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From the US to India- The journey of Nexus-backed Biz2Credit in helping small businesses get funds

Sindhu Kashyap
2nd Sep 2016
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It was the year 2008, the year of the great recession, when the financial system in the US began to see a sea change. Although fintech startups like Paypal had been transforming the way the ecosystem operated since the 2000’s, people soon began to see a gap in the lending market. It was at that time that Rohit Arora and Ramit Arora started Biz2credit in the US.

Working as an online marketplace for business and consumer loans, Biz2Credit connects a network of lenders, small and medium enterprises (SMEs), and individual loan seekers.

“We aim to make the loan process faster, safer and more transparent for our customers by making use of the latest technology, combined with a humane approach to all our services,” says 40-year-old Rohit. The duo had seen a clear gap in the market, where small businesses weren’t getting access to credit in a timely fashion.

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(L-R) Ramit Arora and Rohit Arora

Venturing into India

From the time of its inception in the US, the team had crossed $1.4 billion in small business funding by 2011, and that is when they decided to start operations in India. “We were hardly a team of ten, and our headcount in India now stands at over 150 people,” says Rohit.

Rohit says:

After establishing ourselves as a leading fintech venture in the US, we realised that the Indian Micro, Small and Medium Enterprise (MSME) sector held great potential for a similar platform. Lack of timely finance was a major hindrance to the growth of this industry. We took the opportunity to simplify small business funding here.

The duo found that while large enterprises may have better access to business loans, the small or mid-sized businesses in India have remarkably poor awareness and access to lending products. Rohit adds that, in most cases, entrepreneurs end up using personal credit cards, home equity or their personal savings to fund businesses.

Although banks and NBFCs use technology to enhance their relationship with customers, not much has been done to make things easy for loan seekers. Complicated loan applications and ceaseless paperwork, which often takes days (or weeks) to collate, and an endless wait for approval, are often followed by unwarranted loan disbursal delays.

A different market of challenges

However, they realised that the Indian market wasn’t as easy as that of the US. They found that there were large gaps in the availability of financial and non-financial data. Rohit adds that while there are sound credit underwriting processes in place internally, the lack of qualitative data makes it expensive to underwrite and process deals in an automated fashion.

More than 70 percent of the population does not have a recorded credit rating, or access to such data. The team also had to get in sync with the regulations and regulators of India.

Strengthening the India team

The India team is headed by Ravi Chamria and Thomas Abraham, who had worked in senior positions at Amex, Sage and Walters Kluwers in India. Rohit adds that they have built a team comprising engineers, data scientists, digital marketers, business development managers, talent acquisition managers, and others.

“We have developed a user-friendly platform for India, which has integrated various data sources such as the Aadhar card, tax data, bank statements and credit information from CIBIL. We use data from social media too,” says Rohit.

The team claims to have developed a customised version of their patented BizAnalyzerTM score for the Indian market. This, Rohit adds, can be used for benchmarking their businesses as well as to carry out correct risk-based pricing.

“Further, in the past few months, we have established strategic partnerships with big names like Tata Capital, TaxSpanner, and BUSY Infotech Pvt. Ltd. to help MSMEs in India get greater access to online financing solutions; and many more are in the pipeline,” says Rohit.

According to the RoC data filed by the company, Biz2Credit made revenues of Rs 21,145,233 in the last financial year. The team has raised Series A funding from Nexus Venture Partners, and plans to raise more capital in 2017.

The fintech boom

YourStory Research states that within just the first half of this year, there have been 46 deals in the fintech space, amounting to $285 million in funding. Lending platforms took the largest chunk of this funding, with 10 deals amounting to $74.1 million having been made this year.

Within lending, there are two broad categories — SME lending and personal finance. The bigger established players in the lending space include CapitalFloat and LendingKart.

Speaking of the differences, Rohit adds that Biz2Credit has simplified financing for MSMEs in India by offering them a fintech platform that is easy to understand. Registered users get access to multiple lenders offering a wide range of funding options. The entire process is online, with Biz2Credit’s dedicated case managers to assist users. He says:

As compared to other business lending fintechs in the market, we ensure that our customers get optimum support at each stage of the loan process. We strive to make the entire process transparent, fast and secure for them; so that they come back to us in the future too.

The team is currently ramping up, and plans to build up a team of more than 250 FTEs in India by the end of 2016.

“Our current network is growing steadily in metro cities such as Delhi-NCR and parts of Mumbai. In the months to come, we plan to spread our wings extensively across the country. Biz2Credit is also all set to launch our platform in the UK and Australian markets later this year,” says Rohit.

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