As the past couple of years witnessed a drop in data costs, WhatsApp has successfully replaced the traditional offline messaging service as the primary mode of text communication in India. Leveraging this fact, this messaging platform launched WhatsApp Business – the pilot for a dedicated mobile app exclusively for businesses – in early September 2017.
Since its launch, popular brands in India such as BookMyShow and MakeMyTrip have been using this Facebook-owned WhatsApp business strategy to connect with their target audience. Though there are many apps that cater to business users, a messaging platform like WhatsApp provides a wider scope for a larger number of businesses, be it the local grocery store, professional services, medical institutions and even the government.
- FREE OF COST
You read right! WhatsApp Business lets you list your business and contact your customers at absolutely no cost. With a popular messaging app enabling business owners to send service messages for free, this could mean a gradual decrease for the conventional, but costly SMS facility. This WhatsApp business plan also counters the need for SMEs to create a mobile presence by designing smartphone apps, a distinct advantage for young enterprises from a cost and complexity perspective.
- DESCRIPTIVE BUSINESS PROFILES
If you own a small business without a website, WhatsApp Business allows you to describe your business in detail, and you can fill in addresses, contact numbers, social media links, etc. that lets your clients know more about the nature of your operations. The app takes verification seriously; a green tick appears against the name of your business when WhatsApp Business has corroborated the details you had provided.
- MULTIPLE MESSAGING OPTIONS
This unique feature of customized reply settings on WhatsApp Business ensures that you are customer-ready at all times. The ‘Quick reply’ option lets you set up standard responses to frequently asked questions. To all new leads who get in touch with you, the ‘Greeting message’ can introduce your business and what makes you different. You can also frame a custom ‘Away message’ for communications during off hours or when the small business owners are busy.
- BUSINESS ANALYTICS
More communication also means more data, which can be leveraged to understand your customers better. WhatsApp Business offers messaging statistics, a feature that provides metrics on the number of messages that were sent, delivered and read. Using this information, you can analyze the frequency of response from your leads or customers, modify the content of quick replies and experiment on the strategy of communicating with them.
- WHATSAPP WEB SERVICES
WhatsApp Business supports its projection via WhatsApp Web, which lets you manage the service through your computer without the mobile app. It provides additional efficiency when interacting with clients and partners, and leaves automation possibilities open as the system grows.
Setting up WhatsApp Business
WhatsApp Business in India is present only on the Play Store; so you will need an Android smartphone to use the app. As every WhatsApp account can be linked to unique mobile numbers, you register on this WhatsApp for business by using your official business number or your office landline.
Keep these ready before you set up the WhatsApp Business app, the steps for which are given below:
1. Backup your chat data to cloud storage if you already have a number which is primarily used for business with WhatsApp. Click on Chats>>Chat Backup>>Backup to upload to the cloud.
2. Download the app from the Google Play Store, install it and then launch it by tapping on the new WhatsApp Business icon.
3. Enter your business phone number that will be used to communicate to your customers, and verify it using the SMS (for mobile phones) or ‘call me’ option (for landlines).
4. Restore the previous chat related to the number once verification is complete (from Step 1).
5. Fill the name of your business and from the chat section, tap on the menu button and head to Settings>> Business settings>> Profile. Here, you can fill in all the details that you want to share with your customers.
What’s in it for small businesses?
WhatsApp Business is extended only to small businesses, an exclusivity that budding entrepreneurs can use to their advantage. The WhatsApp for business marketing aims at streamlining and extending the reach of small businesses without making hefty investments in website development, mobile app creation, customer support, and more.
Moreover, it helps notch up the idea of personalized marketing, as you can use the app to share images of products and promotions periodically to your loyal band of customers. The WhatsApp Business app also offers credibility to small businesses – a green tick against the name of your enterprise verifies the genuineness of your services and operations, an aspect that will help a majority of SMEs to reach out to a wider audience.
There are nearly 230 million WhatsApp users in India, and the fact that everyone knows how to use this WhatsApp for business use eliminates the time required to learn the nuances of a mobile application for businesses. Thus, WhatsApp Business is a ground-breaking solution to the communication and marketing needs of small businesses. We expect the introduction of WhatsApp Payments to act as a catalyst for this business with WhatsApp option to implement artificial intelligence, data analytics and voice recognition technology to optimize it into a powerful sales and marketing channel for small businesses.
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The Goods and Services Tax (GST) has been the biggest tax reform in India since 1947. Analysts also expect that it will have a huge impact on various sectors of the Indian economy, especially the service sector. Of the segment comprising banks and non-banking financial companies (NBFCs), the fund-related, fee-based and insurance services will witness significant impact as a result of GST implementation and will see shifts from the way they had been operating earlier.
What is really implied by financial services?
The term ‘financial services’ has not been specifically defined by the GST law. However, to understand the implications of this tax on the financial services sector, we need to consider the supply of goods and services that involve the extension of credit support. These services include but are not limited to:
– Hire purchase
– Conditional sales
– Securitisation or assignment of receivables
– Acquisition or sale of shares and securities
The compliance towards GST can take some effort in the above fields because of the nature of operations conducted by banks and NBFCs concerning credit products, lease transactions, hire purchase, actionable claims and other funds and non-funds-based services.
The GST rate on banking services and services provided by the NBFCs has been raised from 15% to 18% with the execution of this reform from July 01, 2017 onwards. The GST impact on financial services may further be classified into the following sub-sections:
1. Network of branches to be registered separately
Before the implementation of GST, a bank or NBFC with operations spread across India could discharge its compliance on service tax through one ‘centralised’ registration. After GST regulation, these institutions will be required to get a separate tax registration for each of the states they work in.
As a destination-based tax, GST has a multi-stage collection system. In such a mechanism, the tax is collected at each stage and the credit of tax that was paid at the last stage is available as a set off at the subsequent stage of the transaction. This transfers the tax incidence to different entities more evenly, and helps the industry through improved cash flows and better working capital management.
2. Leveraged and de-leveraged Input Tax Credit
Earlier, banks and NBFCs had been majorly opting for the reversal of 50% of the Central Value Added Tax (CENVAT) credit that they avail against the inputs and input services, while the CENVAT credit on the capital goods was given without any reversal conditions. Under GST, the 50% of the CENVAT credit that was availed for inputs, input services and capital goods has been reversed. This leaves banks and NBFCs with a decreased credit of 50% on capital goods, and in turn raises the cost of capital.
However, this can be counterbalanced by the advantages posed by operating one’s business in the new taxation scenario. A unified domestic market can help with more opportunities for expansion and reduced production costs enhancing one’s profitability.
3. Evaluation and adjudication
The impact of GST on banking services and NBFCs will also be felt in terms of evaluation procedures. Service tax was assessed by the particular regulators in the state where a branch is registered. In addition, every registered branch of the concerned bank or NBFC had to validate its position for the chargeability in the respective state and provide a reason for utilising the input tax credit in various states.
The GST assessment will involve more than one assessing authority, and each of them may have a different judgement for the same underlying issue. Although such contradictions can prolong the decision-making process for the financial institutions, the adverse effects of evaluation by one authority can be offset through decisions made by another assessor.
Impact of GST on banking sector – General services
Banks in India have been levying service tax on most transactions enabled by their systems. These include but are not limited to digital fund transfers, issuance of ATM cards and chequebooks, and ATM withdrawals beyond a specific limit. With GST on financial services, these services will be taxed at the rate of 18% instead of the 15% service tax rate that was being charged earlier. For example, if you withdraw money from an ATM other than your bank’s ATM after exceeding the “free transaction limit”, you are typically charged Rs 20 plus a service tax, which comes to around Rs 23. With the imposition of GST, this amount will go up to Rs 23.60.
However, deeper analysis reveals that such an increase in cost should not be considered a negative GST impact on financial services sector. In the long run, banks will be able to transfer the advantage of input tax credit – enabled under GST – to the customers. Furthermore, services like fixed deposits (FDs) and other bank account deposits that were outside the circle of service tax will continue to remain outside the GST ambit.
A major advantage of GST on financial services and other sectors is that it is a transparent tax and has reduced the number of indirect taxes. It integrates different taxes and ensures that the tax burden is fairly divided between different entities involved in the system. In addition, GST is essentially technology based. The advanced software systems used in its calculation and filing works will reduce the chances of manual errors and will lead to better decision making.
Capital Float too experiences the effect of GST on banking and NBFCs. We find ourselves in the 18% tax bracket, and we maintain our statutory lending policies including low-interest rates and quick disbursement of funds. Taking into account the GST impact on financial services sector, Capital Float will continue to provide the best credit solutions to its clients, customized to adapt to the changes brought by GST on SMEs in various sectors.
Oct 24, 2018
Many start-ups are launched, propelled by a brilliant idea, but often face tough times due to inadequate funds. The first impulse is to turn to banks, which, however, usually refuse requests for a loan for business without security. They also ask for plenty of documents to corroborate the need for the grant and the purpose that it will be used for.
A parallel source of finance for small businesses come in the form of non-banking financial companies (NBFCs). Traditional NBFCs offer loans on terms similar to banks, but they do not hold a banking license. In addition, unlike banks, they cannot accept deposits from public. Other than loans and credit facilities, they can offer retirement planning schemes, money market instruments and underwriting activities.
While small and medium enterprises (SMEs) have been turning to banks and NBFCs to get loans, the long-drawn process from application submission to disbursal of funds is still a deterrent for many. After the financial crisis of 2008, there was an even greater need for reliable sources of business finance. Interestingly, the digital technology that gave rise to online banking and e-commerce was also progressing at a fast pace in the same period. This helped to create a new segment of NBFCs in the form of financial technology, known as FinTech companies.
With the aid of complex analytic tools, FinTech companies evaluate credit risk by using an array of customer data, including their digital footprint on social media, e-commerce platforms, smartphone usage and geo-location.
How are business loans by FinTech lenders more convenient than traditional loans for borrowers?
Conventional NBFCs do not usually have a human-centric approach to lending. The lengthy and cumbersome process of applying for business finance that requires piles of physical documents tires out borrowers. Young entrepreneurs who are eager to expand their operations and are confident about returns on their investment cannot afford to wait for long. Also, delays in work can also harm their long-term business interests. They need an alternative source of funds that can cater to their needs more actively.
What draws the digitally perceptive entrepreneurs to a FinTech company is its ability to offer quick loans at competitive rates of interest. Such companies have a holistic approach towards risk assessment and do not ask for heaps of paper-based documents before they start considering an approval for the loan. The basic files needed to check the creditworthiness of the borrower can be uploaded on the encrypted portals of FinTechs.
The advanced machine learning algorithms that these lending platforms employ read through information such as the net earnings of a business, the educational and professional qualification of its owners, the location from which the business operates and the returns on investment that it drew in the past one year. In comparison to this, a traditional NBFC loan is issued to companies that have been in business for at least 3 to 4 years.
Summarily, the prime reasons for which business borrowers prefer FinTech platforms are:
Simplified application process – Instead of visiting a branch in person, they can apply for the business loans from anywhere and at anytime. As the process is digital, all they need is a reliable Internet connection and the soft copies of minimal documents.
Swift funding – Unlike conventional NBFC loans, the funds from a FinTech corporation do not take long to be approved and disbursed.
No prepayment penalties – To make up for their loss on interest due to early pay-off on the loan, banks as well as most NBFCs charge a percentage of the loan amount as penalty. This is not the case with new-age technology based lending organisations. If a borrower can afford to make complete payment on the loan earlier than its stipulated tenure, there are no extra charges.
No hidden charges – You may on occasions have felt surprised when a bank or NBFC told you that there would be a payment protection “insurance premium” charged on your business loan. In the traditional lending sector, such charges are normal. The lending institutions claim that these help in protecting the monthly loan instalments in case sudden sickness or an accident prevents you from making payments on the loan. FinTech organisations do not include such clauses in their agreements. The funds are granted for business expenses in the short term and are approved based on the ability of the borrower to pay back.
The ability of FinTech firms to trawl the online portals and gather data relevant to the borrower’s paying capacity helps in affording more growth opportunities to start-ups. Many SMEs in India have reasonably strong business models, but they still cannot manage to get funds from banks and traditional NBFCs. This shift towards technology-backed alternatives has been favourable for promising ventures.
At the same time, the conventional lending institutions should also understand that FinTech companies are not a threat to their existence. Both these sectors can collaborate with each other in areas such as customer acquisition, product innovation, analytics, sales enablement and cyber security.
The access to innovation through digital peer-to-peer lenders allows NBFCs and banks to create competitive advantages for their own business.
Customer-centric innovation triggered by FinTechs is here to stay. The possibility of getting a loan for business without security or collateral is real. Open architecture-based wealth management tools, Big Data and online financial advice will continue to help entrepreneurs.
As a digital-age lender in this domain, Capital Float uses proprietary algorithms to inspect large amounts of data and evaluate a potential business borrower’s creditworthiness. We offer timely business finance without collateral to SMEs, start-ups, and freelancers to help them bear the expenses that are crucial for their stability and growth in the business world. Our process of judging the payment capacity of businesses is automated, fast and flexible, while also being diligent. If you need loans in less than a week and do not have a very long history in your industry, do not let any refusal from traditional NBFCs discourage you. Visit www.capitalfloat.com to find the business loan best suitable to you.
Oct 24, 2018
The Great Indian Finance Festival or GIFF 2017 is an online initiative by Capital Float to offer working capital loans to MSMEs across different sectors in the country. GIFF aspires to reach out to over 10 million SMEs by offering lucrative offers on working capital finance, in a bid to bridge the credit gap that small businesses continue to be challenged by. Over the next three months, starting July 1, 2017, GIFF kicks off a one-of-its-kind loan festival that will provide Indian SMEs with the working capital support they need to diversify and scale up their businesses.
|Working Capital Loans
|Up to Rs. 10,000 PayTM gold for every loan on offer||Three Long Months
Jul 1 – Sep 30, 2017
|Interest as low as
At GIFF 2017, you can get access to quickly disbursed, flexible, short-term loans that are typically used for the purchase of inventory, servicing new orders or optimising cash cycles. You can apply online in minutes, select desired repayment terms and receive funds in your bank account in as little as 3 days.
Products & Features:
During GIFF 2017, we will be providing three of our loan products at interest rates starting 16%:
|Merchant Cash Advance||Term Loan||Online Seller Finance|
|Loan against card swipes and receivables – ideal for merchants with consistent card settlements||Unsecured business loan – ideal for SMEs with positive monthly cash flow||Online Sellers – ideal for those looking to expand their marketplace presence and sales|
|Credit: Rs 1 lakh – Rs 1 crore||Credit: Rs 1 lakh – Rs 50 lakh||Credit: Rs 1 lakh to Rs 1 crore|
|6 months – 1 year||6 months – 3 years||Flexible payment options|
|Know more||Know more||Know more|
In addition to the three-month long festival, watch out for short ‘Flash Sales’ throughout GIFF 2017. A flash sale lasts for three days, and you can earn up to 10,000 in PayTM gold!. Each product will feature a flash sale of its own, so be sure to visit the GIFF website regularly!
The entire process at GIFF 2017 is online. You need to fill up an online application and submit all the relevant documentation. If you meet the eligibility criteria and your paperwork is correct, your application can be approved within a few hours. The best part is that the loan amount will be credited to the bank account within 72 hours of approval.
GIFF 2017 Application Process
The first step is to fill up basic details about yourself and the company such as the registered name of your enterprise, years of operation, type of company (private limited/partnership/proprietorship/unlisted), company turnover and loan amount required in the online application form. Next, upload relevant documents on the website. These documents or paperwork are necessary to demonstrate your creditworthiness and ability to repay.
Capital Float leverages technology such as big data analytics and proprietary algorithms to make quick lending decisions based on the verifiable data you have provided. Over the years, the technology and intelligence we deployed have ensured better decision-making and quick disbursal of loans.
GIFF 2017 and the festive season
A recent Nielsen’s global consumer confidence index report showed that India’s consumer confidence score rose to the highest it’s ever been in the last 10 years. This swing in consumer sentiment even made Nielsen proclaim India as ‘a nation of determined optimists’. So, as we head into a period of positive consumer sentiment and with many major festivals coming up, the timing seems perfect for SMEs to think big.
Even though we Indians have festivals all round the year, consumer spending spikes from July to December. Traditionally, Ganesh Chaturthi, Onam, Durga Puja, Dussehra, Diwali and Christmas have been occasions for large spending by the Indian consumer. In 2016, Indian consumers spent an estimated amount of Rs 12,000 crore ($1.8 billion) online during Diwali alone. The festive season is also when the marketers spend almost 40% of their annual budget in attracting customers and boosting sales by 20% – 25%.
Timing is everything:
Cashing in on an opportunity at the right time is critical for SMEs to prosper. The upcoming festive season and a high consumer confidence score is a lucrative opportunity that smart SMEs will want to leverage for growth and expansion. Over the next few months, we will be providing our impactful working capital finance products at discounted interest rates with our esteemed promise of 3-day disbursal. Tap into this opportunity and propel your enterprise towards a busy season ahead, equipped with all that you need to succeed and #BreakLimits.
Oct 24, 2018