Richest NBFC startup in India’s $ 300 billion SME loan market

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FlexiLoans was founded in April 2016, receives over 3000 applications and disburses around 20 crore each month.

It rose to prominence as the startup with the highest seed funding round ever when it raised 100 crore from high profile investors including KKR India CEO Sanjay Nayar; former CIO of HDFC Bank, Anil Jaggia and former head of operations and technology at Citibank, Vikram Sud.

Flexiloans.com was launched in April 2016 by Abhishek Kothari, Deepak Jain, Manish Lunia and Ritesh Jain 4 ISB group partners, class of 2009. They solve the problem of social loans based on “Jaan-Pehchaan” in the SME segment.

The startup receives more than 3,000 applications and pays around 20 crore each month. Manish Lunia, co-founder of FLexiloans.com, explains how they plan to disburse even more loans in more cities, to more SMEs with faster approval times thanks to the use of technology.

How many loans have been processed so far and what is the value of the disbursed loans?

We have digitally processed over 10,000 requests to date with an average ticket size of 5 lakh rupees. We are too early in our journey to discuss the size of the book.

What is the interest rate on the platform? How is the rate decided?

Interest rates on our platform start at 15% pa and depend on factors set by our credit algorithms based on risk and business parameters

How does FlexiLoan generate income?

We have two main sources of income. One is the loan processing fees we generate for all loans issued on our platform and the other is the interest income our NBFC generates for disbursed loans.

How does FlexiLoan check a borrower’s creditworthiness?

FlexiLoans uses a large base of financial, demographic, social, psychological, and surrogate loan history and product quality information to assess a borrower’s overall creditworthiness. Much of this information is sought from independent sources.

How does FlexiLoan deal with radiation?

We follow standard policy-based processes followed by NBFCs for provisioning loans. We have deployed strong early warning systems and legal mechanisms to deal with delinquency cases.

Tell us about your recent acquisition of CreditPeriod.com. Are you looking to acquire more?

The acquisition of CreditPeriod.com was made to strengthen our position in supply chain finance for the SME ecosystem which is still in its early adoption phase. The acquisition is a critical part of our exercise to digitize end-to-end supply chain finance for SMEs.

We will continue to acquire companies that can accelerate our time-to-market plans by providing scalable technologies as well as the right talent to join us.

With large e-wallets and traditional banks also moving into online lending, how will FlexiLoan work in the future?

FlexiLoans currently addresses the need to get loans quickly (we approve loans within 48 hours), hassle-free (we strive for less documentation) and from anywhere the borrower may be based in India. The country has more than 50 million SMEs and they contribute about 45 percent to the national GDP, but no more than 10 percent are served by traditional banks to date. There is a huge opportunity of over $ 300 billion waiting to be served and FlexiLoans is creating a niche with its model that combines differentiated credit underwriting, efficient technological intellectual property and data science models.

We currently lend to SMEs in over 70 cities and our goal is to dramatically increase our distribution to over 500 cities with an average processing time of less than 24 hours.


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