While leveraging technology, U GRO Capital is investing in ML algorithms for extracting meaningful insights for underwriting:
U GRO Capital’s founding philosophy is to solve MSME credit gap in India by applying data science and technology to develop a scalable and templatised scorecard to gravitate collateral based MSME lending to on tap financing. Its management team believed that the shift in technology infrastructure would play a pivotal role in changing the MSME lending landscape in India. In line with its founding philosophy, U GRO Capital was formed with a differentiated sectoral approach toward MSME underwriting. Shachindra Nath, Vice Chairman & Managing Director, U GRO Capital, points out: “True to our belief we today witness the likes of OCEN framework and Account Aggregator network supporting new age business models. We developed AI / ML driven proprietary scoring model GRO Score.”
Tech Prowess Drives Product
Historically U GRO Capital was the first lender to go live on GeM Sahay platform, which enabled purchase order-based funding to MSMEs on the government e-marketplace. Based on the company’s market analysis,
U GRO Capital has introduced unsecured loans to self-employed professionals i.e. doctors. This is a continuation of its sectoral lending approach, where healthcare is one of its chosen sectors and this unsecured product carries a longer tenor of up to 60 months as opposed to 36 months for other unsecured products.
In continuation of its existing small ticket size secured loans, the company has launched Sahayog, which offers loans against specific types of properties in areas where the company has existing presence.
Nath explains: “We leverage our strong underwriting framework (GRO Score) to increase touchpoints and maximise our MSME reach through multiple curated MSME funding programs. GRO Score enables under 60 mins initial credit decisioning and improves TAT for us. Leveraging our data and tech prowess, we have been able to launch unsecured small business loans, which is a continuation of our existing small business loan product, albeit with a lower ticket size (up to Rs1 mn as compared to up to Rs2.5 mn for existing product).”
Data Analytics, Tech, LaaS
U GRO Capital has evolved as a data – technology company within 3 years of inception, as it is leveraging data analytics and technology in varied operational aspects including origination, underwriting, portfolio monitoring for early warning signals and collections. This approach has helped the company achieve a rapid and sustained growth. It has devised its proprietary scoring model (GRO Score), matching banking and bureau scorecards to generate one single score, which further gets augmented with GST data as an external input.
U GRO has also been an active participant in the country’s co-lending ecosystem, having signed 10+ co-lending partnerships with distinctive financial institutions, including SBI, Bank of Baroda, ICICI Bank and IDBI Bank. Nath elaborates: “Our multi-channel distribution platform and co-lending orientation have enabled us to be India’s first fully data driven Lending as a Service (LaaS) company. This has allowed us to enhance our reach in MSME financing. The advance utility of data and technology has allowed us to attain high operational efficiency as well as quality credit disbursal. Our GRO Score has successfully processed more than 21,000 applications, over 67,000 bureau records, over 45,000 bank statements and more than 14,500 GST records in the last one year.”
Machine learning algorithms, involved in the underwriting, allow the company to synthesize large volume of information to draw meaningful insights from unorganized data. The in-house business rule engine enables faster rollout of newer models. “We will continue to put innovation at the very centre of our strategies, to introduce distinctive initiatives and offer effective credit solutions to the MSMEs,” avers Nath.
GRO X Application
U GRO Capital has enhanced digitization across the entire customer journey and touchpoints by introducing / enhancing E-Sign Application, E-Agreement, E-Nach and IMDS. It has also introduced WhatsApp customer bot to assist customers with their queries. The company also strives to continually improve its data and technology capabilities. The company will upgrade its underwriting model with the adoption of GRO Score 3.0, which will combine the power of bureau, banking and GST data to derive power insights.
Nath reveals IT related plans: “For our direct digital channel, we have devised GRO X application (to be launched shortly) to provide an industry first product offering – a revolving credit line for all eligible MSMEs through a purely app-based journey. It would enable customers to utilize their sanctioned credit limit through multiple payment channels such as UPI and bank transfers. It would also enable them to present a QR code for receiving payments from their customers, which will be directly in lieu of repayment of the facility.”
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