As part of this strategy, PagarBook is set to launch savings accounts for SME employees and has already launched PagarBook Cash, a credit product based on the monthly salaries of SME employees on its platform. The Bengaluru-based startup is aiming to open one million savings accounts over the next few quarters. At present, PagarBook Cash distributes loans with an average note amount of around Rs 5,000.
Over the next six months, the company expects to disburse nearly 100,000 loans on a monthly basis. In December 2020, PagarBook raised $15m in funding led by Sequoia Capital India with participation from India Quotient.
Earlier in 2020, Sequoia-backed Khatabook also launched an employee management solution, PagarKhata, to help small merchants digitize attendance, payroll and wages, increasing competition in the segment.
Rupesh Kumar Mishra, co-founder of PagarBook, said more than 100 million SME employees contribute a significant portion of India’s economy. Their lack of financial and professional profiling is essential so that they are not part of the traditional financial ecosystem.
Currently, the PagarBook platform processes salaries for more than two million employees, it said in a statement.
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“The latest RBI ‘Financial Inclusion Index’ of 53.9 testifies to the fact that the employee base of Indian SMEs suffers from limited access to financial services. Our experience with 50 lakh SMEs means we are now well positioned to become a comprehensive, organized and world-class digital banking experience that will solve the need for a full range of quality financial services for SME employees,” said Abhiroop Chatterjee, SVP – Financial Services, PagarBook.
Last month, PagarBook launched “BetonBook” in Bangladesh and is looking to scale the solution in select Southeast Asian markets over the next two quarters. In India, PagarBook has more than 50 lakh SMEs registered on the platform, who are using the app to solve their personnel management issues in 13 different languages, the company said.