How is Usha Financials adapting to growth opportunities & competition? CEO Geeta Goswami reveals several transformations that have happened within:
Ravi Lalwani: What has been the business growth in SME lending of the company over the last 3 years?
Geeta Goswami: Since its inception in 2016, Usha Financial has grown significantly, particularly in the SME lending sector. By March 2022, despite the challenges posed by covid-19, our loan book size had reached Rs1.5 bn. Post-covid, we adopted an aggressive lending strategy, focusing on the SME category, which has contributed to the company’s expansion. Today, we have surpassed AUM of Rs3 bn, demonstrating our commitment to supporting the growth of small and medium enterprises through accessible financing solutions.
Please share the top 3 regions, top 3 products, and top 3 industry sectors.
Top 3 regions: Our business has seen the most significant growth in Delhi, West Rajasthan, and Maharashtra, where demand for our financing solutions continues to rise.
Top 3 products: Our key offerings include MSME, SME loans, and green financing, particularly for sustainable projects and electric vehicles.
Top 3 industry sectors: While we have a strong presence in financial services, SMEs, and renewable energy sectors, we also cater to a wide range of industries, including agriculture, electric rickshaw financing, loan against property (LAP), and consumer finance. This diversity enables us to meet the unique financial needs of various borrowers.
Briefly describe the most impactful improvements that have been made for SME customers during appraisal, onboarding, and ongoing servicing.
We have introduced several key improvements to enhance the experience for our SME customers across all stages of their journey with us. During appraisal, we have refined our risk assessment procedures to offer quicker and more accurate evaluations, ensuring faster loan approvals. For onboarding, we’ve simplified the documentation process, making it more user-friendly and efficient for SMEs to access funds. In terms of ongoing servicing, we’ve implemented proactive communication channels and personalized support, ensuring that customers can easily manage their loans and receive assistance whenever needed.
Briefly describe improvements made to reduce NPAs of SME borrowers and improve recovery from defaulters.
To reduce NPAs among SME borrowers, we have adopted a more cautious and thorough approach to our underwriting process, ensuring that we assess customer profiles with greater accuracy. We have also enhanced our field visits, allowing us to better evaluate borrowers’ businesses and mitigate risks. In cases of default, we take a multi-faceted approach by employing legal measures, consistent follow-ups, and, where necessary, repossession of vehicles. These steps have significantly improved recovery rates and strengthened our overall portfolio management.
Who are your key technology and fintech partners in SME lending? What solutions have they provided to your company?
We have looked into potential partnerships; however, our main strength is our strong internal systems. These systems are designed specifically to support our SME lending operations by streamlining processes like loan origination, underwriting, and risk management. This in-house capability enables us to maintain efficiency and reliability in our financial services.
What technology do you use for SME lending, and how has it been modernized?
We have created a comprehensive internal technology framework for our SME lending operations. This system modernizes essential functions such as loan origination, underwriting, and risk management, making the entire process smoother and more efficient. By leveraging data-driven insights and advanced features, we ensure that our solutions meet the specific needs of SMEs. Our in-house technology allows us to provide a seamless experience with customized financing options for our clients.
Key advancements include integrating data-driven decision-making tools and improved automation, which enable us to process loan applications more quickly and accurately. We utilize multiple data sources, including financial statements, credit history, and alternative data, to assess borrower profiles more comprehensively. Our systems are designed to be scalable and adaptable, allowing us to continuously improve functionality and meet the evolving needs of our SME clients. This modernization enables us to offer customized financing solutions while providing a seamless and reliable service experience.
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