Surging covid, wilting transactions

The second wave of Covid-19 is wreaking havoc on all of us. It's also an economic emergency, choking the engines of India's growth. Bearing the maximum brunt are small and micro businesses- the fruit vendor, the tea shop owner, the kirana store and multiple such neighbourhood businesses. From whatever has been observed so far, the second wave has caused far greater chaos than the first one. We will tell you what's happening with small and micro businesses at the ground level based on what we have seen through our data:

Number of new infections and how badly a state/city is affected has a direct bearing on the transaction data. For example, in Gujarat, while overall transactions are down to only 87%, in Ahmedabad which reported highest number of fresh cases this number stands at 66%. In Madhya Pradesh, which has seen a sharp increase in new infections, transactions have seen a sharp decline. This is more pronounced in places like Indore where it has come down to 53%, thanks to a lockdown imposed by the state government. For Bhopal, this number stood at 70%.

In Chhatisgarh, Raipur went into a lockdown much earlier than other states, leading to transactions dropping by 66%. Also a reason why transaction levels in Chhatisgarh are among the lowest at 58%. Mumbai being the financial and economic capital of the country was still underperforming as compared to pre-covid levels by 8% in terms of daily transactions, and now has been hit hard by the second wave. The transactions have already dropped by 31%.

Interestingly, number of active merchants on our platform hasn't taken a huge hit. In Bihar and Odisha, 94% merchants are still active, despite the second wave.

In fact, the number of merchants across all categories of businesses transacting at a daily level is ~40% higher when compared to the same period last year when the entire country was under lockdown. Even with very high number of daily cases in Delhi and Mumbai, we are seeing close to 85% merchants being active on our platform. This means that merchants are better prepared to face the second wave than the first one.

How do we know all this- OkCredit works with more than 5.5 million active merchants across 2000+ towns and 100+ categories, who use our app to track their account receivables and payables

At OkCredit, daily transactions had recovered from April 2020 lows and have surpassed February 2020 highs. In Feb’21 we recorded 9% higher daily transactions than Feb’20. Details on how we have seen recovery shape up are here.

The small and micro merchants have learnt ways to cope during a pandemic. We have seen increased acceptance of digital tools among the SMB community and we expect that to accelerate further.