Vera Loans

SMALL LOANS AT SCALE MADE EASY

Summary:

Problem Statement: Almost 90 percent of small businesses in India still have no links with formal financial institutions.

 Primary reasons are 
      for borrowers - borrowers do not have 
                       adequate tools for consent managemen 
                       and networks infrastrucure to promote financial inclusion
      
      for lenders  - lenders do not have 
                      easy ways to access borrowing capacity leading to high defaults and NPAs
                      validate small business workflow and cashflow needs and their veracity on adequate amounts AT THE TIME OF NEED
                      adaptive decision making tools to quickly respond to macro economic events

Research:

      Loans to  micro and small businesses shrinking even through 2020. Banks have started to reduce working capital limits, increase risk premium — 
      thereby charging effective interest of over 16% — and insist on additional security when these SMEs are not even generating positive EBITDA
      
      Even with Priority Sector Lending guidelines, most retail banks have not been able to extend credit as the NPA rates are high.
      
      Even Government loan schemes are finding it difficult to disburse credit to low ticket borrowers, a key for recovery in India.

Reasons:

      Low Credit Literacy, Awareness and ease of use and convenience tools for accessing credit. 

      The loan application process is daunting. Most business owners resort to informal lending. Data Privacy and user preferences are not a priority.

      Rigid and outdated methods for underwriting. Banks need to focus on repayment capacity at the appraisal stage and monitor the loans through the lifecycle           much more closely – RBI Deputy Governor. 

      High Loan originating , processing and maintenance costs for Lenders, due to non-standard and often archaic integrations.

Solution:

      Loan services platform (AA Client) leveraging  Account Aggregator Framework initiated in India, with the following enablers

Technical

      Accessibility tool to reach masses at scale via feature phones soliciting explicit consent

      Privacy-first designs to promote data for the purpose of intended based on fields of interest and tiering configurations

      A curation platform to vet operational aspects of the borrowers business and signal risks beyond historic numbers based on event oracles.

      An Adaptive mechanism to weigh Asset Based and Flow based lending and  gradually move towards flow-based lending, according to macro-economic situations 

Operational

      Operational framework in the platform to increase inclusivity.

      Actor-preference based incentives to promote AA adoption.

Screenshot:

USSD

Teams

• Devansh Swarup

  Next Tech Lab

• Dhruv Upadhyay

  Next Tech Lab

• Shobit Puri

  Next Tech Lab

• Aryan Pandey

  Next Tech Lab

• Sathya Krishansamy