Finezza, a B2B Lending Lifecycle Management (LLM) solution provider, will offer its tech-driven lending solution to Non-Banking Financial Companies (NBFCs) and fintech in India for a fixed fee for three years. This will enable the latter to facilitate growth, operational efficiency, better customer experience, and compliance through access to technology.

The NBFC sector manages nearly 80 per cent of the assets under management (AUM) with the help of technology. There are nearly 9,000 non-deposit-taking NBFCs in India of which about 5 per cent manage 80 per cent of this AUM.

The smaller NBFCs, with smaller asset sizes, of between Rs 20 crore to Rs 50 crore, struggle with challenges of availability, affordability, implementation, and leveraging of a software infrastructure needed for any lending function. This software infrastructure comprises the entire lifecycle of a loan—loan origination, loan management, credit underwriting, risk management, and collections and delinquency management systems. 

Moreover, the cost of acquiring technology measured against AUM or the loan book for a large lender is significantly less than that for any small lender because of the fixed costs and minimum billing amount of software license or subscription. Additionally, smaller NBFCs often have reduced ability to hire and manage a good IT team with a mix of developers, testers, dev-ops engineers, managers and the chief technology officer. 

“The large technology players cater to the big banks and big NBFCs. For them, the clients they define as small are the next set of players, but still, both these segments represent the top 5 per cent to 7 per cent of the total banks and NBFCs. To cater to the unserved market, what is needed is not an affordable solution that compromises on value but a solution that provides significant value compared to its cost of acquisition,” said Krishnan Iyer, CEO and co-founder, Finezza.

Saniye Zainab, head of product management at Finezza added that lending institution, irrespective of their size, need a loan origination system for a digital and physical loan. They especially require a Loan Management System (LMS) on which traditional and hybrid loan products can be configured easily, rule-based underwriting and risk management mechanisms. 

“For instance, analysis of bank statements, document capture and verification (KYC), credit bureau connector, rule-based business decisions—collections management, integrations in the digital ecosystem for NACH, e-NACH, e-Signing, e-KYC, messaging, tele-calling and so on,” adds Saniye Zainab, Head of Product Management, Finezza.

Finezza, which offers LLM solutions to large, mid, and small originators, aggregators, fintech, and lenders, has defined a small NBFC as any originating or lending organization whose loan book will be not more than INR 500 crore in three years. The start-up will offer its platform at a fixed fee subscription for three years with the flexibility for the clients to map their products, processes, and rules on the platform.  

This will allow NBFCs and fintechs to to initiate new loan products, offer faster turnaround times to their end customers and automate their processes. They can also launch self-service mobile offerings and internet channels, leveraging third-party data aggregators and data providers for faster underwriting.

AB Leasing & Finance recently chose Finezza’s LLM platform and onboarded three loan products on the platform within 45 days. “Their commercial construct was simple and easy to understand with a clear sight towards my cash outflows for the next few years of our growth,” said the company’s managing director, Akash Jain.