Digital Lending Space in the country is creating a new buzz. Amidst the traditional ways of banking which result in approval of only 25-40 per cent of loan applications, came the relevance of the digital approach. As per the recent Omidyar-BCG report, it is estimated that by 2023, MSME digital lending has the potential to increase between 10 and 15 fold to reach Rs 6-7 lakh crore ($80-100 billion) in annual disbursements, creating immense opportunity for both traditional lenders and digital start-ups
With tech-enabled underwriting and paperless transactions, it is now possible to provide tailor-made loans to various merchants as per their industry segments ranging from food and beverage, apparel, salon, travel agencies, automobile dealers etc. However, with access to more data for credit scoring and additional use of non-traditional data points - The new lending models are aiming to increase this threshold by 15 per cent.
1. Indifi Technologies: Indifi Technologies is a debt-financing platform which facilitates SME lending with a focus on customer-product fit. The key innovation in the approach that Indifi is bringing to the market is to design and deliver credit products basis the kind of business the MSME is in. This industry verticalization brings unique benefits to the customer as product design fits into the business cash flows of the MSME. Indifi has successfully contributed in bridging the gap in SME financing with a perfect amalgamation of technology and access to data; enabling seamless access to funding with flexible repayment options for start-ups and small businesses.
2. LendingKart: LENDINGKART Finance Limited, is a non-deposit taking NBFC, providing SME lending in India. The Company aims to transform small business lending by making it convenient for SMEs to access credit easily. The Company uses technology and analytics tools, analysing thousands of data points from various data sources to assess the creditworthiness of small businesses rapidly and accurately. The NBFC focuses on the client’s current year’s cash flows and business growth.
3. Neo Growth: Neo Growth is a pioneer and leader in the Indian e-payments industry and managed merchant transactions for acquiring banks as well as credit card issuers and large loyalty programs. It caters to the under-served market by adopting an innovative approach and validating the creditworthiness of the business. They believe in financing small business owners by leveraging the digital payments ecosystem.
4. Kredx: KredX was built to help businesses achieve their short-term working capital needs by discounting their unpaid invoices (raised against blue chip companies) to a network of buyers/financiers including banks, NBFCs, wealth managers, and retail investors. The platform helps organisations maintain cash flow by unlocking the cash that is tied up in their invoices. It also offers financiers access to risk-mitigated, high-yield, and short-term investment opportunities that are not tied to the uncertainties of the stock market.
5. Capital Float: Capital Float is a non-banking finance company (NBFC). It is an online platform that provides working capital finance to SMEs in India. Their mission lies in bridging the current gap in the market with innovative and flexible credit products for SMEs. It offers flexible, short-term loans that can be used to purchase inventory, service new orders or optimize cash cycles.