While people are shopping more on credit, they are paying back too through the traditional BNPL — a form of buying at local stores without paying upfront– at the millions of mom and pop stores, it said.
Most of these shops usually struggle to get their dues back in time, however, this festive season saw more than 30 lakh customers coming forward to settle their credit. Merchants in eateries, school supplies, travel, jewellery, and Kirana shops saw the highest growth in customers, OkCredit said.
It said more repayments have enabled merchants to extend more credit, which in turn has led to a growth in customers. Credit given per active merchant on OkCredit went up by 23 per cent and these merchants added 1 million customers in the festive period.
“Digital payments have played a huge role in helping mom and pop stores recover credit. As per OkCredit’s data, the number of credit lines settled digitally have gone up by 100 per cent since last year, showing adoption of online payments in digital bookkeeping,” it said.
The increased repayments and growth in retail SMBs (small and medium businesses) also points to a healthy recovery in the economy, especially tier-2 and tier-3 towns, as these towns account for a significant chunk of OkCredit’s merchant base, it said.
There has been a 70 per cent increase in retail SMBs adopting a digital solution to manage their books, it said, adding out of 35 states and union territories, 25 have seen business growth as compared to the last year.
Others have remained more or less stagnant. Merchants in states such as Kerala and Karnataka have seen 8 per cent growth in business. The North-Eastern states have seen the highest growth, topped by Manipur where transactions per merchant increased by 22 per cent.
“SMBs were among the worst affected during both the first and second wave of COVID.
While the festive season brought cheer to several sections of the economy…It was heartening to see credit recovery being high,” Gaurav Kunwar, Co-founder and Chief Product Officer, OkCredit stated.
The Indian retail segment comprises over 60 million (6 crores) local businesses, representing 95 per cent of the USD 1.1 trillion retail market, it said.
Digital adoption is rising rapidly among retail SMBs with a lot of them using digital bookkeeping and payment solutions for business growth, OkCredit said.
OkCredit was founded in 2017 to help millions of SMBs across the country to manage their credit and receivables.
