Credit evaluation algorithms for migrant workers & have nots

Reported by: |Updated: February 1, 2021

VN Finance caters to the needs of those at the bottom of the pyramid:

Mohit Kakkad

Incorporated in March 2019 as a non-deposit taking NBFC, VN Finance primarily meets the financial services needs of the mid-bottom of the pyramid. According to Founder Managing Director Mohit Kakkad, the company aims at transforming the financial sector by reaching out to the hitherto unbanked section of society. “We are providing small ticket loan offerings – Shramik Loan and Rozgar Loan – for migrant workers and financially excluded small businessmen and women. Our unique value proposition is for our target segments – people who are less educated/ have less access to financial services,” he explains.

Having its presence now in Mumbai and Maharashtra, VN Finance is currently functioning with 12 employees and it aims to expand with 8-10 branches in the next 12-18 months.



Mohit Kakkad claims that the company is extremely fast in credit assessment and disbursal. More than 90% cases take less than 24 hours for final decision and disbursement. And the approach is to deploy 24×7 service and disburse loan within a day with the least number of documents and hassle-free interaction using technology, he says.


VN Finance mainly caters to the needs of seekers of unsecured loans and those who have no security or no existing assets. They only need to prove their creditworthiness and repayment capacity. It also offers secured loans and gold loans. It has recently introduced a gold loan scheme where people can apply and obtain loans anywhere and anytime. It offers pre-payment option without any penalty, minimum documentation, shorter response time and safe custody for family jewels and gold jewelry. The ticket size of the loan starts from Rs 25,000 onwards.

While it is preparing to offer business and personal loans, it provided secured loans such as loan against property and loans against inventories, but mostly small and medium size ticket loans. Mohit argues: “Our professional team fully understands the business needs and provides funding against the goods and inventories already lying in the shops/ godowns. The small business owner just needs to furnish the inventory list, its value and his needs.”

In the current financial year, the company has so far disbursed loans worth Rs 120 million.


VN Finance is using cutting-edge technology and digital solutions to different customer\ segments. “We leverage best-in-class web and mobile technologies and analytics to develop proprietary credit evaluation algorithms, which enable us to serve our target segment quickly with the right balance of managing risks. We have created benchmarks for the processes, which are monitored religiously and constantly upgraded to the next level. We have made our processes so customer friendly that even the uneducated customers can navigate through our system with utmost ease,” says Mohit Kakkad.

At present, it is using technology tools to assess creditworthiness and loan limits for customers based on machine learning algorithms. It has built an ML-based supervised learning algorithm to automate loan application processes and is currently testing it. The algorithms will undergo constant tweaks with more and more data as business grows, says Mohit Kakkad, adding that Kitzo Insights is a key technology partner.



The company is using process automation technology and integrating workflows to service its customers. “Our strategy is based on a hybrid model, ie using technology along with physical presence,” says Mohit Kakkad, adding: “In our target segment, it will act as force multiplier. We are getting good response as we save substantial time in pre-approval activity using technology. As a result, our branches can handle more customers and customers are also happier.”

VN Finance is also developing a network of entities which can help facilitate credit to migrant workers, unbanked and financially deprived businessmen and women. It is integrating with banking intermediaries, SHGs, NGOs and correspondents to expand reach.

“We shall soon unveil other loan related services. Our next frontier is insurance broking. Of course, AUM will increase by multi-fold in the gold and personal loan segments,” says Mohit Kakkad.



VN Finance is investing heavily in technology for all its processes be it operations, marketing or approval. It plans to invest at least 5-10% of its revenue in developing and deploying technology to scale business. It has launched a business app, ‘VNFinance’, on Android, to automate the process of helping customers to get business loans. With this launch, the process for giving loans has become substantially online as well as digital and small and medium-sized businesses and shops can get business loans anytime and from anywhere.

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