This feature by Finezza will allow non bank financial companies to create limits at the anchor, lender and borrower levels that can solve India’s Rs 40 trillion unaddressed credit gap
With an aim to transform the line of credit and ease the credit crunch in the sector, Finezza has introduced a new offering in its lifecycle management system (LLM). Via the new product, a non-banking financial company (NBFC) will reportedly be able to manage credit limits and partners internally on a single dashboard.
A line of credit (LOC) is the major type of loan given to micro, small and medium-sized enterprises (MSMEs).
MSMEs need credit to keep business operations smooth and cash flow running, since their work capital is stuck with clients who often take longer to clear the invoices. Therefore, they need short-term working capital loans, said the company.
The new feature by Finezza will allow NBFCs to create limits at the anchor, lender, and borrower levels thereby making operations very simple and giving a clear view of business at any point in time. Notably, in the MSME sector, the credit gap, the difference between the addressable credit demand and the actual credit is given, is nearly Rs 40 trillion Finezza added.
“The operational challenges in managing a line of credit product come from different types of LOC products like invoice discounting, business to business (B2B) buy now pay later (BNPL), fixed date repayment and fixed short tenure repayment. In the case of working with multiple anchors, they need to set an overall limit at the anchor level i.e total loans given to MSMEs associated with an anchor should not exceed a certain amount," said Krishnan Iyer, chief executive officer (CEO), Finezza.
The Mumbai-based company was co-founded in 2018 by Santosh Shetty, Krishnan Iyer, and Govind Dalwani. It offers loan life cycle management solutions for financial institutions and caters to services like credit evaluation, loan eligibility estimator, artificial intelligence-enabled KYC framework, credit data analysis, and more.