Loan Frame wins Financial Express’ FE India’s Best Banks Award in the Fintech Category

Loan Frame, an online lending marketplace that advances loans to small and medium enterprises (SMEs), will be utilising Artificial Intelligence and Machine Learning to assess its customers better and faster, its Founder and CEO Shailesh Jacob tells Asmita Dey. Excerpts:

With just a single round of fund-raising so far, how do you ensure that lenders on your platform do not have to provide hefty-capital?

We are into technology-enabled products that fill critical financing gaps for small businesses that operate primarily in the ecosystem of larger companies. We partners with banks and NBFC’s and provide them services to efficiently originate, assess, and service smaller loans. While a single NBFC is restricted by its capital base, we partner with lenders with large pools of capital to deploy. Aligning our interests with those of our partners, we charge lenders only for the successful transactions, that too in the case of a performing loans.

How big is your SME customer base?

Only 10% of the over 60 million small business establishments have access to institutional credit at present. We think technology will play a very important part in bringing SME’s into the fold of formal lending. And we want to use technology to bridge this gap, enabling lenders provide low-cost, simple and fast loans to small business.

At Loan Frame, we do over 1000 SME funding transactions every month. And we have just got started, not having covered even % of the 60 million-and-growing SME vase in the country. We see this figure growing exponentially in the future.

What has been your growth trajectory so far?

Our transactions grew by more than 60x over the last year. While growing fast is important, in a business like this it is equally important to grow responsibly, originating high-quality loans with the right risk-reward profiles.

How do you plan to expand your business going forward?

In FY20, Loan Frame are looking to invest heavily in three key areas – customer experience technology, underwriting technology and geographic expansion. In customer experience technology, we want to provide better products and lending experiences to small businesses than are available at present. In underwriting technology, we plan to invest further in artificial intelligence and machine learning tools to assess our customers better and faster. We currently have customers in 30 cities across 14 Indian states. Over the next 1-2 years, we plan to expand our customer base to 100-plus cities.

What challenges have you so far faced in navigating the business?

Overall, it has been a smooth experience thus far. With the Supreme Court order on Aadhaar-based authentication for eKYC being a setback for the industry as a whole, any development that leads to one-step seamless authentication would be a huge plus for us. Having said that, it is still the best tome to be a fintech entrepreneur according to the CEO of Loan Frame.

Fintech of the Year Award

The article was published in the March 2019 issue of Financial Express.

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