Name : Harsh Nathany
Position : KyoPay Technologies
When was your first visit to Myanmar?
I came to Myanmar in 2015 from Paris. I lived there for close to 3 years wherein I did my MBA and joined Rocket Internet. The company then moved me to Myanmar to be part of Shop.com. mm as an accelerator to the business. Eventually I became the Director and then Managing Director of the company.
How was KyoPay established?
KyoPay is a joint venture between Acudeen, Philippines and Anthem Asia, Myanmar. Anthem Asia is a private equity funder and Advisor; they have invested in various portfolios in Myanmar. Acudeen, on the other hand is the similar business model to KyoPay. They have been operational for close to 2 years in Philippines. They have done approximately around $12 million of invoice financing in 2018. Acudeen wanted to expand to other countries as the need was evident and their first choice was Myanmar. On research, we found that the credit gap in Myanmar is over 12 billion USD. So we wanted to create a responsible business and help cover that gap. KyoPay mission is to be the leading and most accessible platform in providing liquidity for SMEs using movable assets and technology. KyoPay means ‘Pay in Advance’, it is a Myanmar word, and our logo is an owl which shows prosperity and good luck.
Who actually own KyoPay?
KyoPay is a jointly owned by Anthem Asia and Acudeen Technologies.
How did you end up in current position?
When I exited Shop.com.mm as a managing director, I was looking to take a break from my career. So I thought of travelling for a few months. During that time, I met with one of the directors of Anthem Asia and she had suggested me to look at the business model of KyoPay. The idea really interested me as eventually KyoPay would also become the credit scorer of Myanmar. Myanmar does not have a credit scoring system. No one has clarity on the financial standing of businesses So, the final goal of KyoPay is to become a credit scorer in the next 5 years, purely organic and based on payment history of the companies. This was an opportunity difficult to let go and I immediately joined the company as the CEO.
How is the current statistics like for KyoPay?
What made you move from Shop. com.mm to KyoPay?
In my lifetime, I have learnt that knowledge is power. Knowledge not through books, but through experiences. 5 years ago, when I left India, I was on a mission to learn cultures, people, arts and explore the different stigmas of every country. I have traveled to over 33 countries, 90 cities in the last 4 years. In the process, I came across an opportunity to create an E-commerce ecosystem in a country where online shopping meant Facebook messaging. I immediately took up the opportunity and moved to Myanmar from Paris. Fast forward 3 years later, Shop.com.mm was bought by Alibaba. It was an immense satisfaction seeing that I was a part of pioneering E-commerce in Myanmar and making it one of the biggest brands of the country. When I came across KyoPay and its invoice discounting service, I knew that I am again getting a chance to be a pioneer in Myanmar for FinTech. KyoPay offers a solution which no other entity is able to provide which is access to cash liquidity. As one of the last frontier market of the world, Myanmar has a huge potential in expansion but also poses a problem with cash flow. I took this as an opportunity to be a part of financial inclusion of Myanmar. In my opinion, the future belongs to online marketplaces and sophisticated financial solutions. The world is becoming smaller, businesses have opportunities of selling their products worldwide and getting their payments instantly. The combined estimation of E-commerce and FinTech is pegged at over $15 trillion by 2020. FinTech and E-commerce are intertwined with each other. One cannot function without the other. Having the necessary experience in E-commerce, it was a calculated move to join FinTech and learn about this industry, which would eventually help me to be a “Key Opinion Leader” in both the industries.
How did you face the challenges in KyoPay?
The biggest challenge we had was ‘How do we start this business?”, because it is a very new concept and many of our support systems in Myanmar did not understand the overall functionality. Since KyoPay is not a bank or a regulated entity, we had to partner with one of the banks for fund transfers through a segregated account. A segregated account is wherein all the money of the invoice buyers and sellers are kept and moved according to the transactions. Most of the banks did not understand the concept so I think that took us over 5 months to convince CB bank to be our accounts partner. Second challenge was the core banking system in Myanmar which is still not user friendly. Since KyoPay is completely online based, the funds had to be transferred manually as there is no core banking yet. We do hope that in the near future this would be resolved and our clients can withdraw/deposit their amounts directly without the manual process.
What is your target market segment and how successful have you been in that segment so far?
In terms of sellers, we are targeting industries in Manufacturing, Wholesale and Distribution, Marketing & PR agencies, Staffing and IT, Security, Transportation, Business Services, and Infrastructure projects. In terms of buyers, the best part of KyoPay is that anyone can be a buyer. If you have savings and want to buy some invoices to get short term gains, with simple KYC process, they can be owners of invoices. In our registered funders, 95% of them are individuals who have savings and are looking for investment options. In terms of success, it’s too early to comment as we are just 2 months old, but the response is positive and seeing a lot of traction from service sectors. Once we get a concrete hold on certain sectors, we want to expand to every business possible.
What are your future plans?
We plan to grow exponentially at 30% per month for the next 6 months. Then we would stabilize at around 10% growth rate. We aim to cater to 10,000 SME’s by 2020 and transactions worth 200 million USD by 2020 to cover 1% of the countries’ credit gap. Presently we are focusing in Yangon region but will expand to Mandalay, Taunggyi and others 3rd quarter of 2019. We also plan to partner with banks who would be like institutional funders for our SME invoices.
How do you differentiate KyoPay from other competitors?
In Myanmar, KyoPay does not have any competitors yet. Technically, we are the first one. There are some banks who do invoice financing, but they only do in the form of lending which means that it’s like a loan which needs to be repaid. With KyoPay, they sell invoices, they get the money and they are done. They don’t need to worry about repayments and loans and can focus on new clients and expansion. Second difference is that we do 100% financing of the invoices and there is no part financing involved. Banks usually take the invoices as collateral and give 50% – 70% of the loan amount.
Are there any differences between Myanmar and other developing countries in terms of E-commerce development?
Yes. A lot, actually. Financial inclusion is still nascent here which means people hardly use credit cards and other products to pay. This majorly effects Ecommerce landscape as there is a lot of uncertainty involved with the orders being cancelled. Though Myanmar has one of the high mobile usage penetration in Asia, it is used more for social media rather than online shopping. Also the logistics is not well developed yet, which means we cannot cover the entire country well. Having said that, The market saw a tremendous response to E-commerce related companies coming up which shows that there is a lot of potential and only with time, it will get better.
How big do you foresee KyoPay to be in a year’s time?
Apart from the overall Cash Flow issue that we are solving, the other interesting part is the online auction of invoices with bidding system which excites both the sellers and funders. Replicating this in Myanmar by others will not be easy. So with a limited competition, we are looking at a growth of over 10 times by end of 2019. We estimate that cumulatively we would be able to help in invoice receivables amount of over 150 billion Kyats by 2019. We aim to have 300 active SME’s selling their invoices regularly and over 600 Funders who would buy those invoices.