As many corporate houses are lowering down their non-banking finance operations that are why the Vaccine king Adar Poonawalla of Serum Institute has made a major play into technology-based lending.
The Poonawalla Finance has already disbursed Rs 1,500 crore personal loans within the range of Rs 2 lakh to Rs 30 lakh, that compete with banks with no security, no guarantors, and nil prepayment charges being its unique selling proposition. With targeted disbursements of over Rs 2,000 crores during this present fiscal, the non-banking nondepository institution (NBFC) is the fastest-growing loan provider during the pandemic.
According to MD & CEO Abhay Bhutada, the company’s strategy is exclusive in some ways. The customers are usually higher risk than bank customers of NBFCs. The Poonawalla is targeting high-quality bank customers offering 10-12% rates, it is extremely competitive within the unsecured segment.
Bhutada said that “Ethics and values are core to the group there are no hidden costs or prepayment charges,”. Also, unlike other finance companies that face an issue of short-term borrowings, Poonawalla Finance is using longer-term funds to provide short-term loans.
During the lockdown, the scale is an appraisal of the process that’s entirely automated with the underwriting software analyzing the applicant’s bank statements, credit history, and GST data, wherever available. it’s happening that a 30-lakh loan is being given in an exceedingly very 100% paperless and contactless manner.
Even conservatively, we’ll grow 35% this fiscal,” said Bhutada.“For us, COVID lockdown could be a chance the identical as what demonetization threw up for digital payments companies,” said Bhutada. Besides the strong parentage, the company is in an exceedingly position to borrow funds at 7% thanks to its high capital adequacy ratio which, at 72%, is nearly five times the 15% statutory requirement.
The reason why the company can grow when others are shrinking is its ability to expand the market share by drawing customers who are seeking to refinance higher-cost loans. Their primary NBFC to provide loans at a lower rate than private banks. Regarding customer category, they’re targeting the bank customer, said Bhutada.
The company has started with unsecured business loans, personal loans for salaried individuals, and professional loans for doctors, chartered accountants, architects, and company secretaries. It now plans to source customers through co-lending, under which it’ll join hands with established NBFCs to lend and retain the bulk of the loan. Very soon, it’s going to expand into new categories like co-branded credit cards and loans against property.