Credit and Finance for MSMEs: Digital lending platform Online PSB Loans (OPL), which operates SIDBI’s 59-minute loan approval scheme, is expected to reach Rs 1 lakh crore loan disbursements by the end of current financial year 2022-23, an increase of 50 percent in the next eight months, its Managing Director and CEO Jinand Shah told Financial Express Online.
According to the data from the MSME Ministry, 2,24,002 bank loans worth Rs 66,471 crore were disbursed till July 2022 through OPL since its launch in November 2018.
From Rs 59,548 crore loans disbursed as of February 2021, the value has increased by 11.6 per cent till date. On the other hand, the number of loans disbursed in the last 12 months was 15,000.
The loans were given across OPL’s product portfolio that includes MSME loans (Mudra loan and term loan for up to Rs 5 crore), home loan, auto loan and personal loan.
|Month||No. of loans disbursed||Amount (Rs, in crores)|
|February 2021||2.09 lakhs||59,548|
|November 2021||2.20 lakhs||64,544|
|July 2022||2.24 lakhs||66,471|
“The Rs 1-lakh-crore is a benchmark figure that has not been crossed by any other platform in the country. In fact, of all the products, 85-90 per cent of the loans processed by OPL are MSME loans as the platform was launched specifically for the sector and the retail products serve only as add-ons,” said Shah.
He added that the 50 per cent growth will be at the back of the credit season that begins from September and goes up to March for MSMEs.
On loan inquiries, Shah explained that 60 per cent of the applications received by them are approved while 40 per cent are disbursed from banks within a week, provided their documents are complete. “40 per cent disbursements is another benchmark for us that is above the industry standard of 5-10 per cent.”
Online PSB Loans is currently working on an artificial intelligence and machine learning based recommendation engine that will show performance of lenders on its portal. Data on the percentage of disbursements made by the bank and the speed at which the amount is transferred will help MSMEs choose the right bank.
To apply for loan, MSMEs are required to share their GST and sales data, IT returns, six-month bank statements, and the details of all the directors of the firm.
Interest rates on the platform range from 8 per cent to 18 per cent. “We restrict any lender that asks for more than 18 per cent from MSMEs,” said Shah. The average loan value disbursed through the platform is currently Rs 25 lakhs, down from Rs 40 lakhs in the last two years. “While the number of applications has increased, the loan value is decreasing. This tells us that while there are businesses in the higher segment, there are a lot more smaller businesses that are going digital and are willing to access credit online.”
On new offerings, the company is currently evaluating insurance products and will launch it on their platform in another six months.
Last year, in December, OPL had raised Rs 50 crore from HDFC Holdings (a wholly-owned subsidiary of HDFC) and an information solutions provider company TransUnion Strategic Investment (TRU).