Ameet Venkeshwar, CBO, LoanTap is transforming the company’s SME lending landscape, focusing on sectors like FMCG, Pharma, and HoReCa:
Ravi Lalwani: What has been LoanTap’s business growth in SME lending over the last 3 years? What are the top 3 regions, top 3 products, and top 3 industry sectors?
Ameet Venkeshwar: Over the last 3 years, our SME lending has grown with a CAGR of 53% with a growth of more than 170% over the last year. In India, the past few years have seen significant growth in SME lending and we been able to capitalize on that.
In SME lending, Bengaluru, Delhi-NCR, and Pune emerge as top regions due to their vibrant entrepreneurial ecosystems. Key products driving growth are Purchase Invoice discounting, Working capital term loans, and Receivable Finance, which cater to diverse financing needs. Among industry sectors, FMCG, Pharma, and HoReCa (hotel/restaurant/catering) businesses stand out, benefiting from specialized financial solutions tailored to their operational dynamics and growth trajectories. These regions, products, and sectors collectively highlight significant opportunities and demand in the SME lending landscape.
Briefly describe the most impactful improvements that have been made for SME customers during appraisal, onboarding, and ongoing servicing.
The most impactful improvement that we have made is reducing the friction points for customers dropping out of the loan journey. Our onboarding is simplified and completely digital, with products like small-ticket loans and invoice financing that can be completed in just 2–3 steps. We have addressed the main issues in appraisal like complicated customer documentation processes by implementing the AA framework and using transactional data. We have also taken further steps in keeping in the customer informed with regular updates and payment reminders to make them habituated to paying on time.
Describe improvements made to reduce NPAs of SME borrowers and improve recovery from defaulters.
We pride ourselves on our innovative approach to lending, powered by our cutting-edge tech platform, LTFLoW. This platform enables us to deliver a seamless and fully digital anchor-based lending experience. From the very first interaction with digital onboarding, where customers can easily submit their information and documents online, to the integration of embedded finance solutions that seamlessly embed financial services into our customers’ digital experiences, we prioritize convenience and accessibility.
Our robust technology stack plays a pivotal role in ensuring the security and efficiency of every transaction. We have implemented advanced frameworks (such as AA) which fortifies our systems against potential threats and also enhances operational efficiency. Compliance is a cornerstone of our operations, facilitated by technologies like eStamping, which ensures the legal validity of our agreements and transactions.
Who are your key technology and fintech partners in SME lending?
To further enhance customer trust and streamline processes, we employ state-of-the-art identity verification methods. This includes leveraging PAN and Aadhaar validation services through partners like Perfios and NPCI. These services also contribute to a frictionless customer experience.
Our integrated approach goes beyond mere transactional efficiency; it aims to elevate customer satisfaction by meeting the evolving demands of the digital age. Our secure, efficient, and user-friendly lending process, tailored to modern digital expectations, empowers businesses and individuals to achieve their financial goals with confidence.
Briefly describe in-house developed applications for SME lending, and how they have been modernized in terms of functionality, technology, data sources, etc.
With our tech stack, we have developed an in-house application for our SME borrowers. Our tech can instantly update the credit lines using real-time transactional data. It allows efficient usage of the credit line and maintains access to credit at all times. In invoice financing, we offer the functionality of repayment, based on the uploaded invoices as per the SME borrowers’ convenience to allow repayment flexibility, unlike following the traditional FiFo approach. The repayment is also supported by various modes of digital payment in the application.
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