According to World Bank data, only 22% of Indian adults are covered by the credit bureau, which means the remaining do not have a credit history, and hence, do not have access to loans. The bank needs the confidence that the borrower has the experience, education and industry knowledge to successfully manage the business. Additionally, the borrower’s reputation plays a significant part in getting a bank loan. At some point, small business owners approach banks and financial institutions for loans for the growth of their business. The MSME credit history shows the track record for repaying debts. There is a recurring need in the market to aggregate information from a large number of data sources like the credit bureau, the application form and social networks in order to assess risk and creditworthiness of the MSMEs. Below are 5p companies that are providing ‘Credit’ Cushioning to MSME.
Crediwatch is a leading ‘Data Insights-as-a-service’ company that provides lenders, businesses with actionable credit intelligence on private entities they need to improve trust and increase their lending and trading activity. The company has partnered with respected financial institutions to provide them credit intelligence of more than 50 thousand businesses. The company has provided insights on 50,000+ businesses and $7 billion loan portfolio.
Happy Loans provides customised loan offerings to micro-enterprise owners to meet their specific demands. It assesses over 1,000 variables about the merchant to underwrite their micro business. Its credit model is based on the merchant’s level of business engagement with the partner, his behaviour towards borrowing, APIs, demographics, and business trends. The ML-based MSME digital Lender has launched a ‘Lockdown Loan’. The digital credit facility is developed to address the working capital woes of Indian microenterprises during the lockdown period. It will provide them capital access of Rs 25,000 and Rs 50,000 with bullet repayment after 6 months. The Lockdown Loan comes with COVID-19 protection insurance, wherein full loan waiver is extended to the coronavirus infected.
Aye Finance is a commercial institution built with the mission to solve the funding challenges of MSMEs, and enabling their inclusion into the mainstream economy. Aye Finance differentiates itself by creating a technically-enabled process that builds credit insights through a variety of available business and behavioural data. This effective credit appraisal, coupled with the use of modern workflow automation and a small but engaged workforce is helping bridge the gap between the MSMEs and organised lending.
FlexiLoans is an online lending platform which started with an endeavour to solve the problem that MSMEs face in accessing quick, flexible, and adequate funds for growing their businesses. The platform’s technology-powered online marketplace is the best model to meet the financial requirements of MSMEs, who do not have a credit history and hence, cannot avail business loans from traditional banking channels.
Ziploan, a tech-enabled, RBI registered NBFC, helps in providing loans to small businesses. The platform addresses the need of the SME sector, which has been ignored by financial institutions. The platform generates a unique ZipScore for each loan applicant by developing an automated underwriting algorithm.