Banking & Payments
The guy who built Aadhaar is now tackling SMEs
Nitin Mittal is launching Solv, a StanChart-backed fintech that’s replicating e-commerce models.
Nitin Mittal says his KPI is how many jobs his new venture will create.
“Helping SMEs grow means they employ more people,” he said about his new venture, Solv.
He says he hopes the company can help create up to 10 million jobs in India over the next three years. That’s just a start, though, as the model being developed should scale to other emerging markets.
The Bangalore-based Mittal has recently served as Standard Chartered Bank’s head of innovation and advance technology, and then shifted to SC Ventures, the bank’s internal accelerator. He began working on Solv in early 2019.
He’s also served as digital and chief data officer at AIG and founded a healthcare-focused software company, Cureus Technologies. But Mittal is probably best known for having been the chief technology officer who oversaw the creation of Aadhaar, on behalf of the Unique Identification Authority of India.
Helping small businesses
But Solv came out of his time working at StanChart, first in digital banking then transaction banking, at which point he met Alex Manson, who had recently launched SC Ventures. And Mittal had a pain point he wanted to solve.
Having been an entrepreneur himself, he knew what it was like to deal with Indian banks as a small company. “Opening an account, getting a credit card – it’s a nightmare,” he said.
Furthermore, small businesses are on their own when it comes to payments, invoicing, cash on delivery, reconciliation, and business logistics.
As a transaction banker, Mittal witnessed attempts to create an ecosystem for big corporate clients. Could something similar be created for SMEs, which need basic services much more badly?
Solv was created as a way of connecting India’s small businesses in order to buy and sell among one another. “The hook is commerce,” he said. “SMEs are all about trade. They always need more business. I want to ensure they can get it on our platform.”
So the first part of Solv is a B2B marketplace, with a distributed-ledger tech underpinning how SMEs communicate and transact. Small businesses typically buy and sell with people they know. Trust, as well as logistics, are fundamental. But just as Amazon and Flipkart engendered trust for the consumer space, Solv intends to enable that level of trust for business deals among SMEs.
If it gets a few million small companies buying and selling with each other, it will generate the data required to enable banks to provide financing to businesses they would otherwise avoid.
The data can also underpin new business services to the platform’s users, such as in payments, logistics, and credit, as well as areas such as tax, compliance, and finding gig workers.
There’s also a supply-chain component, as Mittal is looking for large anchor corporations to join and put their suppliers and distributors on the platform.
He says the company is now in beta with 500 SMEs, and it should go live in February. Five Indian banks, including StanChart’s local business, are also signed up.
So is Tredes, a trade-receivables platform created by the government of India. Solv has integrated Tredes’ APIs for vendors, and is adding dealer-distribution companies as well, to create an entire value chain for bigger companies.
Experian is also on board to help Solv use artificial intelligence to develop credit scores for SME users.
“We’re replicating the data-driven digital trust model, using credit history, operations history, and alternative data, to develop a score for trust,” Mittal said. “It’s going to be used for both business matchmaking on the site, and for financing.” He hopes other banks and lenders will come to embrace the score as a credit model.
But Solv is not a deposit-taking business; it’s not a bank, but a service that banks can use to enable SME lending.
Given Standard Chartered’s presence in Asian and African emerging markets, Mittal believes its backing can enable Solv to launch in many countries – particularly given many Indian SMEs already trade overseas.
But there could be limits to Solv’s reach, as it is leveraging the “India Stack”, government-sponsored digital layers that enable seamless KYC, identity verification, and payments.
Aadhaar is a key pillar in the India Stack. Whether Solv can easily expand to countries lacking this kind of infrastructure – or has to travel only to places where India’s government succeeds in exporting its infrastructure model – remains to be seen.