Founded by two brothers, this NY fintech startup is helping lenders modernise their back offices
Applying for loans is a hassle for borrowers — the inane paperwork, gathering documents, KYC approvals, jumping through hoops, and finally getting access to the money is a long, arduous process.
For banks too, it’s equally — if not more — of a nuisance, having to process all the paperwork, verifying documents, gathering extensive credit histories, and then pricing the risk they would be taking on. All these multiple steps, processes, and additional expenses make it imprudent for banks to dole out small loans, which particularly puts small and medium enterprises (SMEs) at a disadvantage.
This huge credit gap between lenders and borrowers, particularly exacerbated by manual back-office processes, inspired brothers Rohit Arora and Ramit Arora, and Vineet Tyagi (CTO) to set up Biz2X, an API-driven digital loan processing and enabling platform.
Biz2X essentially helps banks streamline their lending processes, including paperwork management and authentication, by providing proprietary technology that helps make quick credit decisions, and disburses loans within days, instead of weeks and months.
Features like open API integration, streamlined user interface, continuous risk monitoring, and bank statement analysers on the platform helps banks not only grow their loan portfolios, but also cut down on the cost of servicing these small loans.
“Particularly in the SME lending sector, we realised that the capital to lend is there, as is demand. But banks don’t understand SMEs fully, especially when it comes to processing their financial statements and creditworthiness. We leverage tech to help banks make their loan processing more efficient, and enable them to give out smarter loans,” Vineet tells YourStory.
Biz2X was born out of Biz2Credit, a US-based SME lender, founded in 2007 by Rohit and Ramit. The platform, in its earliest avatar, was used to power Biz2Credit, but as more financial entities found value in its offerings, Biz2X was spun off as a separate startup.
The startup says more than $20 billion worth of loan applications have gone through its platform, globally, as close to $10 billion in loans have been disbursed.
Modernising back offices
Banks, NBCFs, and other financial institutions that want to make their lending process smarter typically form Biz2X’s core clientele. The onboarding process is easy, inexpensive, and the platform can go live in less than three months, the startup says.
“From origination, AI-based risk, and auto underwriting, to cash flow analysis, servicing and collections, we make the client’s digital transformation efforts effortless,” Vineet says.
“We not only help banks and others cut costs, but also significantly improve the client’s experience, and reduce the total turnaround time, which makes borrowers come back to those banks and lenders again and again,” he adds.
Its in-built products, like Biz2X DigiCAM, help the lender authenticate and capture details of the borrower’s PAN, Aadhaar, bank statement, etc digitally, weeding out fraudulent documents more efficiently.
Other features such as omnichannel digital application, risk assessment dashboards, quick decision engines, auto-approvals make the lending journey more agile, and prevents banks from giving out loans to fraudulent or non-creditworthy borrowers.
Biz2X offers its customers the pay-as-you-go option for using its platform. It hosts the platform on cloud, and therefore can scale as per a client’s requirements. The bank is charged only for their actual usage of the infrastructure.
The New York and Noida-based company’s biggest competitors include TurnKey Lender, Numerated, Mambu, Salesforce, Jocata and Kuliza, among others.
The startup’s parent company, Biz2Credit, has raised $387 million over four rounds so far, according to data aggregator website Crunchbase. Its latest Series B round was from WestBridge Capital in 2019, and it counts Nexus Venture Partners as its early backer.
Last year, Biz2X started expanding its operations outside India, fuelled by a spurt in credit requirements in the SME sector. It is currently present in the APAC and EMEA regions, and is targeting office branches in Singapore and Dubai next, hoping to better serve lenders there.
The loan servicing market, which was valued at $2.15 billion in 2020, is expected to grow at a CAGR of 12.19 percent, to $4.81 billion by 2028, according to a report published by Verified Market Research.