| | DECEMBER 202119THE OPTIMAL USE OF TECHNOLOGY ENABLED PLATFORMS WILL HELP IN FINANCIAL PRUDENCE, DECISION-MAKING AND RISK MITIGATIONimproving efficiency and costs. The optimal use of technology enabled platforms will help in financial prudence, decision-making and risk mitigation. Tech adoption also allows for easier assimilation of data that can be then crunched into meaningful insights and better customer segmentation. This would provide a more granular and in-depth understanding of a cus-tomer's risk profile and needs more optimallyDigital transformation is underway. For a lender, it speeds up decision making and improves quality of credit decisions. For MSMEs, they can access quicker credit when needed. Banks will now have the ability to make better credit decisions.Edelweiss has been one of the early adopters of technology in the lending space. We have been at the forefront of testing and adopting several digital initia-tives, spanning customer acquisition, credit decision architecture, on-boarding and customer life cycle man-agement, helping us stay ahead of the curve, while an-ticipating the future needs of our MSME clients.4.Impact of COVID-19 on MSME's and what should MSME's do to overcome this situation? COVID-19 has had a severe impact on India's economy, with MSMEs being the worst hit. Challenges related to receivables and supply chain, continue to impact many small enterprises. While business sustainability is un-der stress, the pandemic also offers ample opportunity for this segment to optimally leverage opportunities to script future success. In my view, this is the four-point mantra for MSMEs to follow is:· Social distancing will continue, but customer en-gagement and reach must deepen, as we move from a product-centric to customer-centric economy · Flexibility, agility and increased adaptability to evolving customer needs, will be key to future sustain-ability · Digitization, Alternate Data and increased focus of Financial Fitness, will be crucial to profitability when considering future business models · Frugality and review of debt obligations and cash flows, can help build liquidity for business5. What strategy should a MSME industry adopt in order to position its growth in India?COVID is an opportunity for companies who are flex-ible and are willing to adopt change. Incorporating technology to be relevant in a socially distanced world, will be essential, to ensure sustainable business mod-els. Digital transformation can be integral to sustain-ability, in the current environment.MSMEs need to demonstrate financial soundness and stability, to ensure timely access to credit, if they are seeking to boost and accelerate growth· A healthy bank statement helps in ascertaining creditworthiness and repayment capacity. It is a key pa-rameter to gauge and offer lending· Moving cash sales into bank accounts helps accu-rately reflect turnover of the entity· Being a registered GSTN user makes qualitative data available to prospective lenders· Registering online under the recently announced Udyam registration scheme by the regulator on Au-gust 21st, 2020 will allow for micro, small and medium enterprises to be eligible for benefits under govern-ment schemes such as collateral free loans, interest subsidies on loans taken, other government subsidies, and others. 6. On a concluding note, based on your robust industry experience and knowledge, what message do you want to put across to the readers/stakeholders/investors/business partners/CXO's/start-ups/budding entrepreneurs?My advice to Businesses, Entrepreneurs ­· Stay closely connected with your customers· Digitization is key. Focus more on technology driv-en business models. Digitising processes will ensure scale and efficiency in your operations· Be open towards change and look for opportuni-ties during this time of adversity. · Conserve cash. Spend money only if it means serv-ing existing customers or towards attracting new cli-ents · Look after the financial fitness of your company & monitor closely to identify areas of improvement to boost performance and build high productivity teams· Consciously look to deleverage and reduce de-pendencies. Reduce your debt obligations in line with the revised cash flows to avoid defaults that impacts your credit rating.
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