In an exclusive interview with SME Times, Binit Kumar, CEO, Moneyloji, a lending platform based on AI, said that Indian Small and Medium Enterprises (SMEs) are facing higher interest rates than their global peers mainly due to higher inflation rate and high growth rate of the Indian economy as compared to developed countries.

Excerpts of the interview …

Please tell our readers about MoneyLoji and its entrepreneurial journey.

Binit Kumar: MoneyLoJi.com is owned by Ganesh Leasfin Private Limited, RBI registered non-bank financial company (NBFC).

Money Loji is a modern money lending platform that offers short-term personal loans to salaried individuals in India. It is the quickest and the most secure way to borrow for the immediate requirement with flexible repayment options starting from 7 days to a maximum of 90 days.

We are also proud members of the Leading CREDIT BUREAUS in India, CIBIL, CRIF High Mark, Experian, Equifax

Its entrepreneurial journey started in a golf course where I met Mr.Sukhbir Singh, my golf partner too and a prudent investor in real estate & hospitality. He knew my banking and financial service background and thus approached me to do something in lending business and thus the idea of launching a fintech company with the help of emerging technology like AI and MI evolved.

How AI helps this platform and its users?

Binit Kumar: Faster processing and less documentation with complete data analysis which is 100% accurate is where AI has a much upper hand than human intelligence. When it comes to our users, what delights them the most is the lesser time and documentation that is required to obtain a loan.

What are the services you offer?

Binit Kumar: We cater to middle to low class salaried professional who depends on immediate cash solutions due to various emergencies which an individual feels is as per their perspective. This could be like

1. medical or accidental emergency

2. unexpected relocation

3. pending EMIs on existing loans

4. or to avail online offers such as black Friday or the big billion sale

5. to plan a short-term trip/weekend getaway etc etc

Please give our readers an idea of the current business loan scenario in India.

Binit Kumar: Unsecured loan portfolio will be growing at a CAGR of 27-30% over the next 3-5 years touching approximately 12 lakh crore. It will be driven mainly due to availability of data and its analysis through AI and MI, resulting in reducing the time from few days to a few minutes for disbursal along with more focus on smaller cities.

Are India SMEs getting enough credit from banks? What about the interest rate in comparison with global SME peers?

Binit Kumar: The interest rates in India are still higher than its global peers. This is mainly due to higher inflation rate and high growth rate of the Indian economy as compared to developed countries.

SME’s are the backbone of the economy and is still underserved to a great extent thus creating room for growth of unorganised lending business in India which is still very active and prominent as compared to the organised lending business . The gap created by the traditional banks on SME getting enough credit due to high risk, no collateral, high transaction cost coupled with its ability to market the product with low credit rating is now being fulfilled by Fintech companies. These Fintech companies who are in lending business having more risk appetite, less cost per acquisition/overheads coupled with emerging technologies like MI and AI along with alternative data analytics, are helping them to fulfill that gap. Going forward, traditional lending business will be a history if the credits are not backed by technology.

Recently, the Commerce Minister urged the RBI to study a USD 25 bn export loan possibility; your views?

Binit Kumar: INR as a currency needs to be stable for the SME to take the benefit of export credit line facility if provided and sanctioned by RBI because the export credit line will come at cost from the banks i.e LIBOR plus X basis point. However if the INR is unstable then most of the benefits get wiped out due to hedging and its cost against the receivable in foreign currency thus making the SME’s more vulnerable in the margins .

Where do you think banks are lacking while NBFCs are outperforming them, according to you.

Binit Kumar: Accessibility, turnaround time and risk appetite is the reason why NBFCs are outperforming banks.

Please tell our readers about your future plan.

Binit Kumar: We are currently looking at catering with our fullest potential to the segment that we belong to. We are also looking at a lot of other segments that are vacant for the lending industry to venture into. Our current target audience belongs in the group of salaried professionals and the future will be SME and self-employed. We will be having a specifically designed product for that particular segment of the audience, keeping our USPs intact. Also, the Fintech companies in lending business are getting much more convenient and accessible than the traditional banking sector.