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There couldn’t have been a more appropriate time to talk about the importance of cash. While the demonetisation bug has stung almost everyone pretty hard, it is the SMEs that are facing some of the hardest times that they have faced in a while.

According to statistics, about 45 to 55 percent of the formal SMEs (11-17 million) in the emerging markets do not have any access to formal institutional loans or overdrafts despite having an overwhelming requirement for them. The finance gap just grows bigger to 65-72 percent when the figures for MSMEs are taken into consideration.

This is where OptaCredit, an alternative digital lending platform that provides timely access to credit, is coming to their rescue.

Headquartered in Chennai, OptaCredit provides short-term, unsecured loans to SMEs and individuals via its unique Credit-as-a-Service platform wherein applicants can apply online and get the funds credited to their account directly. The platform has received a 300 % increase in numbers in the period after demonetisation.

How OptaCredit came into existence?

The idea of OptaCredit came to S Kumar Srivatsan, founder and CEO, OptaCredit, about three years ago when he was working with Ernst and Young in their management consulting division as a senior consultant. Since his job required him advising financial institutions and banks on ways they could generate more revenue, improve their processes and reduce costs, he soon came to realize that Indian commercial banks aren’t equipped enough to cater to the demands of a segment of market that has little or no credit history whatsoever. The banks had no system at their disposal to be able to assess whether or not one was creditworthy on the basis of their non-traditional data.

S Kumar Srivatsan -- Founder & CEO of OptaCredit

S Kumar Srivatsan — Founder & CEO of OptaCredit

Seeing the state, Srivatsan decided to do something concrete about the situation rather than just cry and crib, and hence OptaCredit came into existence. It launched its operations in October this year, and received RBI’s approval for its NBFC License a little earlier than others, as OptaCredit is not a loan marketplace, and its aim is just to lend via its in-house NBFC.

The digital lending platform has made the loan application process extremely simple and completely online. One of the most important things that sets OptaCredit apart from the traditional banking and other lending systems present in the country is, that an individual borrowing money from the platform doesn’t need to necessarily have a bureau score of CIBIL score.

What is the process to borrow money?

In order to borrow money, an individual just needs to head to OptaCredit’s website and fill up a 10-minutes long application form. Once the form is filled, the platform gets to work and verifies all the application parameters in real-time from various online data sources and government databases.

OptaCredit’s artificial intelligence-powered Assessment Engine helps them underwrite non-traditional data points about an applicant in order to better understand the applicant. This enables them to open their doors to those who loans might have otherwise been rejected by traditional lenders. The platform also ties-up with the applicant’s employer’s payroll team so as to verify the applicant’s salary details. This kind of operation is unprecedented in India and has a potential of benefiting millions of salaried individuals and small businesses. An individual can almost instantly find out, if they’re eligible for an OptaCredit loan by providing some basic details.

Objective behind OptaCredit

With OptaCredit, S Kumar Srivatsan – Founder & CEO, Sriram Chandramouli – Co-Founder, and S.Kumar Srikanthan – Co-Founder, aim to democratize credit in the second largest population of the world by making it more and easily accessible to people with little or no documented credit history.

OptaCredit’s USPs

OptaCredit’s easy accessibility, speedy disbursements, real-time verification of applicant data, use of proprietary scoring algorithms to understand an applicant more holistically, use of artificial intelligence and tie-ups with the applicant’s employers makes it distinct from several other players operating in this domain.

Funding

The self-funded startup is currently operating on a funding budget of close to $ 500,000 by the founder’s family.

Future Plans

For the way ahead, OptaCredit’s plan is to tie-up with various ecosystems so as to expand the credit net. It currently has tie-ups with 6 Companies with captive employee base in excess of 1200 employees. In its next phase of operations, the startup will be seen rolling out products for Small and Medium Enterprises.

According to OptaCredit, the current demonetisation move by the Indian government will help them in expanding their offerings to every eligible applicant across the country as the move will result in an increase in quality and quantity of data about entities and persons, which in return will help them in better understanding their applicants.

[Top Image – Shutterstock]

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