Tech-Driven NBFCs Reshaping India’s Financial Landscape

Aditya Damani

Business operations encompass two essential aspects: the demand for funds, where loans are disbursed to individuals in need, and the supply of funds, which necessitates strategic alliances, shared Aditya Damani, Chief Executive Officer & Founder, Credit Fair, in an exclusive interaction with Kaanchi Chawla of Elets News Network (ENN).

Please take us through the remarkable journey of your company in pioneering solar rooftop financing. How does this align with your vision for the future, particularly in the context of advancing renewable energy adoption?

Our aim has always been to foster equitable finance and cultivate a fair financial landscape for all Indians, a mission we’ve pursued for the past five years. Since our inception, we’ve allocated over a hundred million dollars and positively influenced the lives of nearly 60,000 Indians. Our focus on solar and green energy aligns perfectly with our vision. Not only does it contribute to environmental enhancement, but it also provides substantial savings on electricity bills for consumers.

With finance being a critical factor in addressing this challenge, we find ourselves well-positioned to facilitate this transition. Already, we’ve assisted over 4,000 customers in adopting rooftop solar solutions. Our goal is to solarise approximately 20,000 homes within the next year, representing a fivefold increase. This ambitious endeavor aims to collectively save our customers at least 10 crores monthly on electricity bills. These are the strategic initiatives we are pursuing to maximise our impact and propel sustainable change.

With the advent of alternate lending platforms such as peer-to-peer (P2P) lending gaining traction, could you elaborate on the sector’s growth trajectory? Also, how do you perceive the role of Credit Fair and similar entities in shaping the landscape of alternative lending in India?

I believe the realm of alternative lending and wealth, particularly alternative fixed-income products, is poised for exponential growth over the next 5-10 years. Credit Fair aims to be a frontrunner in this surge, striving to establish itself as one of the leading players in this domain. Traditionally, one of the challenges with P2P lending has been that retail investors, those investing sums ranging from as little as 10,000 up to 50 lakh rupees, often lack the expertise to discern the right borrowers. Initially, platforms struggled to select suitable borrowers, posing risks for these investors accurately. However, it’s encouraging to witness a shift in this landscape.

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The industry is evolving, with greater emphasis on lending quality. At Credit Fair, we pride ourselves on being among the safest options in lending. We focus solely on lending for specific, purpose-driven use cases to save money or increase earnings. This approach ensures both the security of the loan and a positive impact for the borrower while also delivering favorable returns for the lender. We see our role as that of a curator and manager on behalf of retail investors, ensuring their interests are safeguarded.

We maintain the same rigorous deployment of funds as we do within our own NBFC, underscoring our commitment to the integrity of our platform. With our vested interest and proven track record, we aim to be recognised as the most trusted and secure platform, whether in the realm of alternative lending or peer-topeer lending.

Fintech companies have been on the rise, revolutionising the financial sector with innovative technological solutions. How do you believe these new-age NBFCs like Credit Fair are bridging the credit gap in India? Could you provide insights into the specific strategies and initiatives being undertaken to address this challenge?

My inspiration stems from a desire to assist more Indians in ascending the credit ladder, a term I use to describe the process of building and improving one’s credit score. Your credit score is a pivotal asset for obtaining loans such as a home or car loan and making various expenses more manageable. At Credit Fair, we maintain an adaptable credit policy. We’ve supported tens of thousands of borrowers who initially lacked a credit history. By placing our trust in them and extending loans, they’ve honored their commitments, significantly improving their credit scores. Consequently, they now have access to credit from multiple sources.

Our aim is to continue facilitating this journey. For instance, in the realm of upskilling education, consider a student who has completed an engineering course and now wishes to pursue a data science or coding course to enhance their employability. Credit Fair steps in to provide assistance. Whether it’s a farmer’s child or someone with limited financial resources but immense potential, we ensure that finance isn’t a barrier to accessing education and opportunities for advancement. Our goal is to empower individuals like these to realise their aspirations without hindrance.

Could you shed some light on the key partnerships and collaborations that Credit Fair has forged to enhance its market presence and expand its offerings? How do these strategic alliances contribute to achieving your company’s overarching goals and objectives?

Business operations encompass two essential aspects: the demand for funds, where loans are disbursed to individuals in need, and the supply of funds, which necessitates strategic alliances. Generating revenue isn’t as simple as conjuring it out of thin air. Thus, we’ve cultivated partnerships on both fronts to propel business growth.

On the disbursement side, particularly in the realm of demand for funds and Rooftop Solar, we’ve forged key partnerships, including Tata Solar, Solar Square, Redington, N Phase, and M plus. These alliances with top solar manufacturers and installers have facilitated our expansion. Additionally, we’ve established a network of over 700 regional installers, enabling us to solarise approximately one home every hour. Our goal is to elevate this rate to around 10 homes per hour in the future.

Similarly, we’ve cultivated partnerships with banks such as SBI, IDFC, and AU Small Finance Bank on the supply side of funds. Additionally, collaborations with entities like Avanse Financials, Aditya Birla Finance, and U GRO Capital, etc, reflects our commitment to securing diverse funding sources. Our robust underwriting and collections capabilities have attracted numerous lenders seeking to partner with us. We aim to consistently scale our operations through these partnerships, targeting a 2-3x growth trajectory annually.

As someone deeply entrenched in the financial services landscape, what are your overarching views on the sector’s future direction? How do you foresee the evolving regulatory environment, technological advancements, and consumer preferences shaping the trajectory of NBFCs like Credit Fair in the years to come?

We are a digitally oriented NBFC, established in 2018 without any physical branches. We’ve developed our own suite of technology solutions, including a loan origination system, loan management system, mobile apps, and credit tool engine. Our firm conviction lies in the belief that technology is indispensable for creating a sustainable and scalable impact.

Technology plays a pivotal role in various aspects of our operations. Our systems seamlessly integrate with partner systems for customer acquisition, simplifying their workflow. With just a click, partners can determine loan eligibility within minutes, facilitating swift decision-making for both customers and sales teams.

From loan origination to underwriting, our automated systems operate without human intervention, ensuring efficiency and accuracy. Processes such as KYC verification, onboarding, and compliance maintenance are all digitised, streamlining the entire lifecycle. This digital approach significantly reduces costs, making our operations 30 to 50% cheaper compared to traditional NBFCs.

Our commitment to leveraging technology underscores our vision for sustainable scalability. We remain dedicated to ongoing investments in technological advancements, aiming to achieve a tenfold growth over the next three years.

As the CEO of Credit Fair, what do you envision for the future of NBFCs in India, particularly in fostering innovation and adapting to changing market dynamics? How do you see Credit Fair leading the charge in this evolving landscape?

I believe that NBFCs are integral to addressing the credit gap and surplus savings in India alongside banks. As such, each NBFC must carve out a leadership position within its specific niche and maintain a technological edge to effectively manage the cost of funds, which ultimately constitutes the most significant expense.

For Credit Fair, our focus lies on climate finance and impact lending, with a particular emphasis on becoming a leader in rooftop solar financing. Additionally, we are committed to expanding into other impact-driven sectors such as upskilling education and healthcare. Over the next five years, we aspire to establish a $1 million EU presence.

Also Read | NBFCs Powering – India’s Economic Growth

Regarding technology, we are dedicated to offering best-in-class solutions tailored to the solar ecosystem. This includes seamless integrations with partners and ongoing support for customers to maximise the value of their solar assets over the long term. Building trust and fostering lasting relationships with customers even after the loan term concludes is a key objective.

In terms of funding, we are exploring various avenues, such as impact funds like green bonds and engaging with retail investors through peerto-peer lending and NCDs. Our goal is to secure the most cost-effective funding sources within our niche to ensure sustainable growth and leadership within the industry.

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