Over the past couple of years, India has become a pioneer for creating a digitally and financially inclusive society, and we’ve seized this opportunity to bring accessible financial tools to underserved families and businesses. Since 2005, Accion has partnered with more than 20 Indian companies, and we were recognized as the second most active fintech investor in India in 2018. Today, we’re proud to announce our newest partner in the region: ftcash.
ftcash empowers mom and pop stores by providing digital loans and payment systems. They offer small businesses a comprehensive payment platform, enabling the merchants to accept debit card, credit card, and e-wallet payments. In addition to payment solutions, ftcash also offers a lending product to help small businesses access working capital and formal credit. The innovative company has attracted international attention. It was part of Mastercard’s Start Path Global and PayPal’s incubator program, both of which have supported ftcash in refining its business model to propel its vision forward. Today, ftcash supports more than 30,000 small businesses.
Closing the digital financial services gap
Cash is still king in India, but the emergence of players like ftcash is enabling mom and pop stores to take advantage of the digital financial system. While the Indian government has expanded penetration of financial services through initiatives like Pradhan Mantri Jan Dhan Yojana, the next step is to build up the ecosystem through merchants and enable them to accept digital payments. Cash transactions are prevalent among small businesses, but cash is inherently riskier since it can be easily lost or stolen and cash management can ultimately be more expensive because of those risks, fake notes, and time and cost spent moving cash in and out of the bank. By making quality, affordable digital services available to merchants, they can spend more time focused on running their businesses and less time handling cash. A digital footprint will also enable these small merchants to access credit from formal financial institutions in the future — opening up new opportunities for their businesses, themselves, and their families.
Partnerships for financial inclusion
ftcash offers a distribution channel to financial service providers that are interested in lending to small and medium enterprises using alternative data and a digital payment system. ftcash partners with these institutions to extend working capital loans to its customers. Its partners include India Infoline (IIFL), a financial services holding company, Neogrowth, a portfolio company in the Accion Frontier Inclusion Fund, managed by Quona Capital, and others. Several institutions are interested in learning from ftcash’s model, which leverages data from digital payments to provide access to credit and expand financial inclusion.
As both a merchant network and a financial technology company, ftcash has the potential to become a demonstration model in other regions where financial service providers are interested in partnerships to serve small businesses. By leveraging technology and partnerships, ftcash can both operate more efficiently and deliver products better tailored to their customers.
Through support from Accion’s Global Investments and Global Advisory Solutions teams, ftcash will be able to strengthen its business and reach more of India’s 60 million financially underserved medium, small, and micro businesses. We know that alternative data and strategic partnerships are effective for expanding financial inclusion, and we look forward to working with ftcash to make sure these tools help small business owners across the country benefit from India’s digital economy.