My guest today is Ravish Naresh, founder and CEO of Khatabook. The Indian economy is set up structurally differently to the West. While the US has big box retail and all the benefits that come with it - efficient supply chains, readily established infrastructure, and access to credit - India largely operates in the backs of the MSME segment; micro, small, and medium enterprise. Understanding the MSME segment is critical if you want to understand India. It's the heartbeat of the Indian economy and it represents over 60 million businesses, largely in tier two and tier three cities. The limiting factor for growth for most of these businesses historically has been access to credit. They're underbanked and operate on a cash basis, and it's why this week I was excited to have Ravish on Return on India to help us better understand the segment and how to build for it. Khatabook is helping merchants in India digitize their bookkeeping and is bringing them from the offline world into the online economy. Today, Khatabook has over 10 million monthly active users, and the platform records a staggering 250,000 transactions per hour. In this discussion, we chatted through how to understand the nuances of the MSME segment, the challenges of building for this segment, and the second and third-order effects of including MSMEs in the formalized Indian economy. Please enjoy my conversation with Ravish Naresh.   For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.   ----- Return On India is a property of Colossus, LLC. For more episodes of Return On India, visit joincolossus.com/episodes.   Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.   Follow us on Twitter: @RomeenSheth | @joincolossus Show Notes [00:03:17] - [First question] - Overview of the MSME segment in India with examples  [00:10:16] - How the retail market structure in India differs from the West [00:15:58] - The role of Kirana stores and Khatabook in local Indian economies [00:21:13] - Potential challenges and upsides of selling software to MSME businesses [00:25:50] - Khatabook’s use of a free software wedge to leverage credit business [00:31:08] - How Khatabook uses bookkeeping data to make lending decisions [00:35:53] - The network effect enabled by Khatabook’s platform [00:42:36] - Projected second-and third-order effects from Khatabook’s foundations