PagarBook, a leading payroll and employee management start-up aspires to double its active SME user base to 100,000 in this fiscal year. In a conversation with Bfsinxt.com’s Kailash Shirodkar, Rupesh Kumar Mishra co-founder of PagarBook shares the journey so far and how SMEs have been responding to their proposition.
PagarBook was co-founded Arya Adarsha Gautam, Adarsh Kumar, and Rupesh Kumar Mishra. Mishra said, Our intention was to build something that contributes to society and addresses the true and fundamental challenges encountered by people outside of metros. Edited Excerpts:
Q. How has your offering to SMEs evolved from day one?
PagarBook is powered by GyanApp, our previous start-up that debuted in 2018 as India’s first vernacular social media platform for exchanging valuable information.
We founders are all from tier-2 cities and understand the challenges of traditional modes of functioning in the digital age. From October to December 2018, we met with approximately 300 SME owners (and their employees) in cities such as Surat, Ahmedabad, Patna, Jaipur, New Delhi, and Bangalore, including retail shopkeepers, wholesalers, manufacturers of hardware, embroidery, weaving, construction, furniture, and diamond sectors, who used old methods of working that slowed them down and reduced their work efficiency.
PagarBook introduced HRMS solutions that addressed their current issues, such as:
- Keeping bahi-khata and recouping retailer and wholesaler losses
- Managing the income, work, and attendance of employees
After evaluating the foregoing, we observed that a major part of SMEs required a solution for human resource management concerns (staff salary, work and attendance management, and staff hiring issues), as well as the country's over 200 million workers, lacking financial and professional profile.
Our 50 lakh registered SMEs are now well-positioned to get world-class, customized financial experiences through PagarBook, which will address the requirement for a comprehensive spectrum of excellent financial services for SME employees.
Q. Do you charge MSMEs for any service you offer?
At PagarBook, our approach is a freemium model in which MSME businesses may record and follow their employees using free software with basic capabilities such as manual attendance, wage computation, and so on.
We also launched PagarBook Premium, a subscription edition that includes face biometric attendance, selfie and location attendance, automatic salary computation and payroll software, salary account for SME employees, and more.
Q. Have MSMEs come to a point to start paying for services that provide value?
Of course, contrary to popular assumptions, SMEs are always willing to pay for a product or service that adds value to their business and productivity. With the pandemic’s intervention, SMEs have begun to favour a touchless attendance solution over a traditional fingerprint sensor. We have a one-stop solution that automates staff attendance, salary calculation, selfie & location attendance for field staff, and other payroll elements such as overtime, bonus, late fine, leave management, and the holiday calendar, among others. Many of these essential functions are locked behind a paywall.
Q. What trends have you observed amongst your user base in the last few months, considering economic disruptions across sectors?
We have undoubtedly seen a few trends and are striving to provide solutions to meet the demands of MSMEs in the current circumstances.
- MSMEs have capital ready to spend, but there is a need to educate them on the value and necessity of embracing technology. MSMEs are now more open to incorporating improved procedures into their businesses through the use of technology, realizing that it may help them enhance their profitability and bottom line.
- Financial inclusion is another trend that is gaining traction among MSMEs. Over 90% of SME employees still do not have a salary account, demonstrating the necessity for this transformation. If they have a bank account, it is most likely a savings account. Such accounts are subject to a slew of restrictions.
- Failure to participate in Financial Inclusion has resulted in many limits for MSME employees, such as a lack of access to finance, disorganized loans, and so on. However, FinTechs provide a glimmer of hope for MSMEs in the long run.
Q. How are you collaborating with banks and other financial institutions?
We have partnered with a few regional banks and financial institutions to provide MSMEs with digital banking solutions, including short-term loans for SME employees.
Q, What is your current user base and engagement metrics that is tracked? and Future milestones, if any?
PagarBook now has over 500K active SMEs, and our goal for this fiscal year is to double that number. To keep track of our customers engagement KPIs, we look at hard actions such as staff attendance, payments, payroll reports, salary slips, and so on to evaluate retention and product usage depth.
Q. What are the key challenges for MSMEs to grow and how can they be addressed?
Indian SMEs are run by smart businessmen with a proven track record of running profitable businesses. It has a healthy double-digit contribution to India’s GDP. Educating and helping them adopt technology and access to capital are the two things to be done to help them scale greater heights.