Technology to handle small ticket collateral-based loans to businesses
Digital-lender Prest Loans of Delhi has signed a strategic alliance agreement with a BSE-listed technology enabled NBFC, U GRO Capital, to provide secured business loans to tier 3 and 4 Micro SME business units seeking access to formal credit at affordable price without requirement of too many documents.
Under the arrangement, Prest Loans shall offer U GRO Capital’s ‘GRO Micro’ product to its small businesses and MSME customers, using its Credit Scoring tool to enable quick turnaround to disburse Rs.100 crores to micro enterprises within one year, said a joint press release on 28 July 2021.
Prest Loans has built the required experience, knowledge and technology to handle small ticket collateral-based loans to businesses without needing complex financial documents like GST returns, ITR or audited financials etc.
It shall expand its operations in Rajasthan, Madhya Pradesh (MP) and Gujarat for these loans where the demand is rising post-COVID as the economy bounces back and businesses are gradually returning to normal. Businesses in specific segments like groceries, pharma, dairy and fruits & vegetables, which have generally not been impacted by lock-down, need funds quickly to grow. The partnership aims to cater to this unmet need and thus unlock the growth potential for these businesses.
The underwriting for this specially designed and customized product shall be done as per the ‘Prest Score’ algorithm developed by Prest, it takes into account and gives weightage to non-financial parameters like family and social information to assess ‘intention to pay’ of the borrower along with ability to pay.
Prest Loans CEO Ashok Mittal said, “We are delighted with our alliance with U GRO Capital as this will help us to increase our presence and expand the reach to offer this collateral based, small ticket MSME loans to our customers who are in dire need of funds at this point of time to grow their business.”
“There is lot of synergy, philosophical match between both entities which will help us to serve the most deserving and underserviced businesses in smaller towns across the country,” Mittal added.
Prest Loans has created this niche product to offer small ticket secured business and MSME loans through tech enabled platform offering collateral based financing support to businesses.
U GRO Capital Executive Chairman and Managing Director Shachindra Nath elaborated, “U GRO Capital is built on the philosophy of ‘solving the unsolved credit gap’ of small businesses. Our ‘GRO Micro’ business was started with a view to reach out to the unserved and underserved small businesses in the remotest locations across the country.
“The partnership with Prest Loans in another step in the direction to achieve our vision. It is heartening to share the technology-led philosophy and this alliance will sit perfectly under our ‘GRO – Xstream’ platform which enables co-lending partnership with like-minded financial institutions. We look forward to nurturing our partnership to create an on-ground impact and are confident that this initiative will support the Government’s ‘Atmanirbhar Bharat’ program.” #banking #investment #MSME /fiinews.com
