Lendingkart First to Launch Co-Lending Scheme In Partnership With Banks Post RBI's Revised Guidelines
Lendingkart has launched a co-lending software-as-a-service (SaaS) platform Lendingkart 2ghtr, for banks and non-banking financial institutions (NBFCs)
Fintech lender Lendingkart has launched a co-lending software-as-a-service (SaaS) platform Lendingkart 2gthr, for banks and non-banking financial institutions (NBFCs).
The platform will help partner financial institutions fasten their loan application and disbursal process by digitising it end-to-end. It aims to reduce the traditional loan processing time of about one month to less than two weeks for partner banks.
Further, the platform will collaborate with the partner bank or NBFC to jointly lend to borrowers based on a prior agreement.
“Under this arrangement, we will co-lend in say, 20-80 or 30-70 proportion of the total amount,” said Manish Bhatia, President - technology, analytics and capabilities, Lendingkart, during an interaction with Entrepreneur India.
The launch of Lendingkart 2gthr comes less than a week after the Reserve Bank of India (RBI) revised guidelines for banks and NBFCs to jointly lend to the priority sector, which includes MSMEs, to improve the credit flow to the underserved sectors.
The co-lending model provides better operational flexibility and wider reach to banks.
Bhatia said Lendingkart’s tech platform will enable financial institutions to extend their reach to remote areas where the latter typically do not have a physical presence.
“Through this platform, banks and NBFCs will be able to extend their reach to last mile MSMEs by leveraging Lendingkart’s omni-channel, digital ecosystem that the company has created over the years,” he said.
The platform also acts as a loan marketplace as it uses its matching algorithms to find the right match between the borrowers and lending institutions basis the former’s available information and the latter’s requirements, said Bhatia.
Lendingkart 2gthr also comes with a suit of digital solutions, such as e-KYC, e-sign, e-nach, and is powered with tools like Optical Character Recognition (OCR) and fraud triggers that can help improve business efficiencies of the partner financial institutions.
The tech-enabled platform also cost-efficient for partner institutions. “Since borrower discovery to loan disbursal is completely digital, banks get to save costs on each loan,” said Bhatia. “More importantly, our gainful credit underwriting will help them to keep their NPAs (non-performing assets) under control, which is also indirect cost-saving.”
“It (Lendingkart 2gthr) addresses all the requirements of banks and NBFCs that are precursors for them to diversify in the MSME segment and provide an all-inclusive one stop solution from origination, underwriting, loan delivery, servicing, monitoring portfolio performance and insights with recommendations, leveraging Lendingkart’s self-learning underwriting model,” said Harshvardhan Lunia, co-founder and MD, Lendingkart Technologies.
To begin with, the fintech lender has tied up with four to five banks and NBFCs.
On being asked how the bank’s response has been on adopting tech for credit assessment considering they traditionally rely on credit history and collaterals for lending, Bhatia said Covid-19 has made tech adoption a necessity.
“We assess alternate data, such as bank statement and GST data instead of just relying on the borrower’s CIBIL score and our algorithm works on about 5,000 data points for credit underwriting. This model has resulted in a strong portfolio performance and we now want to now extend this technology to banks.”
For NBFCs, co-lending scheme is a good way to grow its retail loan segment. Moreover, given the lower cost of funds from banks, the borrower will be able to get relatively cheaper loans.