Fintech NBFCs bridging the gap through digital lending

Rakesh Kaul

In India, the MSME sector still sees the demand-supply gap leaving a significant mass underserved. While the sector is progressing quickly, the gap is largely attributed to inadequate paperwork and creditworthiness to qualify for financing from traditional lenders, shared Rakesh Kaul, Chief Executive Officer, Clix Capital, in an exclusive interaction with Srajan Agarwal of Elets News Network (ENN).

In the backdrop of the MSME sector’s pivotal role in India’s economy, how does Clix Capital specifically tailor its digital lending solutions to address the unique challenges faced by entrepreneurs, especially focusing on the diverse needs of women-led MSMEs?

Clix Capital strongly supports India’s crucial yet underserved small and medium-sized enterprises (MSMEs) sector. Recognising their unwavering spirit and undeniable contribution to the nation’s economic health, we prioritise creating innovative financial solutions that cater to unique and dynamic needs. This includes tailoring our lending services in terms of loan amount and repayment terms.

Clix Capital leverages advanced scoring systems and end-to-end digital credit underwriting capability to streamline the loan sanctioning process and significantly reduce turnaround time. This enables us to provide customised solutions to our customers and allows them to access credit in a seamless and timely manner easily. Whether providing working capital to maintain operations, financing essential expansions, or facilitating renovations to improve facilities, Clix Capital is committed to providing the required lending solutions.

We firmly believe women entrepreneurs will shape India’s next great growth story. A phenomenal rise has been witnessed in women’s entrepreneurship, from heading small businesses to leading high-growth startups. However, access to finance had traditionally not been as easy as expected as women-led businesses used to be perceived as culturally uncommon, coupled with issues related to a lack of documents and a streamlined flow of income.

At Clix Capital, we are fostering a supportive ecosystem by providing them with a stress-free onboarding experience and offering affordable interest rates with curated terms to change this fallacy.

The credit gap for MSMEs in India is staggering, with a substantial portion remaining unmet through traditional channels. Could you elaborate on how digital lending is bridging this gap and contributing to the economic empowerment of MSMEs in the country?

In India, the MSME sector still sees the demandsupply gap leaving a significant mass underserved. While the sector is progressing quickly, the gap is largely attributed to inadequate paperwork and creditworthiness to qualify for financing from traditional banks and institutions. On the other hand, despite having a large base, traditional institutions face their own challenges, which creates opportunities for Fintech NBFCs to bridge this gap through digital lending.

With our ‘phygital’ presence across 2000+ Indian pin codes, we extend our support to thriving businesses in Bharat beyond tier-1 & tier2 cities. With the combination of tech & assisted business model, Clix Capital has been successfully empowering the aspirations of these business owners who otherwise are largely underserved.

Faster approvals, simplified documentation, and easy accessibility make this model unique, and it enables our customers to stay focused on their ambition to expand businesses stress-free.

Leveraging alternative data sources is a key aspect of digital lending. How does Clix Capital balance the use of innovative data evaluation methods with ensuring data privacy and security for its customers, and what measures are in place to maintain customer trust in the digital lending process?

At Clix Capital, we understand the importance of earning and maintaining our customers’ trust. This includes safeguarding their personal information and ensuring complete data security, for which we utilise state-of-the-art security infosec tools and a multi-layered approach to adhere to digital lending guidelines, all applicable data privacy regulations set by RBI and other relevant bodies, and to go beyond industry standards.

Advanced endpoint protection and behavioral analytics systems are employed to detect and prevent cyber threats. Constant awareness campaigns are organized to educate customers about the importance of data privacy and offer tips for protecting personal information in the digital world. Yet another strategy is our collaboration with fintech companies that specialise in secure data analysis and processing to bring in expertise and advanced technologies specifically designed to handle large sets of alternative data securely.

Finally, regular assessments of privacy and security practices are conducted to identify any vulnerabilities in light of emerging threats. By investing in periodic audits and assessments, we recognise the rapid need to upgrade to new and modern technologies to further strengthen data protection measures.

The ‘Yubi Co.lend Platform’ is a notable initiative in Clix Capital’s strategy. How does this platform enhance the overall digital lending experience for MSMEs, and what role do you foresee technology playing in shaping the future landscape of digital lending for businesses in India?

The Yubi Co.lend Platform acts as a collaborative interface between Clix Capital and co-lending partners. The optimised cost of funds, end-to-end digital capabilities, enhanced physical presence and expertise in providing credit with comprehensive due diligence deliver seamless finance solutions in an accessible and cost-effective digital format, allowing both parties to draw on each other’s capabilities to help the underserved.

Also Read | Tech-Enabled NBFCs Empowering MSMEs with Supply Chain Financing Solutions

Digital lending, powered by AI-based Credit Scoring fosters fairer access to loans for businesses that traditional methods might have previously excluded. AI can analyse alternative data sources, providing a more accurate picture of an MSME’s creditworthiness and enabling it to leverage modern lending solutions to meet its growing ambition.

By leveraging big data, deeper insights are gained to tailor services and automated decisionmaking engines that are agile to reduce turnaround times, and provide faster loan approvals significantly.

It fosters a more inclusive financial ecosystem that directly contributes to India’s GDP and employment growth.

Can you elaborate on the ‘Har Jazbe Ke Liye’ Campaign launched recently as it salutes the determination of the Indian MSME Community?

Har Jazbe Ke Liye’ is a marketing campaign and a recognition of our MSMEs, doctors, and school owners’ tireless efforts to create a larger impact beyond profits. It acknowledges its pivotal contribution by maximising employment opportunities and providing quality healthcare and education facilities to every deserving citizen of the society. It is also a testimony to the fact that all they need is timely access to credit.

The campaign spans a series of three digital films beautifully crafting the real-life stories of our select customers: a woman entrepreneur based in Maharashtra who scales up a manufacturing plant of sanitary pads and provides employment to a lot of women carrying the same grit and passion; a doctor who had all the opportunities and comfort of working in a big town but chose to serve the people of his hometown with modern medical care. And a small-town school owner who has a sheer determination to provide digital literacy to all the girls of his school by setting up a new computer lab. He fuels the growing aspirations of his students and contributes to the ‘beti padhao, beti bachao’ mission.

We aim to make a real difference in the lives of countless MSMEs with ‘Jazba’ to create an impact.

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