Tech-enabled lending: a new initiative by vaccine king Adar Poonawalla

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Adar Poonawalla, the Vaccine King led Serum Institute invested 850 crores in their NBFC  to adopt low leverage and low-cost delivery model to high-quality individual borrowers. This initiative comes when most of the corporates shutting down their non-banking finance business. The company is aiming to disburse personal loans worth Rs.2000 crore during this fiscal year.

Technology-enabled lending is a unique feature of  Poonam finance. Applicant’s credit history, bank details, and all other details were analyzed by using an underlying software and it is fully automated. The disbursed personal loan worth Rs.30 lakh given in a 100 percent paperless and contactless manner. Like demonetization, they are taking this coronavirus lockdown as an opportunity to grow as a digital payment company. They are providing loans at a lower rate than other private banks to attract more bank customers.

The unique selling proposition (USP) of one-year-old Poonawalla Finance is there is no security, no guarantors, and zero prepayment charges for the personal loan. They have already disbursed personal loans worth Rs.1500 crore in the range of 2 lakh to 30 lakhs. All the Non-Banking finance companies are struggling to cope up with the current situation even though Ponnawalla became the fastest growing personal loan provider during this pandemic.

Company officials said that they are targeting high-quality bank customers and offering 10 to 12 percent, which is a highly competitive rate in the unsecured market. The belives that the weakness of other NBFCs is the strength of  Poonawalla finance. They were entered into the market after DHFL and IL&FS and using a unique strategy to compete with them. Long term funds are using to provide short term loans.

The company started its operations with personal loans for salaried individuals, unsecured business loans, and professional loans for doctors, chartered accountants, architects, and company secretaries. It now plans to join hands with established NBFCs to source customers through co-lending. It may enter into new categories like co-branded credit cards and loans against property very soon.

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