Forbes India 15th Anniversary Special

Decoding the business of starting your business

Technology-enabled loan processes to the rescue

Published: Feb 18, 2020 01:23:28 PM IST
Updated: Feb 19, 2020 01:42:34 PM IST

India has always been a land of intrepid entrepreneurs. There have been dark decades wherein entrepreneurs, big and small alike, have actually had to swim through difficult economic currents with their hands and legs tied by archaic policies. Fortunately, the tides are turning in their favour. According to the Ease of Doing Business 2020 report by Quartz India, India has jumped 14 places and now occupies the 63rd rank among 190 countries on World Bank’s ease of doing business ranking. This is a testimony to the various programmes and policies instituted by the Government of India to promote and support the spirit of entrepreneurship.

Enabling ecosystem

In her Budget 2020 speech, Nirmala Sitharaman, the honourable Finance Minister of India stated, “The Indian spirit of entrepreneurship which weathered several storms over the centuries inspire and motivate us.  We recognise the need to support and further energise this spirit.” In an effort to facilitate Micro, Small and Medium Enterprises (MSMEs) and digital start-ups, she announced a number of proposals that would directly or indirectly facilitate them in their ventures.

She proposed a scheme to provide subordinate debt for entrepreneurs of MSMEs, an amendment that would enable Non-Banking Financial Companies (NBFCs) to extend invoice financing to MSMEs through the Trade Receivable Discounting systems (TReDS), the introduction of an app-based invoice financing loans product, the promotion of a digital platform that could facilitate seamless application and capture of  Intellectual Property Rights (IPRs), amongst other measures to make the enterprise eco-system more business friendly.

Most important, in an endeavour to give impetus to the Digital India initiative, the government increased the outlay for the programme to Rs 3,958 crore for FY2020-21, marking a 23% increase in the total funds allocated to this programme compared to the previous year. This increase is aimed provide a much-needed fillip to digital ecosystem and infrastructure by giving a boost to IT and IT-enabled services and thus empower businesses and individuals.

Challenges persist

Regardless, budding entrepreneurs face many challenges in breaking the glass ceiling, especially in the online space, where vendors and marketplaces are sprouting in geometric progression – i. The inability to optimise supply chain and inventory, ii. Pressures of rising costs of resources and inputs, and iii. Balancing scalability and profitability. However, the biggest bottleneck for MSMEs and start-ups continues to be the one that’s put paid to many entrepreneurial dreams - access to timely and adequate funding.

According to the study ‘Financing India’s MSMEs - Estimation of Debt Requirement of MSMEs in India (November 2018)’, conducted by International Finance Corporation (IFC), lack of adequate and timely access to finance continues to remain the biggest challenge for the MSME sector and has stunted its growth. The overall demand for both debt and equity finance by MSMEs is estimated to be Rs 87.7 trillion (USD 1.4 trillion), which comprises Rs 69.3 trillion (USD 1.1 trillion) of debt demand and equity demand. Formal sources cater to only 16% or INR 10.9 trillion (USD 168 billion) of the total MSME debt financing. The burning question, then, is how to provide aspiring and functional MSMEs access to assured, easy funds?

Tech solutions to the rescue

A major concern that has kept institutions in the formal financial sector away from lending to this large, underserved segment has been the absence of a credit record and lack of adequate documentation of business operations, which would help determine the health of a firm. Another hurdle for lenders, especially in today’s India where entrepreneurs are sprouting up even from the remotest corners of the country, has been their inability to reach MSMEs through their brick and mortar models, despite having large teams of on field sales personnel.

Fortunately, with the emergence of suitable fintech solutions, entrepreneurs can hope to have efficient solutions to both these problems. Through algorithmic models and data consumption from unconventional sources, these fintech organizations are now able to connect with prospective institutional borrowers through appropriate technology and also accurately create risk profiles for them.

Finserv MARKETS leads the pack

Through its proprietary financial services marketplace platform, Finserv MARKETS has been working towards providing Business Loans to entrepreneurs. The techno-analytics platform also offers customers a 360-degree financial experience, which includes a complete bouquet of loans, insurance, investment & payments products and shopping choices, sweetened with customized deals and offers.

Business Loans from Finserv MARKETS

Finserv MARKETS offers a range of online loans to self-employed entrepreneurs and professionals looking to start-up a new business or expand an existing one. These custom-made loans of up to Rs. 30 lakhs offer flexible repayment tenures and easy access to capital for anything from building new age infrastructure and upgrading to technologically advanced plant and machinery to maintaining optimum inventory or even simply for working capital requirements.

  • Benefits of a Business Loan on Finserv MARKETS
  • Instant Loans - Online access to Business loans for self-employed individuals for up to Rs. 30 lakhs
  • Exclusive Offerings - Tailor-made, pre-approved loans for a complete range of financial requirements.
  • Zero Collateral - No guarantor required while applying for a Business Loan.
  • Range of Tenure - Customized tenures ranging from 12-60 months and a choice between short-term or long-term loans.
  • Value Added Services - Easy access to a Financial Fitness Report and protection of the business loan liability with customized insurance plans.
Application in three simple steps

There are some mandatory criteria such as nationality, employment status, age and experience that consumers must fulfil to be eligible for getting Business Loans on Finserv MARKETS. Beyond that, the application process involves three simple steps:

  • Online Form Filling: This involves filling in personal and employment details.
  • Specify Loan Details: Here, the client must select the loan amount and repayment tenure.
  • Approval & Disbursal: Within just 3 minutes the client is informed about whether the loan is approved, and if so, the money is transferred to the client’s bank account within 24 hours.
The repayment of the loan takes place through convenient EMIs, which are based on the loan amount, the rate of interest and loan tenure and the charges for term loans are calculated on the outstanding principal of the business loan amount. Consumers can simply visit Finserv MARKETS’ website and apply for a loan that suits their needs and all information about the pre-approved loan is available upfront with no hidden charges.

Fast online processing, lack of tedious paperwork ensures applications can be approved in minutes with loan disbursement happening in just 24 hours!  Last but not the least, Finserv MARKETS gives its patrons access to a personalized Financial Fitness Report (FFR), which can keep them up to date on their financial status. The industry has also taken note of the superior experience and technology solution provided by the Finserv MARKETS platform, conferring it with the Best Lending Tech award at the 10th India Digital Awards given out by the Internet & Mobile Association of India.

Freedom to Focus

MSMEs are an integral part of India’s economy. According to the IFC study cited earlier, there are around 56 million enterprises in India, of which, nearly 14% are women-led enterprises. These businesses employ 124 million people and almost 60% are based in rural areas. Most importantly, these enterprises account for about a third of our country’s GDP and 45% of exports. Against this backdrop, facilitating them with timely funds becomes crucial.

Access to adequate and timely finance would enable MSMEs to focus on their core activities. With that in mind, online Business Loans from Finserv MARKETS have been crafted to ensure fast approvals and disbursals, security, no hassles and transparency. Such loans enable established and upcoming entrepreneurs to save precious time and effort spent on arranging for finances, which can be better spent on innovation and strategy for expansion.

Disclaimer: The views, suggestions and opinions expressed here are the sole responsibility of the experts. No Forbes India journalist was involved in the writing and production of this article.