Analytics route to small loan

Mumbai: KapitalTech, a lender of short-term loans to small units using data analytics and machine learning technology, is now set to enter the consumer finance segments. The two-year-old entity, which reached break-even-point in 8 months and is now profitable, has disbursed over Rs 600 crore to various MSMEs (medium and small enterprises).

It expects loans to jump to Rs 1800-2000 crore over the next 12 months, backed by growth not only in its core segment but also new products such as loans against property.

KapitalTech offers short-term unsecured business loans to MSMEs with a quick turnaround time, where the loan is disbursed within 24-48 hours. Its core product, a Rs 2-50 lakh loan, sometimes even Rs 75 lakh, caters to retail businesses, distributors, traders and the services industry.

KapitalTech has reported a strong asset quality with non-performing assets (NPAs) below one per cent of advances. The fintech firm conducts real-time appraisal of potential borrowers with Dexter, a proprietary statistical modeling and machine learning-based analytics engine.

Speaking to The Telegraph, Shaili Maheshwari, co-founder, KapitalTech, said apart from technology, a key focus area has been collections. The frequency of collection depends on the area of operations and in some cases such as a kirana store, its even done on a daily basis.

“We are one of the few fintech firms who have focussed on collections. We have aligned the repayment to the cash flows of the customer. We also follow a different underwriting methodology which allows us to qualify a lot more people than what the traditional banking system is able to do,” she added.

“We have built a lot of understating around the complexities of underwriting. Our expertise in underwriting was built as we progressed,” Vivek Raghavan, co-founder of the company, said.