FinTechs reinventing MSMEs in India

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In the FinTech India Trends Report 2017, PwC revealed that India offers the highest expected return on investment on FinTech projects at 29 percent versus a global average of 20 percent.

SysArc InfomatixWith a booming FinTech sector and a plethora of banking services, India is soon to see a tech-driven financial industry. Micro Small and Medium Enterprises (MSMEs) have become the backbone of our country by providing employment opportunities to over 11 crore people.

This sector is the second biggest contributor to the GDP of India and is considered to be a strong growth catalyst. The Government of India has rolled out various schemes through banks to provide better financial support for the growth of the MSME sector, but timely financing is crucial. Insufficient capital is a common barrier to any small business organisation’s development. Silicon India has stated that tedious loan procedures, huge paperwork, long disbursal periods, collateral requirement and high-interest rates are some of the factors that make banks a difficult option MSME loans in India.

 The FinTech sector can resolve many of these issues by bringing together qualified borrowers and bona fide lenders on a secure platform. According to Sundar Garg, CEO – SysArc Infomatix, “A growing demand for digital banking services is a great opportunity for FinTech companies to develop innovative solutions for financial institutions that will help enhance customer experience.”

Startup online lending marketplaces, such as SysArc’s soon-to-be-launched LENDINGwala, aims at providing secure financial support to MSMEs with quicker loans from qualified lenders and assisting banks in identifying creditworthy borrowers. FinTech companies like SysArc Infomatix, empowered with over 20 years of expertise in the fields of finance and technology, understand the various difficulties involved in applying for MSME loans.

 “With an in-depth understanding on issues faced by both lenders and borrowers, developing an exclusive marketplace lending platform could prove significant to priority sector lending” expressed Garg when asked upon the purpose behind the idea of LENDINGwala. MSMEs play a vital role in any country’s economic stability.

The Reserve Bank of India (RBI) closely monitors banks’ MSME lending target achievements on a quarterly basis to ensure adequate flow of credit in the sector. Many leading banks’ extensive process is less captivating and more time to consume for the busy diligent MSME owners.

 Platforms like LENDINGwala simplify the entire process without compromising on the robust eligibility check on borrowers. Marketplace lenders, apart from interfacing with credit agencies, adopt alternative data sources and credit scoring techniques to determine the borrower’s eligibility. With a seamless integration with third-party interfaces, the system captures all necessary financial data of the organisation to conduct an extensive financial modelling and analysis process.

This helps lenders have a better understanding over the small business organisation’s creditworthiness. LENDINGwala also utilises a robust in-built risk rating engine to evaluate their applicants. Further, the platform displays an array of lenders for the applicant to choose based on the loan packages provided. “The status and movement of the loan application can be viewed online by the MSME borrower to keep track of their credit request”, adds Sundar while explaining about LENDINGwala. SysArc is determined to find ways to simplify lending and introduce new financial products to strategically attract new customers. Sundar adds, “we not only focus on offering credit to borrowers but also in enhancing customer experience through constant technological innovations.”

We are moving into an era of Marketplace Lending, which has got the immense potential to move banks from traditional to a more progressive way of lending.

(Sundar Garg, President and CEO, SysArc Infomatix, holds extensive experience in some of the world’s largest organisations including KPMG Peat Marwick, Deloitte Consulting Group and Unisys. His vision has made the company continuously successful even during the recessionary period.)

(Views expressed in this article are a personal opinion of Sundar Garg, President and CEO, SysArc Infomatix.)

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