Credit and Finance for MSMEs: BetterPlace, the frontline workforce management SaaS platform, on Tuesday, announced the launch of its financial services vertical BetterPlace Money to provide access to formal credit to the frontline workforce in the Asia-Pacific and the Gulf region.
In place of offering loans directly, BetterPlace has adopted a partnership-based approach wherein it will partner with enterprises to provide short-term loan offerings to their employees through its SaaS platform.
Saurabh Tandon, Co-founder and Group COO of BetterPlace told Financial Express Digital that the platform will provide short-term, non-collateral loans to blue-collar workers. Blue-collar workers are those who perform informal jobs such as delivery personnel, machine operators, food processors, powerplant operators, heavy motor vehicle drivers, etc. The loans will be offered at an interest rate of 18-22 per cent per annum for a tenure of three to six months.
“The minimum or the maximum value of the loan amount will depend on the worker’s income. The average blue-collar frontline worker typically earns about Rs 15,000 to Rs 25,000 in India. We will start by offering loans which amount to approximately 50 per cent of their monthly income allowing them to meet their essential needs and repay the debt comfortably,” Tandon told Financial Express.
The frontline workers are currently not served by formal institutions such as banks as they don’t have a credit score or credit history. The company states that only one out of 10 frontline workers have access to formal credit.
“Credit to frontline workers is a $70 billion opportunity in India, APAC, and GCC and yet there are no significant players tapping into this market segment. Having successfully formalized a large chunk of the informal frontline workforce with the power of technology, using our data and distribution strengths to provide access to credit to this segment was a natural progression,” said Pravin Agarawala, Group CEO & Co-founder at BetterPlace.
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“Access to credit in India is facing a dual problem. It is hard to underwrite a formal loan to the underserved segment while at the same time, it is only accessible to a small portion of the population. To solve this dual problem we are partnering with quality employers to fulfil the mission of ensuring a win-win arrangement for the workers and the employer”, said Saurav Gandhi, founder of Bueno Finance, recently acquired by BetterPlace.
BetterPlace works in Blue-collared workforce management. The company has over 1100 clients and manages 30 million workers via its SaaS platform.
