WATCH: Say hello to Namaste Credit, the B2B loan marketplace facilitating easy credit for SMEs
India has as many as 55 million SMEs. The second largest employer in the country, SMEs contribute 45 percent to India's GDP. But it isn’t easy starting and growing a small or medium business, given the many problems surrounding access to credit. Enter Namaste Credit, a Bengaluru-based technology-focused B2B loan marketplace that has tied up with channel partners to “make the business loan value chain better and more productive”.
The online loan marketplace leverages patented technology and superior customer experience to help SME owners get the best business, home, and personal loans. Founded by Lucas Bianchi, Gaurav Anand, and Krishnan Parameshwaran, in 2014, it has processed more than 5,000 loans.
“We are the discovery platform for SMEs because we bring underwriting loans to under two hours with our algorithms. Usually it takes five days for banking institutions to give SMEs any credit," says Gaurav Anand, Co-founder of Namaste Credit.
Watch Gaurav in conversation with YourStory here:
The company, which has 80 partner banks, plans to increase its reach to over 100 by the end of this year.
This startup has raised a total of $3.8 million so far from Nexus Venture Partners.
But things were different five years ago, Gaurav says, as no bank realised the potential of technology in reaching new customers. “None of them wanted to believe that we could use tech to scale up their loan book,” Gaurav recalls.
The target clientele for Namaste Credit is SMEs with revenues between Rs 2 crore and Rs 5 crore. It offers loans ranging from Rs 10 lakh to Rs 12 crore, and the typical loan size is Rs 70 lakh and upwards.
The self-serve platform for SMEs works as a discovery engine for SMEs and banks. It offers automated underwriting and loans are underwritten in two hours.
Namaste Credit's first client was a syrup manufacturer from Kolkata. The entrepreneur, who Gaurav did not name, opened up his books to show Namaste Credit that he had cash and assets that could enable him to pay back a loan. However, the businessman was not getting formal credit because he had expansion plans and the capital expenditure was steep. Namaste Credit checked his books, on-boarded the SME digitally, and built a credit worthiness score after which a big bank funded the manufacturer.
"Banks have to create standardised lending processes if they have to scale. They can longer leave it to the bank manager to decide the fate of the business," Gauravsays.
The company has filed three patents in underwriting technology and is currently employing data scientists.
"We want to remain a tech company and have no plans to be in the lending business. Pricing risk and understanding risk is not our expertise. We want to enable risk to be better priced by using tech; we are a platform for that,”Gaurav says.
According to the RBI, gross bank credit has grown 61.5 percent in 2018-19. The micro, small, and medium enterprises (MSMEs) constituted a minuscule 0.6 percent of the total new credit given by Indian banks. It’s clear that banks need Namaste Credit to reach out to customers.
Namaste Credit's underwriting using AI should be the right tool for banks to find SMEs, and invest in them – and, ultimately, in the country’s growth.
(Edited by Teja Lele Desai)