SIDBI formulates online route to facilitate financial inclusion

With a view to offer a single-point digital lending interface for MSMEs to access easy financing options, SIDBI has envisaged as an online marketplace for facilitating quick fund access for banks by providing fast in-principle sanctions from banks. The platform provides for accrued advantages of reduced paperwork/minimized human errors, increased outreach and shorter turnaround time for banks. MSMEs also get to enjoy the benefit of accessing loan offers from multiple lenders on a single platform and reduced loan processing time at no additional cost. The platform has received overwhelming response from the banking fraternity with 20 bankers joining the platform. was conceived as a fintech startup owned by CapitaWorld and has a control and ownership stake by a consortium of Public Banks/FIs including SBI, BoB, PNB, Indian Bank and Vijaya Bank. SIDBI holds a 54% stake in the fintech startup alongwith a consortium of banks which can be extended to 76% following the achievement of pre-determined milestones. The fintech has received several awards from top-notch agencies including the Reserve Bank of India’s Technology Arm, IDRBT (Institute for Development and Research in Banking Technology) and is perceived as a proven technology solution for expediting digital lending processes for MSMEs.

The fintech solution encompasses advanced analytics to read through multiple sources of information including GST returns, bank account statements, ITR filings, Credit Bureau check, application form etc. to triangulate information and build an appraisal assessment for the applicant. The information provided by the applicant is analyzed by the application software of the platform and matched with parameters set by individual banks. Due diligence processes are undertaken by banks after in-principle offers are generated for matched products of banks.

A Coordination Committee of Bankers has been formed to coordinate various matters including the charges to be levied by the platform. The convenience fee of INR 1000 per successful customer transaction is charged by the platform to cover operational costs such as 3rd party databases (6 no.) access costs, service providers costs etc. Further, the fee is payable only if applicant agrees to receive in-principle sanction. It may be pertinent to note that the platform has to incur the costs even for unsuccessful applicants while collecting convenience fee only from desirous successful applicants.

Besides, the portal charges a success fee from Banks in respect of all disbursed cases out of cases sanctioned in principle. This success fee is payable by Banks and entitles the Banks to receive following additional services viz.- Credit Appraisal Memorandum, CMA preparation, MCA/other database access resulting in shorter credit delivery cycle. It may be mentioned that the platform may take a few years to break even.

The platform does not store any applicant credentials with respect to third party databases. The platform accepts data by way of uploading of reports /OTP based authentications by users. The platform is ISO 27001 certified and uses well documented standards of data security/privacy policy.


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