Big AAssistance for lending to Small Enterprises!

24 May 2023

Salaried class has now been perfectly covered for the loan services but MSMEs remain uncovered, and they have to rely on unorganized financers with usurers.

  • Axis Bank shared AA use case in MSMEs lending product targeted to young entrepreneurs, who otherwise rely on unorganized financers for funding.
  • Axis Bank presented its use case along with its TSP – Perfios and Account Aggregator Anumati

Financial access to the salaried class has been widely covered by the banking sector. MSMEs, considered the backbone of the economy, are mostly deprived of financial access. They are known to meet their financial needs through the unorganized sector and at exorbitant interest rates.

Axis Bank, along with Anumati and Perfios showcased their distinct use case that leverages the power of the AA framework, to further credit access to young entrepreneurs and MSMEs. The session was led by Mr. Kulranjan Singh from Axis Bank, who explained the early adoption of AAs by the Bank towards loan underwriting.

Mr. Kulranjan Singh- Assistant VP, Axis Bank; Mr. Vinay Sathyanarayan- VP, Perfios; Priyal Trivedi- Assistant Director, Anumati, gave a detailed demo of the product journey, use case of AA within the process of loan underwriting and testimonials from beneficiaries of the product.

Mr. Singh started with the discussion of challenges for first-generation entrepreneurs in getting loans sanctioned as financial institutions require collateral to underwrite loans, and the paperwork process might be cumbersome and prolonged, taking several days.

Small business owners with limited resources and time to spare are short on time and energy to go through the banking process. AA framework has helped them, access loans fast and easily, which was explained through an immersive video-based infographic.

With AA, the entrepreneur can avail of the loan without much security based on their income data, which is fetched through their consent and OTPs. Here the details of the business PAN card and mobile number are required, and then a QR code is presented. Scanning that code will help the person do everything on its own on the front end, and at the back end, the relationship manager can see the detailed happenings.

Each OTP provided to the client is mentioned with its usage, and once consented to, these OTPs help the institution to gain income, GST, and other information, and then the loan can be sanctioned within 20 minutes.

After the elaboration, Mr. Singh presented several testimonials on how real-life people were helped by Axis Bank leveraging AA, explaining their experience in their words.

This fast & easy process is not just transforming the way traditional processes used to happen but also helping the people who, for any reason, could not get the loan sanctioned conventionally.

Watch the session here.