Click Moment: Lending vertically was a turning point for us, says Alok Mittal1 min read . Updated: 15 May 2019, 09:59 PM IST
- To facilitate these businesses, our approach was to initially work with ecosystem partners such as large aggregators to better penetrate segments
- We realized that applying the vertical approach, with or without partners, helped improve the standards of financial services provided to SMEs
When we launched Indifi three-and-a-half years ago, we intended to change the scenario wherein most small enterprises were riddled with little or no access to funds from traditional institutions, such as banks and non-banking financial companies, in spite of having the potential and the intent. To facilitate these businesses, our approach was to initially work with ecosystem partners such as large aggregators to better penetrate segments. For instance, we worked with brands like Zomato to gain access to restaurants and collect relevant data.
While we were doing this in our first year, we realized the choice for small business credit was gradually moving us towards more vertical solutions. We observed that regardless of what domain the businesses belonged to, they had access to a similar set of products and underwent similar underwriting criteria. Such an approach towards lending failed to incorporate the uniqueness of any of these verticals. For instance, travel agencies risk volatility, whereas restaurants risk going out of fashion. The common criteria, thus, could not help mitigate risks effectively.
We realized that applying the vertical approach, with or without partners, helped improve the standards of financial services provided to small and medium enterprises (SMEs). The realization that lending in a vertical manner went beyond being just an efficiency tool helped us serve our customers better. This was a major turning point for us at Indifi. Since then, we have deepened our offerings of vertical industry-based solutions for SMEs. Indifi strives to measure risks and provide credit in a more suitable manner. We aim to double-down on this approach while increasing the depth of our solutions, and innovating both product and credit design, to serve the otherwise underserved SMEs better in their respective industry verticals.
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