The co-origination platform has reimagined lending with its phygital model, which uses technology and authentic in-person service:
Mahesh Dayani explains that analytical rule engine helps the company in faster credit decisioning, resulting in quicker TAT
Small Business FinCredit India, or SBFC Finance, is the first NBFC in India to set up a bank-NBFC co-origination platform in January 2019 with ICICI Bank.
Financing small businesses comes with its own challenges, especially in documentation, unpredictable cashflows and so on. SBFC Finance’s products and services are delivered through a phygital model. It uses smart technology to enhance efficiency and makes the customer journey easier. It has established tech-led profitable growth in the past 3 years.
SBFC Finance’s Co-founder and CBO is Mahesh Dayani, who is a key person of the senior team overseeing the firm’s business growth through product expansion, brand development and strategic partnerships. He has more than 26 years of experience, having worked earlier with Kotak Mahindra Bank.
Says Dayani: “SBFC Finance’s standing today is testimony to our risk management skills and ability to design and launch products that meet diverse needs without compromising on asset quality. Our approach is to reimagine lending with the phygital model, which uses technology and authentic in-person service.”
Dayani says the company’s direct connect and local presence through a hub-and-spoke model provides valuable insights into the minds of its customers, strengthening its understanding of underserved markets. This distinct approach is helping customers move from an informal segment of business to a more formalized ecosystem, says he.
LOS App
SBFC Finance optimizes business processes and customer service using advanced data analysis. It has taken the entire process from application to disbursal to a digital mode through its website. “This is done by using our in-house Loan Origination System (LOS) app called LeviOSa (meaning light). It is both a mobile and a web application, with strong microservices-based workflow engine and integrated with many interfaces online for faster processing and effective credit decisioning. Our analytical rule engine helps us in faster credit decisioning, resulting in the quicker turnaround time to customers. With our mobile customer application, we are handing the power of self-service to our customers. LeviOSa is integrated at the back end with India Stack, enabling our officers to give instant sanctions. No files, no paperwork.”
Tech-Led CRM
The company understands that a small customer may not yet be comfortable with this technology. So, it also operates on an assisted digital model. Its loan officers have the app through which they digitize the application process at the office/residence of the customer.
SBFC Finance strongly believes that it can make loans easy only if the process is made easier for the employees and the customers. Its customer app has a variety of features empowering a customer to do a number of activities. “The customer can view loan history, make payments, get product details and various offers, locate a branch, calculate EMI, refer a friend, make a service request and request for interest certificate,” says Dayani.
Analytical Intelligence
SBFC Finance has deployed a data warehouse to generate back-end analytical intelligence. It uses integrated straight through processes to deliver an easy experience to the customer. What is unique is the backend intelligence it has have built in its ‘Direct to Customer’ (D2C) approach. “We crunch hundreds of data points to arrive at segmental understanding of these small businesses and identify potential good credit in areas, where we have a branch. The machine identifies, the human executes. The car is simple to drive, what’s below the bonnet drives that simplicity,” explains Dayani.
Online Gold Platform
The pandemic forced the company to explore alternative ways of getting things done. Setting up the entire infrastructure to enable work from home for employees to facilitating customer onboarding using video KYC and digital uploads was crucial and Dayani says the company is taking a fresh look at costs and exploring whether there is another way of growing business without proportionate rise in fixed costs. “For example, we launched ‘Gold Genie’, which is an online gold platform wherein our employee visits the customer’s home, values his jewelry, creates his accounts and disburses money in his account in less than 30 minutes. If this initiative scales up, we will not need to put up thousands of branches. We will achieve the same productivity yardstick with a fraction of cost,” he says.
In-House Process
The whole process behind a loan has been created in-house – origination, underwriting and collections, Says Dayani, elaborating: “That’s our DNA. It does take a lot of effort to build the initial platform and takes a while before you see the green shoots of disbursements and productivity. We’ve come a long way in building our monthly disbursals from less than Rs500 million to Rs1.50 billion.”
