Session 94 summary
A Journey of Biking Across Countries to Creating Digital Solutions for Marginalized Entrepreneurs:
MeraBills very well described is a tool which allows nano micro businesses i.e. very small businesses that in the informal India is seen all around us. The idea is to financially and digitally empower them so that they are brought into mainstream. It doesn’t mean necessarily in formalizing them but definitely giving them the tools to conduct their business in a more efficient manner.
Where did it all start?
It started in the 17,000km ride. Piya rode across several countries and over lots of kilometers and stopped at lots of small shops, highways, hamlets, bustling cities, and towns and saw a lot of women entrepreneurs and small business owners across these countries. And some of the problems which came to her mind everywhere was that they had very little understanding of business or business matrix. As she rode, she realised that there are 65 million small businesses in India alone, they provide employment to over 100 million people, but running a small business is hard. So, when she came back and looked at what is the situation and how is this dichotomy which she didn’t understand it. Apparently, a lot of work had already been done around it, the RBI calls off things like obsolete technology, lack of managerial competence, inadequate finance, lack of infrastructure, inadequate market linkages. These are some of the reasons why small businesses fail. While on the journey she spoke to some businesses where she questioned why some shops closed to which they would casually reply and not explore why it shut down. What she realised as she spoke to more entrepreneurs is that the woman understands those things- who owes her money, how much money she owes to someone, if she has ₹ 6,000 in her cash box, is it the correct amount, is there a leakage, did she make a profit, etc. There are answers which they also seek, but it is not easy to find those answers as one runs a business and they have literally no time and very little understanding of book keeping. As Piya dug deeper as to who is this small business owner, what is the nature of the business; she discovered that “she” (female business owner) basically has a limited radius, “she” is very relationship oriented, most of her customers are known, rarely there is a customer who walks past (in village/rural area), udhar (credit) is a constant- there is a lot of credit given and taken among vendors and customers. “She” is typically a one person business where maybe she is the only one making the goods, selling the goods, buying the raw material, managing the raw material, managing the customers, etc. So, clearly her days are fairly full. As they worked through covid, it was becoming apparent that there is an aspiration to sell online- covid pushed people to think that it might be something that might come back. There is also this huge social media hype about online stores – that market linkages and trying to come online was aspirational goal for many. And the ongoing problem of access to loans remained. This is what her world looks like- her internal world looks like- what is the external ecosystem which she works in. there are government agencies and non-profits that are working on skill development- they work on financial literacy, they want to do entrepreneurship development programs to bring entrepreneurship to rural areas to very urban areas, simply because as the PM has pointed out several times the increasing number of population in India, there is no way jobs are being provided to everybody, entrepreneurship is going to become a real requirement. So, there is a lot work being done by government agencies and non-profits in this space. However, they do have challenges also – How do you quantify how much benefit has a particular program done and also how do you change behaviour and how do you measure this changed behaviour? All these things are something which Piya’s team would like to see after spending so much in the projects. Then there are lenders with many of these small businesses, usually women, especially in rural areas come under the Joint Liability Group (JLG) or SHG models, where lending is done to a group of people and then distributed among them and they are jointly responsible of returning it. This model, while it serves very well, there is a dependency on the agents and there is a difficulty in assessing individual credit worthiness. So, they keep giving the loan to the group but what if one woman is aspirational and wants to take a direct loan, is there any visibility into their business and it appears that there isn’t and then how can that be made possible. There are services like ‘Khata book’, ‘OK credit’, ‘Vyapar’, ‘Mera Bill Book’, etc. but they are of a high order for people who are willing to pay, they are looking at monetizing the transactions that happen in their app and so on. And they have these complicated things which the rural business owners are not really going to be looking at. The challenge is that it still doesn’t solve the problem of rural/small business owners, as to understand how much money she is making, what are her expenses, what is her profitability looking like.
Insights: As they spoke to more users and their partners and potential partners the motto was “you hear and you forget… you see you remember… you do you understand!” Which is why the entire focus on a product/digital product that would help these small business owners begin to understand their business matrix. So, the team is working with NGOs, Government, producers and end users and each of them had their understanding of how will they try to solve their issues.
The problem statement that came out of all these conversations in the initial trial was that informal businesses have trouble getting online, they would like to but they don’t know how, the resources for formalised book keeping is expensive, difficult to come by and complex-how do we increase the understanding of these things, and the limited access to formal credit channels- loans are credits are interesting as they have risks. Thus, MeraBills approach is to first increase business outcomes for the user. Business outcomes refers to increasing revenue and also reducing expenses. Secondly, they are focused in reducing the barrier to adoption of technology based business tools. Finally, they wanted to work with organization such as Driti- and work with partners who are already in the place, already working in the financial inclusion as a larger idea- talk about financial literacy and working alongside with them and provide a tool that will bring financial literacy to the rural entrepreneurs. For this MeraBills democratizes business efficiency by empowering micro-entrepreneurs to run their businesses better by helping them understand –income & expenditure, payables and receivables and what they are taking home/ROI, and to identify and manage the leakages, reduce their cost and that would improve cash flow, that leads to taking better decisions which obviously then lead to better revenues which helps in securing financing.
The technology they built: they built a very simple, holistic phone app which is an ERP for the micro, tiny, informal businesses, it is robust and secure and most importantly it is free, they are a social enterprise focused on bringing technology to rural India. It is a customer centric flexible UX Design. It is built on a robust platform. They have also tested the app on very low-end phones. It is available in multiple Indian languages- 10 languages. In the last 18 months they have worked with 20+ partnerships, they have upto 24,000 downloads. They realised that there has to be a custom solution for every type of small businesses with their unique problems. They are not just a book keeping app but they also hope to do all kinds of business management activities in it- so from getting her more business to helping her manage her own business to manage the book keeping to managing her inventory to creating PNLs for her so that she is able to go to a lender. All kinds of activities that are associated with businesses are going to be brought into the app. During this project they discovered that it is a multi-segmented target audience but the learning capacity, the literacy level, the access to internet, the distance from markets, etc. is very segmented in their targeted audience. What they are starting with is the notion of profitability. There is an instinctive understanding of business but measurement is an important gap in information and ability. Easy for users with prior experience of record keeping to use MeraBills effectively. They also realized that there is a reliance on younger family members for digital literacy. The team train the trainers-but they have to bring this to scale -trainee support scale. Customer support-an important component to the solution-Another thing is that their own customers they want to support and engage with them which allows them to connect with their user.
About the Speaker
Piya Bahadur
Piya Bahadur is the Founder and CEO of MeraBills, an Android application that helps micro-entrepreneurs succeed by providing them the technology needed to manage their businesses better. She leads strategy and marketing at MeraBills and works closely with micro-credit organizations and NGOs in the digital inclusion/financial literacy space. Previously, Piya was the Regional Director of the United States-India Education Foundation (USIEF), where she established USIEF’s Hyderabad offices and oversaw operations across Telangana, Andhra Pradesh and Orissa. She also worked at the Wadhwani Centre for Entrepreneurship Development at the Indian School of Business (Hyderabad), which gives her a multi-faceted understanding of the micro-business landscape and a keen awareness of the kinds of support needed by micro-entrepreneurs. In 2018, Piya completed a 17,000-kilometre, all-women motorcycle expedition riding across the Southeast Asian peninsula and back to Hyderabad. Her book about the ride – ‘Road to Mekong’ – was published by Pan Macmillan last year. Piya has a master’s degree in Urban Planning from the State University of New York at Buffalo, and a bachelor’s degree from the School of Planning and Architecture, New Delhi. She is a recipient of the J.N. Tata Endowment for Higher Education.
