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Payment gateways are easy enough to install on your website. Most often, web hosts will provide gateways as additional services. But what do you do when companies have never encountered the digital route? Bangalore-based startup, <keyword id="1898251" type="PERSON" weightage="20" keywordseo="Instamojo">Instamojo</keyword>, is trying to solve that problem. It targets small and medium enterprises (<keyword id="44779" type="COMPANY" weightage="20" keywordseo="SMEs">SMEs</keyword>) by selling what is primarily a payments platform. But unlike regular payments gateways or platforms, Instamojo doesn't have to explain the specifics of its service to them. All it tells these SMEs is that they'll get a link to share with prospective buyers, and get payments directly in their bank accounts. The platform will take a 2%+₹3 cut from each payment. At its core, there's nothing innovative about Instamojo as far as its technology is concerned. But it's presentation is tailored to the target audience, making it simple enough for the non-tech savvy audience to adopt. Having started operations in 2013, Instamojo now has over 4,00,000 SMEs on board. Interestingly, while its sellers come from Tier I and II cities, the buyers are mostly from Tier I metros in the country. How it works Technically, Instamojo can be used by anyone. You sign up on the company's website, fill in pan card, GST and other details are you're good to go. A dashboard is presented to you, that tracks the money you receive. You can push this out to your bank account at any time. The dashboard also has a "Create payment link" button. This is where you create the link, which can be shared through various channels. If you're doing this from a desktop PC, you can use <keyword id="6354576" type="ORGANIZATION" weightage="20" keywordseo="facebook">Facebook</keyword>, email and Twitter. You can share it via WhatsApp and SMS if you're using the Instamojo app on your phone. Doing business After starting with payments, Instamojo also offers a shop option for sellers now. This, again, is basic. It allows sellers to put photos of products they sell, offer discounts, choose sizes (when relevant) etc. It's not a full-fledged e-commerce solution like <keyword id="1715801" type="PERSON" weightage="20" keywordseo="Shopify">Shopify</keyword> but allows just enough for sellers to go digital. This though means that these same sellers may move to more established platforms if Instamojo helps them succeed. And Swain says he recognises that. Yet, he says moving money from <keyword id="58103" type="LOCATION" weightage="20" keywordseo="Itanagar">Itanagar</keyword> to <keyword id="6356654" type="LOCATION" weightage="20" keywordseo="bombay">Bombay</keyword> is no easy task. While he agrees that he's partly in competition with every payments platform in the country, including other payments gateways, he feels his primary competition is with cheques and bank transfers. SMEs in Tier II and III cities do not depend on digital modes very often, and they do not want to pay for services without knowing how they'll help. Instamojo asks for payment only when a sale is made through its platform. Sign-ups are free, as is browsing around and sharing links. You pay money when you make money. After introducing the "shop" feature earlier, Swain is moving to lending next. With this, Instamojo will extend loans to businesses, albeit in smallish amounts. Logistics is another service that's soon to start. Essentially, Instamojo now wants to become a full-service e-commerce solution for SMEs. And all this to achieve its target of getting a million SMEs on the platform by end of 2019. Tough ask. Future Yet, Swain is bullish. Like Google, Microsoft, Amazon and pretty much every technology company, he sees the SME space as an untapped market. While bigger companies could just as easily start the service Instamojo offers, Swain says he’s not worried. He says it’s about getting to a place where “you’re the one to beat if others decide to enter this space”. For him, SMEs represent “middle India”, something between the unregistered businesses and big companies. He says the giants aren’t doing payments platforms or e-commerce solutions with these companies in mind. As a result, he sees the space wide open and says competition will only lead to faster growth. In fact, while he agrees that WhatsApp’s recent entry into payments, and the WhatsApp business platform, will probably take away some of his users, he also expects it to raise awareness. As a result, a full-service platform like Instamojo might start making more sense to SMEs. Lastly, Instamojo also sees data as a possible opportunity. While it is not a consumer-facing company, it still has buyer data, which Swain says can be leveraged in future for better services. Similarly, the current customer base of SMEs can be leveraged in future to create a sort of LinkedIn for this industry.

This Indian startup wants to give small and medium sized businesses all the e-commerce tools they need

<keyword id="1452668" type="COMPANY" weightage="100" keywordseo="500-Startups">500 Startups</keyword>, the venture capital firm based in Silicon Valley, which had planned to open an India fund, is most likely double minded about the same. 
 
Aerin Lim, who serves as the director of investor relations at 500 Startups, had stated in March last year that the investment firm and startup accelerator was about to raise $10-20 million to create a separate fund for supporting startups based in India. This has raised many hopes at the end of startups and budding entrepreneurs based in India, who hoped to get funding for their businesses. 
 
However, that idea was delayed, and now, chances are that the decision would be reconsidered altogether; at least this is what some unnamed officials told ET. 
 
"Their overall strategy is changing given that they have struggled to raise money for their latest global fund," one of them said. "So the conversations around an India fund has slowed down considerably-practically negligible over the past 6-12 months." 
 
There was no confirmation (or denial) about the same from the end of the 500 Startups. 
 
Despite the fact that India is an attractive market for global firms for investment purposes, this is not the first time that 500 Startups has backed out from its India plans. In 2012 too, founding partner Dave McClure had tried to raise a $5-million fund for India, but as we know, it didn’t work out. 
 As of now, 500 Startups has invested in a number of Indian ventures, like <keyword id="3202695" type="COMPANY" weightage="100" keywordseo="TradeBriefs">TradeBriefs</keyword>, <keyword id="1898251" type="COMPANY" weightage="100" keywordseo="Instamojo">Instamojo</keyword>, <keyword id="1973410" type="UNKNOWN" weightage="100" keywordseo="Pricebaba">PriceBaba</keyword>, <keyword id="3041435" type="UNKNOWN" weightage="100" keywordseo="Sheroes-in">Sheroes.in</keyword>, <keyword id="3047828" type="UNKNOWN" weightage="100" keywordseo="OnlineTyari">OnlineTyari</keyword>, <keyword id="3058629" type="COMPANY" weightage="100" keywordseo="Gazemetrix">gazeMetrix</keyword> and <keyword id="416397" type="UNKNOWN" weightage="100" keywordseo="ZipDial">ZipDial</keyword>, and would continue doing that via its global fund. 
 
<a href="https://mymeedia.com/imageurl?width=800&amp;url=http%253A%252F%252Ftctechcrunch2011.files.wordpress.com%252F2014%252F06%252Fimg_2403.jpg">Image source</a>

500 Startups might cancel its plans of making an India-specific fund

As the <keyword id="613228" type="UNKNOWN" weightage="100" keywordseo="US-shutdown">US shutdown</keyword> drags on, business groups are demanding the immediate reopening of the government while economic indicators show that the standoff has already hurt consumer spending and consumer confidence. <keyword id="770060" type="UNKNOWN" weightage="100" keywordseo="Indian-start-ups">Indian start-ups</keyword> with cross-border operations are not hit yet, but a setback could not be ruled out if the deadlock continues. We bring you a series of quick chats with entrepreneurs and start-up experts who are closely tracking the situation in real time. Today's chat is with <keyword id="276933" type="PERSON" weightage="100" keywordseo="Sampad-Swain">Sampad Swain</keyword> of <keyword id="1898251" type="COMPANY" weightage="100" keywordseo="Instamojo">Instamojo</keyword>. 
 Operating from Mountain View (California) and Mumbai, Instamojo, Inc., is not even 2 years old but its online peer-to-peer platform for selling digital goods has gained significant global traction. A part of the 500 Startups’ Fall 2012 batch, the start-up claims to have many key customers across the US and we are keen to figure out if the ongoing <keyword id="469382" type="UNKNOWN" weightage="100" keywordseo="government-shutdown">government shutdown</keyword> would hit the Indian start-up ecosystem operating out there. In a quick chat, co-founder and CEO Sampad Swain admits that macroeconomic issues could be damaging, but start-ups not directly dealing with the government, should not be worried. Here are the excerpts from our chat. 
 
Will the current shutdown affect cross-border start-ups? 
 I don’t think Indian start-ups with cross-border operations are facing any threat yet. At this point of time, I am trying to develop the domestic market, but we see continued interest from the US and European markets. Things have not changed much in spite of the stand-off. Also, I think the shutdown will not affect Instamojo, an online P2P platform for selling and buying digital goods. 
 
If consumer confidence is hurt, shouldn’t it impact C2C businesses like yours? 
Not necessarily. I think long-term crises like the subprime crisis or the ongoing rupee-dollar fluctuation may impact our business in the long term. But the US shutdown, I feel, is a short-term thing and it can’t go on for an indefinite period. Entrepreneurs and businesses are always ready for such short-time scenarios. 
 
Do you think the shutdown will impact seed-stage or early-stage funding? 
I doubt if there will be any such impact. But then, any macroeconomic issue prolonged over a period of time leaves its mark. Just like the subprime crisis did before. 
 
Of late, VCs have been cautious about India investments. Will they now focus more on emerging markets? 
That is highly unlikely as VCs take their call keeping in mind a larger time frame. Short-term disruptions will not make them change their policy. 
 
Will there be negative sentiment among start-ups looking to expand their businesses in the US? 
I think any start-up not focusing on selling directly to the government should not be worried. Most likely, it will be business as usual. 
 
Watch this space tomorrow for the final interaction with one of the biggest Indian-global start-ups.

US Shutdown: Indian Start-ups Can Cope In Short Term,
Says Instamojo’s Sampad Swain

New Delhi, Mar 6 () Paytm Payments Bank took a dig on its rival PhonePe in the wake of obstructions it faced due to using cash-strapped Yes Bank platform for transactions. PhonePe founder and CEO Sameer Nigam said there has been an outage of service on its payment application due to restrictions on its banking partner Yes Bank and the service will be live soon. "Inviting you to @PaytmBank #UPI platform. It already has huge adoption and can seamlessly scale manifold to handle your business. Let's get you back up, fast!," Paytm Payments Bank tweeted. PhonePe shot back to say that Paytm Payments Bank platform is not seamlessly scalable otherwise the company would have themselves approached it. "Dear @PaytmBank Inviting you to consider that if your #UPI platform was so 'seamlessly scalable', we'd have called you ourselves. No point getting back up faster, if we have to desert our long term partners when they're down. Form is temporary, class is permanent," PhonePe's official twitter handle said. PhonePe, one of the country's largest digital payment platforms, is dependent upon Yes Bank to process its transactions. "We sincerely regret the long outage. Our partner bank (Yes Bank) was placed under moratorium by RBI. Entire team's been working all night to get services back up asap (as soon as possible)," Nigam tweeted on Friday morning. He added that the app hopes to be live in "a few hours". Yes Bank placed under a moratorium on Thursday evening, with the RBI capping deposit withdrawals at Rs 50,000 per account for a month and superseding its board. The bank will not be able to grant or renew any loan or advance, make any investment, incur any liability or agree to disburse any payment. For the next month, Yes Bank will be led by the RBI-appointed administrator Prashant Kumar, a former chief financial officer of SBI. According to the National Payments Corporation of India, several apps such as Flipkart, MakeMyTrip, Myntra, Jabong, Cleartrip, Airtel, Swiggy, Redbus, Hungerbox, MudraPay, Udaan, Microsoft Kaizala and PVR use Yes Bank's UPI platform. Digital payment gateway firm Instamojo said it has temporarily withheld payouts to merchants having Yes Bank accounts. "We will be temporarily withholding payouts to merchants having Yes bank accounts until further clarity on the situation. This is to ensure that no merchant's funds get blocked. As an alternate, we have provided our merchants the option to change their registered bank from Yes bank to another account," Instamojo Chief Executive Officer and co-founder Sampad Swain said. A Bharti Airtel official said there is no impact on the company's transaction as it uses many other payment gateways. E-commerce firm Myntra said, "Transactions on Myntra have not been impacted, except for payments through PhonePe. Our customers can continue to transact on Myntra using other UPI payment service provider apps in addition to credit and debit cards and net banking until services of PhonePe are restored." Start-up firm Kredx said that following the government's decision to impose a moratorium on Yes Bank on Thursday, the company has stopped all inward and outward transactions with the bank's with immediate effect. PRS KPM HRS

Paytm Payments Bank takes a dig on PhonePe over Yes Bank restrictions

(Eds: Adding details) Mumbai, Mar 6 () As Yes Bank went into moratorium, many a digital payment platforms bore the brunt on Friday as transactions were disrupted, with PhonePe facing "long outage". PhonePe, which depends exclusively on Yes Bank as its payment services provider (PSP), was down since the order was imposed and also had to suffer the more-than-friendly barbs of rival Paytm Payments Bank on Twitter. Yes Bank was put under moratorium late Thursday evening, with several caps, including allowing depositors to withdraw only Rs 50,000 per account and a slew of others including not taking fresh liabilities. This resulted in the bank being unable to render the services as a PSP, experts said. Even late in the evening, PhonePe was yet to start the Unified Payments Interface services, for which it depends on Yes Bank. "We sincerely regret the long outage. Our partner bank (Yes Bank) was placed under moratorium by RBI," its chief executive Sameer Nigam tweeted in the morning. The troubles resulted in Paytm Payments Bank inviting PhonePe to its UPI platform through an open message on Twitter with a prickly end note - "Let's get you back up, fast". This was met with a quick retort from PhonePe. "No point getting back up faster, if we have to desert our long-term partners when they're down. Form is temporary, class is permanent," it said. Some users on the micro-blogging site said that half of India's payments systems are down because other apps beyond PhonePe were also affected. Yes Bank's annual report for FY19 said the bank handled 35 per cent of merchant transactions on UPI and 31 per cent of the overall UPI volumes. NPCI's website gave out a list of 15 third-party apps including PhonePe which depend on Yes Bank as a PSP. The names also include Airtel and Angel Broking. There were also reports of the bank's own customers unable to access their accounts online and being forced to visit the branches. Payment gateway Razorpay's chief executive Harshil Mathur said its core business remains unaffected, but there were minor disruptions in the auxiliary services, forcing the company to work with other banks for business continuity. Its peer Instamojo's chief executive Sampad Swain said it is temporarily withholding payoffs to merchants having Yes Bank accounts to ensure no merchant funds get blocked. AA MKJ

PhonePe, may other payment apps hit in wake of Yes Bank crisis

<ul><li>Business Insider brings you a <keyword id="1614221" type="PERSON" weightage="20" keywordseo="reading-list">reading list</keyword> by the famous leaders and authors, amid the global pandemic. </li><li>This week, we bring you the recommended books by leaders like Warren Buffet, Bill Gates, Jack Dorsey and more. </li><li>Here are all the stories you can explore from their chosen list.</li></ul>The Coronavirus pandemic is showing no signs of dying down and social distancing and self isolation are here to stay. This is also causing anxiety among business leaders, employees and even students who are stuck at home. To counter that, Business Insider brings you a reading list by the famous leaders and authors, amid the global pandemic. Business Insider collates interesting <keyword id="4100211" type="PERSON" weightage="20" keywordseo="Books-to-read">books to read</keyword>, giving an outlook on career and professional growth, setbacks and opportunities. This week, we bring you the recommended books by leaders like Warren Buffet, Bill Gates, Jack Dorsey and more. According to them, these books have the potential to make a difference in the real world. Here are all the stories you can explore from their chosen list. The Choice: Embrace the possible by Dr Edith Eva Eger Recommended by Microsoft co-founder <a href="https://www.weforum.org/agenda/2020/05/bill-gates-2020-summer-reading-list/">Bill Gates</a>, The Choice is a book that instills hope in difficult times. According to Gates, the book is a guide to overcome a trauma. At the age of 16, Eger was sent to Auschwitz — where she was forced to dance, hours after her parents were killed — to survive. After going through all the chaos and decades of struggle and flashbacks, she returned to her place and became a therapist. She healed, and helped others heal in the process — and finally forgives herself. The book narrates how our own minds can confine us and the way to freedom. Humankind: A hopeful history by Rutger Bregman This book is one of the latest recommendations by the <a href="https://www.inc.com/jeff-haden/15-great-leadership-books-on-adam-grants-summer-reading-list.html">American psychologist and author Adam Grant. </a> Written by Rutger Bregman, Humankind is a book that offers positivity and portrays a more uplifting and rewarding human nature — discarding a general perception that humans are selfish. Humankind is a story that showcases a future where there are more givers than takers. The Ride of a Lifetime: Lessons Learned from 15 Years as CEO of the Walt Disney Company by Robert Iger Recommended by Bill Gates, The Ride of a Lifetime by Robert Iger narrates <a href="https://www.gatesnotes.com/Books/The-Ride-of-a-Lifetime">what it takes to be a CEO of a large organisation.</a> The story talks about the struggles and success of the Walt Disney Company during its most testing times. Rober Iger became the CEO of the Walt Disney Company in 2005 when the technology was fast changing and the businesses needed to adapt to it. The book talks about four leadership principles — optimism, courage, decisiveness and fairness — to sail through. Iger shares his journey leading over 220,000 employees. 21 Lessons for the 21st Century by Yuval Noah Harari 21 Lessons for the 21st Century, recommended by Twitter CEO Jack Dorsey, explores the present lives. Yuval Noah Harari shows how to protect from nuclear war and technological disruptions, which is relevant in the current times. The Making of a leader: Recognizing the Lessons and Stages of Leadership Development by J Robert Clinton Recommended by Adam Grant, The making of a leader takes us through the leadership journey — <a href="https://www.inc.com/jeff-haden/15-great-leadership-books-on-adam-grants-summer-reading-list.html">how a leader develops over time</a>. The book narrates how to recognise your direction in life, and where you stand in the leadership development cycle. It also offers to identify people with leadership characteristics. The book shares insights on achieving and sustaining success. Keeping at it: The quest for sound money and good government by Paul Volcker Warren Buffet, a global investor recommends reading Keeping at it, a book that narrates the changes that have taken place in America — its people, government and the economy after World War II. Paul Volcker was the chairman of the Federal Reserve for eight years. Through his book, Volcker shows how to deal with a crisis. SEE ALSO: <a href="https://www.businessinsider.in/india/news/in-meerut-india-monkeys-snatch-coronavirus-tests-locals-fear-transmission/articleshow/76090064.cms">Watch the bizarre video of monkeys who snatched blood samples of COVID-19 patients in India — locals fear transmission</a> <a href="https://www.businessinsider.in/entertainment/news/sonu-sood-life-story-first-film-love-story-net-worth/slidelist/76088911.cms">Sonu Sood’s life story, his date of birth, see his family pics ⁠— all the things that Indians want to know about the latest internet sensation</a> <a href="https://www.businessinsider.in/business/startups/news/instamojo-is-now-approving-small-ticket-loans-on-whatsapp-and-it-has-become-an-instant-hit/articleshow/76088012.cms">Instamojo is now approving small ticket loans on WhatsApp and it has become an instant hit</a>

Six books recommended by luminaries like Bill Gates and Warren Buffett

New Delhi, Mar 7 () Panicked Yes Bank customers were seen queuing up at the bank's ATMs at various locations, but to no avail as as most cash-dispensing machines ran dry, after the Reserve Bank placed the crisis-hit lender under a moratorium. However, many a customers said they were able to withdraw the stipulated amount of Rs 50,000 through cheques at Yes Bank branches. Customers are also facing trouble because net banking services are not working and some even complained that their credit cards are also not working. As the Reserve Bank has superseded the board of the private sector lender on a precarious financial condition and has appointed a former SBI executive as its administrator, customers cannot withdraw more than Rs 50,000 under the moratorium period till April 3, 2020. Several customers at a bank branch in central Delhi said they faced no problem while withdrawing the sum of Rs 50,000 through cheques. "Internet banking is not working, even the credit card has stopped working; however, I withdrew my amount through cheque," said Lalit Kumar, a Yes Bank customer of its Gole Market branch here. At an ATM in Ghaziabad, Yes Bank customers queued up to withdraw money, but to no avail as there was no cash. Most of the Automated Teller Machines (ATMs) wore a deserted look due to non-availability of cash. A Delhi-based customer said he was able to withdraw limited cash of about Rs 3,000-4000 only from an ATM, adding the cheque withdrawal helped him take out the remaining amount under the moratorium restriction. However, a display at the Post Office situated at Parliament Street read: "No Yes Bank cheques will be cleared until further orders from the RBI." Besides, people also complained that Yes Bank facilitated meal cards are not working. Payment facilitator for small businesses Instamojo's CEO &amp; Co-founder Sampad Swain said the company will be temporarily withholding payouts to merchants having Yes bank accounts until further clarity on the situation. "This is to ensure that no merchant's funds get blocked. As an alternate, we have provided our merchants the option to change their registered bank from Yes bank to another account," Swain said. To soothe the hassled customers, Yes Bank's administer Prashant Kumar in a statement issued on Friday said that there was no need for panic and the bank was working to bring the situation under control before April 3 -- time till when the moratorium remains in place. "The current moratorium has been brought into effect keeping the depositors' interest in mind and towards restoring their confidence. "A solution is being worked upon to revive the Bank well before the moratorium period of thirty days ends. The bank is also taking necessary steps to ensure seamless transactions for the customers. We assure the depositors that their money is safe and there is absolutely no reason to panic," Kumar said. Fintech start-up in payment and transaction technology space PayNearby said: "At PayNearby, its business as usual. Our systems are up and running without any disruption. We are a strong technology backed fintech company and have multiple banking partners." "Yes Bank has been a very valuable partner in our journey and we are confident that they will soon bounce back and we will be able to continue working together again," said Anand Kumar Bajaj, MD &amp; CEO, PayNearby. Yes Bank also said it remains available to address all queries and clarifications. Depositors are requested to get in touch with the nearest branch for any assistance. "We would like to inform you that our ATMs are now functional. You can locate the ATM nearest to you here: https://community.yesbank.in," read the Yes Bank tweet, tagging the twitter handles of the Finance Ministry and the Reserve Bank. "Our working hours are Monday-Saturday (9 am to 8 pm)," it added. Stock of Yes Bank came under heavy selling pressure on Friday and plunged by more than 84 per cent intra-day before closing the day down by 56 per cent at Rs 16.20 apiece on BSE. Country's largest lender SBI, which has evinced interest for 49 per cent stake in the private sector lender, said it is evaluating the draft reconstruction scheme for Yes Bank. "We have received draft scheme of reconstruction for Yes Bank. Our investment and legal team is doing due diligence," Chairman Rajnish Kumar told reporters in Mumbai on Saturday. Bank officials are doing due diligence of the draft scheme, he added. He also said many potential investors have approached SBI after seeing the draft scheme On Friday, the RBI announced a draft scheme of reconstruction for cash-starved Yes Bank. In its draft 'Yes Bank Ltd. Reconstruction Scheme, 2020', RBI said the strategic investor bank will have to pick up 49 per cent stake and it cannot reduce holding to below 26 per cent before three years from the date of capital infusion. KPM MKJ

Yes Bank customers scramble for cash withdrawal at branches, most ATMs run dry

<ul><li>As of December 2017, public sector banks accounted for 55.4% of all loans to micro-small-and-medium sized enterprises. </li><li>However, half of the country’s public sector banks are on the RBI's <keyword id="6417074" type="ORGANIZATION" weightage="20" keywordseo="prompt-corrective-action">Prompt Corrective Action</keyword> (PCA) watchlist, which involves the imposition of credit limits. </li><li>As a result, funding for small businesses is harder to come by. They will have to the turn to the private banks and non-banking financial companies in the meantime.</li></ul> Following the twin hits of demonetisation and the GST, India’s small businesses have another problem to contend with: a dearth of credit options. This is largely due to the credit limits that the <keyword id="6354335" type="ORGANIZATION" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> has placed on half of the country’s public sector banks through its Prompt Corrective Action (PCA) framework. As of December 2017, public sector banks accounted for 55.4% of all loans to micro-small-and-medium sized enterprises (MSME), according to a report by <a href="https://udyamimitra.in/Default/DownloadFile/MSME_Pulse_Report.pdf">Transunion CIBIL</a>, a credit information firm, as well as 79% of all loans less than ₹1 million to new borrowers. State-owned banks are an important source of cheap financing for these businesses, especially since the MSME segment is a priority sector under government guidelines. However, funding is harder to come by for this segment. As a result of a pileup in non-performing loans, 11 of India’s public sector banks are currently placed under the Reserve Bank of India’s PCA programme. Banks are added to the watchlist once they cross a certain risk threshold for bad loans, return on assets or capital adequacy. All the banks on the watchlist, which includes the likes of IDBI Bank, UCO Bank and Oriental Bank of Commerce, have non-performing loan ratios in excess of 15%, which means more than 15% of their outstanding loans are unlikely to be recovered. Under the <a href="https://rbi.org.in/scripts/NotificationUser.aspx?Mode=0&amp;Id=10921">PCA framework</a>, which was revised in April 2017, the major activities of banks are curtailed by the RBI. The programme imposes restrictions on lending, risk-weighted assets, branch expansion, capital expenditure and compensation of senior managers as well as higher provisions for loan losses. The restrictions are meant to discourage profligacy, encourage tighter lending standards and restore the financial health of a bank. However, being sanctioned under the framework does not necessarily translate into an improvement in performance. India Overseas Bank was put on the watchlist in October 2015. It’s non-performing ratio has swelled from 12.6% at the end of 2015 to 22% at the end of 2017. The bank’s net loss also widened to ₹34.2 bilion at the end of fiscal 2017, from ₹29 billion the previous year, partly on account of higher loan provisions. Hence, it’s quite likely that some of the banks on the PCA watchlist will have to deal with credit limits for a long time. An additional 5 public sector banks are expected to be added to the PCA watchlist soon, according to ICRA, a ratings agency.This is unfortunate. Small businesses reportedly account for 40% of India’s GDP and are a major engine of job creation. Their growth, and consequently, India’s growth depends upon access to a sufficient amount of financing from state-owned lenders. To make matters worse, they’re often perceived as a riskier bet than larger businesses, which don’t rely on banks for funds as much their smaller counterparts owing to their access to bond markets. The Indian government’s ₹2.11 trillion recapitalisation plan, which was announced in October last year, is envisioned as a solution to this problem. The first round of the plan involves the allocation of ₹523 billion to the 11 banks on the PCA watchlist. While this is a step in the right direction, it will likely be a while before small businesses benefit from the increased liquidity at these banks. The bulk of the invested funds will primarily be used to plug the holes caused by large non-performing accounts in these banks’ balance sheets. Additionally, as part of a complementary set of reforms, smaller public sector banks have been asked to reduce their <a href="http://indianexpress.com/article/business/banking-and-finance/cut-loans-to-firms-focus-on-retail-govt-to-smaller-banks-5040722/">lending to corporate clients</a>, which includes small businesses, and increase their retail lending. The private sector is looking to fill the void in the meantime. According to CIBIL, private banks have increased their share of loans to the MSME sector from 25.4% to 28.4% from December 2015 to December 2017, while non-banking financial companies (<keyword id="6354598" type="ORGANIZATION" weightage="20" keywordseo="NBFCs">NBFCs</keyword>) have increased their share from 7.9% to 10.4%. There are also a growing number of startups that are focusing on lending to SMEs such as Instamojo, Namaste Credit and Lendingkart. However, in turning to the private sources, the MSME segment has to deal with higher rates of interest and stricter norms. While this might reduce the rate of defaults, a lot of small businesses will be left behind.

India’s small businesses are suffering from a shortage of credit options

After spending hours on internet, scanning through social media, writing emails and recruiting for different startups, founders of hiring startup ‘Belong’ concluded that top coders or product managers rarely apply for jobs. 
 
Vijay Sharma and Sudheendra Chilappagari said that most recruitments at these levels happen through connections or referrals, making it tough for employers to find great talent buried a few levels inside a company. 
 
The two have helped hire people for startups including Exotel, Practo and Instamojo in their earlier jobs. They have now focussed on their know-how into a hiring company that uses big data and rules to tell which gifted programmer is likely to move jobs or which manager is bored of the job. 
 
Belong not only matches skills but also checks if a potential hire can culturally fit in. 
 
"People leave a lot about themselves online. That helps us match a potential employee and the culture of the organisation," Sharma, who has so far bootstrapped the company to a 35-member team told Economic Times. 
 
The financial daily reported that the Bengaluru-based Belong analyses internet data and crumbs of information left on social media by potential hires to help companies identify candidates with high degree of precision. 
 
"People do skill matching all the time. But what really makes an employee stick is the culture," added Sharma, who has been in stealth mode since leaving Exotel last year. 
 
Many startups these days believe in hiring smart people and then figuring out a role for them, especially at senior levels. Mostly, these people might not be actively looking for jobs. 
 
"People have joined us from various industries like FMCG and telecom, and you don't see a direct fit most of the times," Saurabh Sengupta, who heads recruitment at Zomato, told ET, adding, “the deal maker is if they are like-minded. We are taking a lot of bets on people and not on resumes.” 
 
Belong, which was earlier known as Dataemo, has more than 15 paying customers including fast-growing companies such as Ola Cabs, Xiaomi, Snapdeal, Zivame and Akosha. 
 
It profiles companies and potential hires based on various factors including the state from which they are, whether they are parents or is the engineering team low on women coders. 
 
"Some people might even come to you and say we need ex-Army men in our operations team," said Sharma. 
 
Sharma told the financial daily that using Belong, recruiters have rolled out over 100 offers in the past nine months, typically for senior engineering and product roles. 
 
"We saw many of our friends, startup founders and others always saying, 'I would like to work with people I will enjoy working with and make an impact'. We are meant to belong, especially somewhere, where we spend 70% of our lifetime working," Sharma said. 
 
(Image: Thinkstock)

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