How this startup digitizes sales records for mom-and-pop stores in India

Thirty-eight-year-old S. Gajul runs a small garment shop in Solapur, a tier three city in the western Indian state of Maharashtra. For the last 18 years or so, Gajul has been manually recording day-to-day sales, including those on credit, handwritten in a long and thick ledger. Around 60 to 80 people, he said, who buy clothes from his shop purchase products on credit monthly.

“It was difficult to find out how much a customer owes from the list of several names that I write down in the ledger on a daily basis,” Gajul told KrAsia over a telephone call.

But things changed eight months ago when Gajul began using mobile app OkCredit, which he said has solved the problem of flipping through pages to search for debtors’ names and the amount they owe him. OkCredit allows him and 6.5 million other small and medium-sized businesses to digitize their credit ledgers.

Photo credit: Aliaksandr Mazurkevich / 123RF

The Bengaluru-based company, started by three engineering graduates – Harsh Pokharna, Gaurav Kumar, and Aditya Prasad – in late 2017, works largely with mom-and-pop grocery store owners, pharmacies, and other retailers to help them manage their records.

Small shops across the length and breadth of the country sell products on credit to repeat customers as well as to people who live near their shops. Like Gajul, shop owners typically maintain a physical ledger to maintain records of debtors and new purchases made on credit. Largely, customers clear their dues either monthly or twice a month, depending on their relationship with the shop owner.

“It becomes problematic both for shopkeepers and the customers to keep track of these credit-based purchases. As the record of credit is handwritten, sometimes customers don’t believe they have taken so much credit, and for shop owners, it takes a lot of their time to find a particular name from a list of hundreds of names,” said Pokharna.

Ever since Gajul started using OkCredit’s app, he no longer needs to make an entry in his notebook every time someone buys a garment on credit. Now, using the app that is integrated with WhatsApp, Gajul sends his customers either an SMS or a WhatsApp message notifying them how much money they owe him.

Similarly, when the customer pays him the money, he sends them an SMS detailing the money he has received, thus creating a digital log book of all transactions that can be easily tracked. Customers need not download the app as they are notified of the credit purchases and clearance of credit through messages.

The idea to create such an app for SMEs came to the trio when they themselves were knee-deep in debt with their grocery store in early 2017.

“We used to buy household products on credit from a small grocery store that was right opposite our apartment in Bengaluru. Clearing the bill was cumbersome and time-consuming. Plus, he would tell us an amount so high, we couldn’t believe it, creating a trust issue from both sides with no way to verify who is right,” Pokharna said.

Later, Pokharna and his friends realized it was a widespread issue after speaking to several store owners.

By mid-2017, when Pokharna and his friends realized they might be on to something, they started developing the app to simplify the process of recording small and micro credit in journals. They showed the first iteration of the app to the same shopkeeper near their house, who gave them multiple suggestions on how to make the app easier to use for merchants like him.

“We sat with him in his shop for hours, testing the app with him as well as his customers, and made several iterations to make it simpler. We wanted to keep the app simple without any fancy or complex app flow,” he said.