For Shailesh Jacob, co-founder of the Gurgaon-based Loan Frame, starting a lending marketplace for SMEs was more than a big opportunity — it was also about contributing to the overall economy. According to the Ministry of MSMEs, the sector contributes around 38% to the GDP and provides the largest share of employment, after agriculture. “In India you have over 50 million SMEs and credit penetration is less than 10%,” Jacob points out. In August 2015, he launched Loan Frame partnering with around 20 lenders.
For the past 50 years, small and medium-sized enterprises (SMEs) and micro, small and medium enterprises (MSMEs) have powered India’s economy, especially in rural and semi-urban areas. But they often fail to get adequate financial support from government agencies, banks and financial institutions, according to the SME Chamber of India.
India’s booming fintech market could be their savior.
Rising non-performing assets (NPAs), overleveraged large companies and the general unwillingness of banks to lend money has meant small businesses are now finding it next to impossible to raise money. As loan portfolios sour, banks do not want to take the risk of lending to an SME.
Coupled with that is the fact that a large number of small businesses have no access to formal sources of finance, are under banked or have little or no credit history. For these businesses, there is no chance of getting a bank loan. It is with this understanding that a troika of entrepreneurs banded together to start Loan Frame.
In an interaction with Dataquest, Loan Frame Founder and CEO, Shailesh Jacob talks about the company’s idea, technology SMEs and loan algorithm. Jacob divulges the current scenario of finance in the industry and what Loan Frame looks for in a skilled candidate.
Kindly put some light on Loan Frame and the idea behind it.
Loan Frame is a leading fintech company that is committed to solving the financing problem for millions of small and medium enterprises (SME) in India. Its vision is to be the country’s largest and most preferred technology enabled SME lending marketplace.
बिजनेस के लिए लेना है लोन तो मोबाइल ऐप डाउनलोड कर करें अप्लाई.
करोल बाग में छोले-भटूरे बेचने वाले कारोबारियों को लोन चाहिए था, लेकिन बैंकों ने उन्हें लोन नहीं दिया। बेटे ने गूगल सर्च करके लोनफ्रेम मोबाइल ऐप डाउनलोड किया और ऐप में ही ऑनलाइन फॉर्म भर दिया और 7 से 10 दिन में उन्हें 66 लाख का लोन मिल गया। लोनफ्रेम ऐसी मोबाइल ऐप है, जो कारोबारियों को लोन दिलाने में मोबाइल एग्रीगेटर की भूमिका निभा रही है। लोनफ्रेम कंपनी की शुरुआत अगस्त 2015 में सिंगापुर से हुई और मार्च 2016 में कंपनी ने भारत में शुरुआत की और अब एक महीने में 700 से 1000 करोड़ रुपए के लोन के लिए एप्लीकेशन कंपनी को मिल रही है। रोजाना 100 से 150 लोग लोनफ्रेम ऐप को डाउनलोड कर रहे हैं। ऐप को लेकर छोटे कारोबारियों में अधिक क्रेज हैं। लोनफ्रेम के को-फाउंडर ऋषि आर्य ने moneybhaskar ने बातचीत की। पेश है बातचीत के मुख्य अंश –
Loan Frame is a Fintech company focused on small and medium enterprise (SME) lending in the Indian subcontinent by building India’s largest technology enabled SME lending marketplace. Loan Frame is providing a technology solution to one of India’s long standing economic problems — availability of credit to Indian SME’s. Its Founder and Chief Executive Officer (CEO) Shailesh Jacob talks about the prevailing lending scenario and what his company is offering…
Loan Frame is a silicon-valley style Fintech company focused on small and medium enterprises (SMEs) lending in the Indian subcontinent by building India’s largest technology enabled SME lending marketplace. Loan Frame is providing a technology solution to one of India’s long standing economic problems: availability of credit to Indian SME’s.
Loan Frame aims to provide the right credit in an easy and friendly manner to SMEs. Customers will benefit from the right product from the right lender where they can get the maximum loan amounts at the lowest rate in the most efficient manner. Besides, it aims to provide an efficient lending experience for borrowers and make them easily accessible to lenders.
In an earlier blog post, we discussed why SMEs developed a dependence on cash transactions and what the likely scenario will be going forward. Here, let’s look at the details of some of the specific factors that will lead to a breaking of the cash habit.
Continue reading “Keeping Your Business, Credit eligible, In A ‘No Cash’ Economy”
India Inc.’s dependence on cash has traditionally been high, especially with MSMEs. A radical policy move like demonetisation has however compelled small businesses to consider alternatives to cash, which hopefully will become a habit. A habit that will serve business well in the emerging environment.
‘Digital India’ is much more than a political slogan. At its core, it is the belief that technology can help improve access to services for hitherto neglected segments of society and the economy.
One such segment is SMEs. Technology is already revolutionizing lending in India and it can bring a true disruption in SME lending, which is ripe for improvements. Measuring borrower risk accurately is something that lenders have always struggled with. This gets trickier with smaller businesses given that such these borrowers do not always have organised revenues and expense trails.