Startups

This Startup Is Using SMEs’ Digital Footprint To Sanction Loans

Source | Entrepreneur : By Vanita D’souza

Imagine this: You have received an important order from your client and to complete it you need about INR 10 lakh. You have two options.

First, visit a bank and submit your documents. Officials will process your application and sanction your loan after proper verification and you will get the cash in hand in seven to ten days. Second is the easy step of searching SME lending platforms online. Share the required information with any of them and your loan will be processed in 48 hours.

With endless documentation and slow processing systems in place to make the entire procedure as cumbersome as possible, getting loan smoothly is every SME’s dream. Fintech companies are actually working to turn this dream into a regular affair.

FlexiLoans, a digital lending start-up, is using Data Analytics tools, including your point-of-sale records, to solve credit problems faced by small businesses in the country.

In an exclusive conversation with Entrepreneur IndiaManish Lunia, FlexiLoans Co-founder Manish Lunia talked about the company’s aim and interest in serving the underserved and the underserved business class of India.

NPA-deal

In 2015, concerns over growing Non-performing Assets (NPAs) started hitting hard and worrying banks grew overtly cautious. As a consequence, SMEs, as is always the case, found themselves at the receiving end.

In the same year, Lunia along with his ISB(Hyderabad) batchmates Ritesh JainAbhishek Kothari and Deepak Jain came up with the idea of FlexiLoans to alleviate the problems of these small businesses using digital footprints.

Today, the firm receives 3,000 applications every month, of which, it sanctions 500. The average sum sanctioned is INR 5 lakh, which even goes up to INR 50 lakh for tenure of six months.The company’s loan book has an NPA of less than 0.5%.

Lunia’s mantra is simple: “A business man doesn’t take loan with an intention to default. We do not provide loans for starting a business. We deal with established firms or help the newly established businesses grow. Additionally, if a company defaults, our partners have a choice to block them from their platforms.”

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