As business reporters too, we're no strangers to the pivots that businesses make. But the articles you are about to read today probably has the strangest of pivots.
One one hand, you have a Jaipur-based cooperative society called United Multistate Credit Cooperative Society (Marwadi). It served small- and medium-sized enterprises (SMEs) in towns and villages, farmers, and those in need of micro finance loans. And on the other, there is UK-based crypto firm, Cashaa, that provides off-shore banking services to crypto-asset exchanges looking to sidestep their respective country’s banking system.
Since 2012, when it was founded, nearly Rs 580 crore (US$77.5 million) of deposits have flowed through United's coffers. But after major frauds at other co-operative societies, disenchanted depositors sought to withdraw as much as Rs 10 crore (US$1.3 million) of their money at once. And then came Covid, which meant it now had borrowers who also couldn't repay their loans. Today, United has almost Rs 80 crore (US$10.7 million) in pending repayments. Stuck between depleting deposits and waylaid loans, United's founder and CEO Dinesh Kukreja got creative.
Crypto-assets such as bitcoin and ether were on a renewed rally after a quiet couple of years. Between March and October 2021, bitcoin’s price shot up from around US$5,000 a unit to US$10,000. “Maybe this (crypto) will save us, and help us build back the business,” Kukreja recalled thinking at the time.
Enter Cashaa (hahahahah)
It offered financing and tech chops in exchange for a 51% stake in the new venture, called Unicas. In its new avatar, Unicas is a crypto exchange with nine listed tokens, offers interest-bearing crypto deposits, and has plans to roll out loans secured by crypto tokens in November.
For Cashaa this was a chance to build a retail business and expand its own native 'penny stock' like token CAS. And for United, Unicas was its chance to return to its depositors, the Rs 78 crore (US$10.4 million) it owed them.
In our today's blog articles in our FORUM, WE looks at how Cashaa was able to get away with conducting banking-like operations even though it doesn't work with a bank, and what fate lies ahead of United in its crypto avatar. The setting for this implausible story? Jaipur, Rajasthan, INDIA ... #yusufbhandarkar #bitcoin www.multimediastudio.net
