{"id":7282,"date":"2022-01-11T13:30:33","date_gmt":"2022-01-11T08:00:33","guid":{"rendered":"https:\/\/razorpay.com\/blog\/?p=7282"},"modified":"2025-04-03T15:23:21","modified_gmt":"2025-04-03T09:53:21","slug":"exclusive-neobanking-report-for-smes-in-india","status":"publish","type":"post","link":"https:\/\/razorpay.com\/blog\/business-banking\/exclusive-neobanking-report-for-smes-in-india\/","title":{"rendered":"Businesses lose up to Rs 67 lakh annually : Exclusive Neobanking Report for SMEs in India"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Small and medium-sized enterprises (SMEs), also known as the backbone of the Indian economy, contribute over 30% to the GDP. With the Indian economy expected to reach USD 5 trillion by 2025, SMEs are bound to be the largest contributors to that growth.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Being a highly profitable sector, SMEs expect to be well-serviced by traditional banking. But, traditional banks and financial institutions are not as technologically equipped, thereby giving way to new-age customer-centric, digital banking players called Neobanks.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Neobanks, especially since the beginning of the pandemic, have risen to address the needs of SMEs where traditional banks may not have come through. Neobanks truly understand the unique needs of SMEs and deliver the right solutions based on the knowledge that a one-size-fits-all solution does not work. They are developing tailor-made, cutting-edge solutions for SMEs by understanding the real, current, and emerging needs in the rapidly changing <a href=\"https:\/\/razorpay.com\/learn\/business-environment\/\">business environment<\/a>.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">To understand the needs &amp; requirements of SME business owners during the COVID-19 pandemic, Razorpay conducted a survey, along with IDC (International Data Corporation). The report showcased the various challenges faced by them while relying on legacy systems and the underlying need for a feature-rich and benefit-oriented banking solution to meet their banking needs.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">An in-depth analysis revealed that SME business owners face several operational challenges while relying on the age-old banking system that hinders their businesses growth. Some of them are-\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Manually carrying out banking operations, which results in overhead<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Difficulty in collaborating with the team due to lack of multiple access to bank portals<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Performing repetitive tasks due to manual errors that cause delays<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Delays in financial and banking operations that affect customer trust<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">No actionable insights are offered which in turn affects business planning and forecasting<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Limited access to credit<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Even so, SME owners hesitate to<\/span><span style=\"font-weight: 400;\"> adopt digital banking solutions because &#8211;<\/span><\/p>\n<ol>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">41% are unsure whether to spend more on IT and digital solutions<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">36% are uncertain of their business outcomes from digital solutions<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">35% perceive that they have inadequate knowledge and training to adopt digital solutions<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">30% did not find immediate returns from previously investing in digital solutions<\/span><\/li>\n<\/ol>\n<p><span style=\"font-weight: 400;\">But it is only when they overcome their inhibitions that they will begin to understand the benefits of a Neobank. Here are a few more rich insights from the Neobanking report-\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Key Highlights<\/span><\/h2>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The annual average loss suffered by SMEs depending on legacy systems is INR 67 lakh per SME<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Over 45% of SMEs fear there is a high chance of manual errors, due to dependence on traditional processes<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">About 56% of SMEs suffered from wastage of time from repetitive tasks<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">1 in 2 businesses agreed that limited resources and lack of knowledge dragged down their digital transformation aspirations<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">53% of SMEs faced issues with tracking, calculating, and <a href=\"https:\/\/razorpay.com\/learn\/payment-compliance-secure-payments\/\">making compliance payments<\/a>, resulting in penalties<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">55% of SMEs complained about the late disbursal of <a href=\"https:\/\/razorpay.com\/blog\/what-is-an-invoice-payment\/\">invoice payments<\/a> to their vendors, which hindered the service delivery<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">53% of businesses stated that the risk of manual errors is high in business reports created for various purposes, including taxes, regulations, and internal performance reporting<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">63% of SMEs want to automate the collection and formatting of inputs into expense systems<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">66% of businesses want easier access and faster means for loan approvals and verification.\u00a0<\/span><\/li>\n<\/ul>\n<div style=\"text-align: center;\"><a style=\"border-radius: 3px; background: #528FF0; padding: 15px; font-weight: 600; cursor: pointer; text-decoration: none; color: white;\" href=\"https:\/\/razorpay.com\/x\/neobank-report-for-smes-in-india\/\">Tell Me More<\/a><\/div>\n<div><\/div>\n<div><\/div>\n<div>\n<p><span style=\"font-weight: 400;\">There is no surprise that the pandemic has had a detrimental impact on SMEs in all stages of the value-creation cycle \u2014 from revenue generation to collection. The lack of real-time, intelligent digital banking capabilities proved to be a huge setback for companies that wanted to scale but could not. As a result, the majority of them faced obstructions in the business cycle: delayed receivables, payments, and restricted access to capital.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">To overcome these challenges, SMEs require a next-gen business finance platform, designed to supercharge the end-to-end banking experience.\u00a0<\/span><\/p>\n<div style=\"text-align: center;\"><a style=\"border-radius: 3px; background: #528FF0; padding: 15px; font-weight: 600; cursor: pointer; text-decoration: none; color: white;\" href=\"https:\/\/razorpay.com\/x\/\">Sign up on RazorpayX<\/a><\/div>\n<\/div>\n<div><\/div>\n<div><\/div>\n<div><\/div>\n<div><em>Source: IDC Infobrief commissioned by Razorpay, SME Banking is Broken: Will India\u2019s Promising Neobanks Fix it?, Doc. # #AP241268IB, October 2021<\/em><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Small and medium-sized enterprises (SMEs), also known as the backbone of the Indian economy, contribute over 30% to the GDP. With the Indian economy expected to reach USD 5 trillion by 2025, SMEs are bound to be the largest contributors to that growth.\u00a0 Being a highly profitable sector, SMEs expect to be well-serviced by traditional<\/p>\n","protected":false},"author":74,"featured_media":7287,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[27],"tags":[],"class_list":{"0":"post-7282","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business-banking"},"_links":{"self":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/7282","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/users\/74"}],"replies":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/comments?post=7282"}],"version-history":[{"count":2,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/7282\/revisions"}],"predecessor-version":[{"id":21806,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/7282\/revisions\/21806"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/media\/7287"}],"wp:attachment":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/media?parent=7282"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/categories?post=7282"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/tags?post=7282"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}