Reimagining Lending to SMEs FlexiLoans has built a platform that provides capital to tail end customers in a 100% digital format in less than three days and with minimal documentation while leveraging alternate data.

FlexiLoans was started in 2016 with an endeavour to solve the problem that SMEs face in accessing quick, flexible & adequate funds for growing their businesses using digital and alternate datapoints. "There are 70mn+ MSMEs in India which contribute 29% to the GDP of the country. However, access to finance for these MSMEs has been limited due to lack of digital data, lack of assets, and transparency for financial institutions to provide access. The top 5% have access to finance through PSU banks and large NBFCs, but the tail-end customers do not have that access," says Deepak Jain, Co-founder, Flexiloans.

The four-year-old startup has built a platform that provides capital to these tail end customers in a 100% digital format in less than three days and with minimal documentation while leveraging alternate data. The technology platform at FlexiLoans is built inhouse and is designed to be the platform to enable lending for any lending ecosystem.

So, what's the secret sauce of FlexiLoans? "Our secret sauce is our risk models which are trained over millions of records to accurately risk price the unsecured MSME loans in India. We have built advanced algorithms to train our risk models and keep them updated with latest macros and micro trends. We also have built advanced set of APIs which allow us to deeply embed into partner ecosystems to provide lending solutions to SMEs on these platforms," says Jain.

Regarding stepping up efforts to retain customers, Jain tells. "Of the total $300bn, captured market is barely $2bn by all fintechs combined. Therefore competition is not a constraint. The larger problem that we need to solve is how do we reach and sustainably lend to customers in the remaining $298 bn market. We try to make sure that every customer we onboard on our platform is given the right kind of credit to help his/her business grow."

The startup has been profitable at a relatively early AUM compared to its peers due to its high operating leverage built on a frugal business model.

According to Jain, regulations in our industry are a must since lending is a very sensitive sector. "The RBI has been a very supportive and understanding of the needs of the emerging fintech business models and has kept pace with developments. In fact, Indian regulations are one of the most mature globally and we expect the RBI to keep heralding the Indian fintech sector as a shining light to regulators globally."

Jain believes perseverance and grit is the foundational trait required for entrepreneurs. "As a group we have gone through multiple economic troughs in the form of GST, demonetisation, ILFS crisis and Covid and what we learnt from these was perseverance and grit albeit in time bear the sweetest fruits."

"We don't believe that growing at breakneck speed in a lending business is very wise. We've been very calculated in our risk / growth tradeoff strategy and will continue to do so," Jain adds.

The next target of FlexiLoans is to cross INR 10,000 crore in AUM by 2025, and be amongst the top 5 pure play SME lending institutions in the country.

Factsheet