Fuelling SME Growth

Small and Medium Enterprises (SME) are a significant contributor of growth in developing economies like India, but their own growth is often constrained by a lack of access to formal finance. They have to rely on internal accruals or informal loans from acquaintances to start and run their businesses. Sensing the huge opportunity that this anomaly presents, a number of startups have sprung up in the last few years to address the different financing needs of SMEs.

Launched in 2017, Minfiti is a leading supply chain financing platform that caters to the inventory financing needs of SMEs across industries using cutting-edge technology and corporate distribution network.  

According to Ankit Mehta, Co-founder and Chief Architect, Mintifi has been profitable since fairly early in its journey, thanks to a conscious decision to take measured steps and not be ruled by a short-sighted approach and challenges. In the last two years, Mintifi has grown nearly tenfold and is expected to maintain this momentum in the coming years.  

Global Tailwinds 

Mehta is unperturbed by the global tailwinds on account of the supply chain disruptions caused by the Russia-Ukraine war, rising inflation, slowdown in the US, and their impact on funding activity.  

"India has been rather calm amidst all the external chaos. The rate hikes by the RBI have also been gradual; expectations of the public have been managed so well that a lot of startups have been able to raise money and garner attention from the global investor community," says Mehta, adding, "As they say, a smooth sea never makes good sailors, so these are short-term challenges that one must take in stride. Fortunately, we’re not foreseeing any long-term challenges." 

Going forward, the company wants to invest in developing its capabilities and services and making its offerings more nuanced to make them a better fit for its partners, whether on the supply chain financing front, credit assessment, end-to end automated receivables management system, dealer management system, etc..  

On the recent layoffs by several startups, Mehta says, "A very haphazard strategy and not sticking to your guns is actually the root cause for the whole ‘hire and fire’ debacle we are witnessing."
 
Layoffs and a global investment crunch have rocked India's startup ecosystem in recent months. In anticipation of future tougher macroeconomic conditions, both startups and giants may take cues and reduce their headcounts.