IF I WALK ON THE ROAD, all the small entrepreneurs on my left and right are our potential customers,” says Mohit Sahney, whose Rajasthan-based non-banking finance company (NBFC) Finova Capital caters only to the financially underserved people such as tea sellers, tailors and hairdressers. Sahney started the business four years ago, after leaving his decade-old job at private sector ICICI Bank. Similarly, Mumbai-based UGRO Capital, founded by industry veteran Sachindra Nath, specialises in financing select sectors in the SME space. UGRO is also innovating on the distribution front with multiple co-lending models, including what it calls “uberisation” of intermediation. Another new-age NBFC, CredAble, is bridging the credit gap in supply chain financing for MSMEs, as traditional banks and NBFCs serve only the creamy layer of suppliers and distributors. “On a two-month basis, there is a ₹1 lakh crore working capital credit gap in India. Our mission is to triple the working capital available in India over the next five years,” says Nirav Choksi, Co-founder and CEO, CredAble.
Sahney, Nath and Choksi are among the hundreds of finance and technology professionals who are transforming the credit space with their innovative solutions and products. These new-age NBFCs or fintechs are rewriting the rules of the lending business by boarding new sets of customers, out-of-the-box risk assessment tools, tapping newer/smaller geographies and partnering with banks and traditional NBFCs for co-lending.
A recent PWC report says such NBFCs are reshaping the entire lending value chain from customer acquisition and credit scoring to loan servicing and recovery.
Let’s look at their business models.
Geographical Proof of Concept
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