPe grants a loan, they ask for the PAN details of the owner, provided on the merchant app, and checks all the defaults.

“The premise was we need visibility in our QR, and we will underwrite you through how much business you do through our QR,” says Ashneer.

He further added that the startup do a $100 million loan book, it may break by March 2021. According to the current situation, its burn is $1 million a month, which is coming down.

Market landscape

BharatPe is launching a closed-looped credit card, through which a retailer can buy goods from a distributor in just by one swipe. The distributor will receives his money, by the NBFC while BharatPe, will further recover the money from the retailer by a period of three to four months.

The startup has garnered $250 million in June through QR code payments, and further disbursed more than 32,000 loans. BharatPe has dome partnership with two NBFC partners for expanding business, and for the QR code, they have partnered with ICICI Bank and Yes Bank. It has also applied for an NBFC license and is still awaiting for the clearance.