He is an alumni of IIT Kanpur. He was working in the tech industry like most of us. And he had a flourishing career in a top notch Analytics major in Kolkata. But then, he did something that most of us will probably never do – he quit his high flying position and followed his dream. He is Anurag Jain – COO of a startup that is soon set to revolutionize the face of finance in India.
What is this Startup?
Anurag and his friend Manish, both ex bankers, have started Mandii. Mandii (which in Hindi translates to a marketplace) is a novel platform for Small & Medium Enterprises (SMEs) to garner finance from investors far more easily than from the conventional financial institutions. The gold standard for Mandii are the enormously valuable but ridiculously undervalued unpaid invoices these SMEs are almost waiting to be paid for.
What is so great about that?
Imagine you are a businessman who supplies stationery (pens, staplers, printer papers etc.) to blue chip companies like Infosys or Wipro or TCS. In this domain, the business works in a cycle of constant delays – you deliver a product today but get paid anywhere between he next 3 to 6 months. This causes a cash constraint for most businesses even though they are reliable, well managed, low risk enterprises. But these unpaid invoices of today are completely risk free promise-to-pay vouchers – do you think Infosys will ever miss their payments for 1000 pencils? So why can’t a financier lend you money on dint of these unpaid invoices that are sure to be paid in the immediate future?
Indian institutional investors (like your neighborhood bank or insurance company) are yet to tap into the enormous potential of this huge market – a market place inhabited by almost 5.5 CRORE low risk, high turnover entrepreneurs. Mandii has decided to take this leap of faith – connecting valuable SMEs to smart investors.
Who does this help?
As of today, most SMEs across the country carry on their businesses with loans that come at interest rates as high 40% p.a. (that is, you borrow 1 lakh INR today and in a years time you have to pay back 1 lakh 40 thousand. Even Hyundai doesn’t have such fabulous turnovers!) But amazingly, most of these high interest rate loans are paid back in full, that too within time. But, what if this huge market segment (worth approximately $50 Billion) could be provided this same fund at cheaper rates and via an easier mode? No more haggling with the local loan sharks, no more running around with documents to banks, no more seeing good businesses slowly dying because of a lack of 5 or 10 lakh INR. Mandii promises a simple platform for good but cash-strapped businesses to meet prospective investors and get short term loans at great rates.
EVERYONE! Mandii is a Godsend for both stable SMEs & dynamic investors. BONGFeed spoke to an investor & an SME currently using Mandii’s platform. The young Kolkatan investor was delighted with the amount of background check Mandii had done on the SMEs looking for loans and how easily he could see beyond tons of paperwork and judge the true merit of a borrower. The room to maneuver for investors & the quick payback of his loan (in less than 3 months) were added bonuses for him.
The borrower we spoke to, a garment manufacturer from Kolkata, dealing with brands like Pantaloons, FirstCry, Big Bazar & Flipkart was even more elated with Mandii. We quote him here – “Most institutional investors offer an umbrella but take it away when it starts raining”. He was simply talking about banks never showing up to fund SME businesses when they are in dire need. The highlight of his experience with Mandii was the processing speed – no red tape, nepotism or mountain high paper work like they have at national banks. He is now relieved that as long as Mandii was present, he wouldn’t have to go back to loan sharks dishing out super high interest rates. His business has benefited immensely from Mandii introducing him to an investor with vision.
Kolkata, being a major hub of garment trading & wholesale markets (think entire Burrabazar!) is a key landmark in Anurag’s roadmap. The average Kolkata businessman runs a high return but unorganized & slow turnover enterprise. Mandii is trying to hand hold this unorganized bulk of entrepreneurs and teach them the ropes of funding basics while introducing them to smart & savvy investors. A collateral benefit of Mandii’s efforts are going to be gained by the institutional investors – they will soon find many a business they deemed too risky to invest in earlier becoming profitable & well documented with help from Mandii.
So what does Mandii offer?
Mandii offers 2 things – an investor ready to invest in an SME with valid invoices & an SME with stable, promising, verified assets & clean backgrounds looking to borrow funds against its unpaid invoices. Anurag mentions that once the one time verification of an SME is completed, it takes less than 72 hours for them to post their invoices (& request for funds) & finalize a deal with an investor. For the investors, a list of verified & risk assessed borrowers are available to choose from.
A final word…
A fast developing country like India is currently betting on the growth of its middle class entrepreneurs – manufacturers, wholesale dealers, suppliers, service providers who are not backed by the overflowing purses of their families or supported by big banks. But the conventional financial institutions are not even close to as dynamic as they need to be to support or gain from this hugely lucrative sector of Small & Medium businesses with potential. Mandii has made a foray into this unorganized sector & will probably turn this often neglected pool of Indian entrepreneurs into a booming & profitable force to reckon with. We wish our local hero Anurag & Manish Godspeed!
If Make In India is the mantra of India today, then Mandii is the priest chanting that mantra the loudest!
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