India has over 50 million SMEs in India and they account for over 45% of India’s industrial output. Despite employing over 111 million people Indian SMEs are not the first choice of banks and other large financial lenders. The regulatory protocols call for Banks to lend basis a set of paperwork – a condition which all SMEs may not be able to fulfill. For a small SME, what hurts more is the time it takes to understand whether he even qualifies for a loan or not.
SMEcorner.com aims to take away the ‘ambiguity’ around availing credit for SME sector. Within 5 minutes of application, the customer is informed about his eligibility of the loan
SMEcorner was started in 2015 by Samir Bhatia, an ex-banker who has over three decades of experience in the Banking and Finance Industry before starting SMEcorner. Throughout his professional journey, Samir always felt that the small kirana stores or the SME entrepreneurs found it difficult to apply for and get credit from banks and other financial institutions. Even after the tedious process which took more time, the rejection rate remained high.
From a business perspective, retailers and small factory establishments often look for working capital loans to bridge an urgent trade cycle deficit or to fund a new growth project. In both cases, it is urgent and important for the applicant to know the availability of credit and the cost of credit. While the Banks on paper offer a competitive rate of interest, they have stringent policies and processes. For availing a loan from a bank, the first step involves submitting the loan application, along with a comprehensive list of documents related to both the personal and professional standing of the applicant. Once the documents are submitted, customers don’t get access to a dedicated customer relationship officer to follow up with plus they need to visit the branch several times to know whether the loan application has moved forward or not. Many a times, even after going through the steps of the due-diligence the loan is not approved. The process is time consuming and distressing for a retailer with limited resources. A delay or a rejection in getting the credit is also detrimental for the business. The complexity the process had in the past pushed the SMEs to borrow from friends, family or the moneylender, at much higher rates.
SMEcorner, by using technology and data science, aims to reduce the complexity and time required for availing credit facilities, specifically for the SME and retail sector of India.
Focus on data science helps in analyzing larger volumes of data, automate a variety of processes and scales the size of a company as it grows. While Artificial intelligence & Machine Learning isn’t advanced enough to replace humans altogether, it can validate and double-check information, among other common mistakes. Adopting Artificial intelligence allows to eliminate human error while boosting productivity. Machine learning also plays an integral role in many phases of the financial ecosystem from approving loans, to managing assets, to assess risks.
The entire process of loan application to disbursal is divided in three simple steps:
- Apply Online and Upload Documents: Business loan eligibility can be checked in few minutes by filling an online application form on the SMEcorner website. While the applicant fills the form, the technology at the backend keeps on checking the eligibility simultaneously as the form is getting filled.
Post the eligibility check, all the documents can be uploaded online without any hassle
- Credit meet and underwriting: The documents uploaded by the applicant are reviewed internally which helps to assess the amount of loan to be sanctioned. Various Credit tools are used to simplify the process and improve the efficiency of the underwriting. Also, a meeting with the customer further helps to understand their business and take the decision accordingly. This can either be a personal meet with the customer or an e-meet.
- Disbursal: Post the meeting, the disbursement formalities are taken care of and the same are completed in 3 working days
As of date, SMEcorner offers unsecured business loans and loans against property. The SME applying for the loan should have been in business for a minimum of 3 years and have a turnover of INR 25 lakhs or more. It offers loans between INR 50,000 to INR 30 Lakhs for unsecured loans and a maximum of Rs 1 crore against property for secured loans. Currently, around 50% of the loans disbursed by SMEcorner are in the range of INR 50,000 to INR 5 Lacs.
In May 2017, SMEcorner secured funding from the Accion Venture Labs and The Dutch Growth Fund in addition to leading strategic HNIs. It plans to use the fund for expanding into other cities. It is currently present in select cities in three states- Maharashtra, Rajasthan and Gujarat. In the next three years it intends to have 150 branches across 35 locations in 8 states and build a book size of INR 5000 crores.
SMEcorner believes by offering the right mix of products, complemented by a user friendly and sector friendly processes, it will soon be the first choice for credit products for the sector.
