GST, demonetization persuaded SMEs toward better tax and reporting compliance

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MyLoanCare.in has a mission is to bring transparency, simplicity and convenience in the way people borrow money. Gaurav Gupta, co-founder and CEO, MyLoanCare.in, tells us more. Excerpts:

BW CIO: Summarize the activities of MyLoanCare. Why should people come to you?

Gaurav Gupta: MyLoanCare.in is an online loans marketplace, which digitally connects retail and SME borrowers across India to multiple lenders and help them get the right loan. Our mission is to bring transparency, simplicity and convenience in the way people borrow money.

Our company works with a single minded focus on maximizing customer satisfaction which is seeded in our processes, systems, training and communication to enable us to provide bank neutral advise and loans to our customers. This is what we believe is our unique value proposition to our customers and the results are reflected in our consistently high customer ratings.

BW CIO: Are you lending yourself, or rely on banks?

Gaurav Gupta: We are not a lender, but an enabler to facilitate borrowers in comparing and getting loans from our 25+ partner banks

BW CIO: What is your state-of-the-art technology? Elaborate.

Gaurav Gupta: Our focus is on bringing together different components of technology to ease off customer pain points from traditional lending systems. We have a customer-centric approach, and hence, all our technological initiatives are geared towards making the borrowing process seamless for customers.

It starts with our portal with educative rich content on loans and includes our eligibility and EMI calculators to assist a customer in taking a loan decision, advanced complex algorithms which run in the background to match a customer profile and eligibility with bank policies and offers, ability to run quick credit score checks, online loan application and documents upload facility, API integration with banks to communicate quick decision to banks and a real time status of loan application to the customers.

We are further working on building algorithms to identify opportunities to save interest, improve loan portfolio management and identify best match loan offers for our customer basis their demographics, income, profession and past credit score.

BW CIO: A lot of focus is on SMEs. Are they able to pay back or are they still risky?

Gaurav Gupta: In the past, lenders have been wary of lending to SMEs, given a perception that risk of default is higher compared to other segments. Non availability of financial statements of SMEs, rampant under reporting of profits to evade tax, lack of strong credit assessment models, fluctuating cash flows and general credit indiscipline were some factors that drove this perception. However, regulatory changes and technological advancements have addressed many of these factors.

GST and demonetization has persuaded SMEs towards better tax and reporting compliance. Innovative products with customized repayment options have provided the required flexibility to match a SMEs fluctuating cash flows.

Wider coverage and usage of credit bureaus has also instilled credit discipline in SMEs and armed the lenders with valuable insights. In summary, all these factors together have reduced many of the inherent risks associated with SME lending, making it attractive for lenders in the current scenario.

BW CIO: What kind of business loans do you provide?

Gaurav Gupta: We provide collateral free unsecured business loans to our customers through our 24+ partner banks. These loans are addressed at meeting short term borrowing requirements of SMEs to bridge their temporary cash-flow mismatches or fund their capex requirements.

Many of our banking and NBFC partners offer loans for SMEs using unique approaches to estimate the eligibility of SMEs basis their banking history, GST filing, point of sales turnover or industry margins instead of the traditional tools of calculating eligibility based on reported financials.

BW CIO: How is MyLoanCare.in equipped with innovative tools and strategies for addressing customer pain points?

Gaurav Gupta: The customer pain points from traditional channels have been lack of comparison, transparency, long drawn processes and paperwork making the process of taking a loan cumbersome with turnaround time ranging from 15 days to more than a month depending on the lender and customer profile. To add to his woes, the customer had no certainty or visibility on the final outcome of his loan application making it a long waiting and stressful process.

At MyLoanCare.in, the process of taking credit is made easy through an algorithm- based matching of the customer’s credit profile, thereby showing them only 2-3 suitable bank offers as per their needs and eligibility. Furthermore, customers can compare the rates, terms and conditions of all banks together to zero in on the best deal.

This efficient process of shortlisting loans and advising users enables customers to take an educated and informed decision without any confusion. Technological integration with banks allow us process loan applications instantly, check a customer’s credit score online to identity the suitable offers and enable customers to check the real-time status of their loan application.

The average turnaround time has been cut down significantly ranging from a few hours for a category like gold loan or personal loan to up to 7-8 days for big ticket size loans like home loan or loan against property.

BW CIO: How will you meet all financial requirements in future?

Gaurav Gupta: Currently, we provide all kinds of loans to our retail and SME customers including personal loan, home loan, gold loan, loan against property.  Credit cards, free credit reports and unsecured business loans are the latest addition to our portfolio.

In the near future, we plan to add more financial products, including mutual funds and deposits, to be able to meet all financial requirements of our customers at different stages of their life cycles.