Empowering micro-merchants: Interview with Sanjeev Chandak, Cofounder & CEO, ftcash

By Puja Sharma

ftcash uses a proprietary algorithm to analyse creditworthiness and offer underserved MSMEs, including retailers, pharmacies, automobile shops, and mom-and-pop stores, and with institutional finance. Further, the company creates an open architecture-based platform for merchants to initiate digital payments in less than five minutes by aggregating all payment methods including credit and debit cards, net banking, mobile wallets, UPI, etc.

Sanjeev Chandak, who has over two decades of diversified experience across financial roles, is primarily responsible for overall strategy, technology, and investor relations at ftcash. He plans to leverage his expertise in financial services and analytics to create value for ftcash in the key FinTech areas of payments, lending, marketing, finance, and credit risk management.

Before co-founding ftcash, Chandak was Deputy CFO and Head of Analytics at Deutsche Bank India for seven years. He graduated as an electrical engineer from the Indian Institute of Technology, Kharagpur, and completed his Masters in Electrical Engineering from the University of Washington.

IBS Intelligence interacted with Chandak to understand the importance of Creditworthiness, and how ftcash is empowering the underserved micro-merchants through financial inclusion.

What is the need for responsible lending in the microfinance sector?

Microfinance is playing a crucial role in fostering financial inclusion as it makes credit available at the last mile.

In the recent past, micro-lending has increasingly attracted traditional players who have so far known to have refrained from unsecured loans owing to lack of credit score. Digital integrations have opened access to data which was predominantly a fintech strength however trust issues in FinTechs for lending/credit are increasing at retail and MSME levels as more cases of fraud and lack of due diligence have surfaced in the recent few months. Hence, responsible lending is a requirement for the microfinance industry.

How can NBFCs strengthen the banking and online payment sector in rural India?

The growth of FinTechs and NBFCs have significantly reshaped the financial services and financial inclusion landscape of India. They have democratized digital payments and are enabling access to credit for various small business owners.

Due to ease of access and convenience, NBFCs have become a preferred option for users to meet credit requirements. NBFCs are now working towards strengthening their presence in rural areas as consumers don’t have access to commercial banks and it often becomes difficult to get a loan from banks. As these are typically smaller ticket-size loans, NBFCs with a digital stack can reduce the cost of servicing a loan and hence profitably lend to borrowers in rural India. Also, NBFCs can leverage alternate data for credit assessment as these customers may not have a rich credit history.

 How has the journey of ftcash been so far, and what are its key offerings?

ftcash started in 2015 by enabling digital payment acceptance in less than 5 mins anywhere in the country. We were able to make the process of digital payment acceptance “merchant centric” and made it easy. We are now a responsible lender to MSMEs in the country by combining loans with digital payments. Our AUM has grown by 22X since 2019 despite Covid-19 and we are continuing it by remaining true to our customers. Our products enable MSMEs to increase their business income while building their credit profile. The FinTech and regulatory environment have changed over time but we have been successful by staying focused on the customer segment and having built a platform that can easily adapt to the environment.

 How is ftcash different from its peers?

ftcash ensures that the loans it provides to MSMEs are a win-win solution for both the borrower and the lender. The borrower should have the capacity to repay the loan while at the same time increasing their disposable income after servicing the loan. It ensures that there is risk-based pricing so that it is fair to different types of borrowers with varying risk profiles.

What are your future growth plans; are you also seeking a fundraiser?

We have had phenomenal growth since inception and grew more than 3X in 2021. Our 90+ delinquency rate is less than 4% which is much lower than the market standard in this target segment. This has been made possible because of our proprietary risk management platform called “Daily Health” which manages the credit health of the borrower post-disbursal of the loan.

We have over 60,000 merchants in our network currently and have disbursed over INR 600 crore worth of loans till now. We are planning to grow 3X in 2023 and continue to serve our customers as we ramp up more locations in Tier 1 and Tier 2 cities. The total funding raised as of that date is $10.2 million. As we grow rapidly we will raise funding next year to further capitalize on the NBFC.