In conversation with Manish Sharma, Chief Business Officer, Saarathi at Decimal Technologies

The integration of artificial intelligence and machine learning has been a game-changer for SME financing, asserts Manish Sharma, Chief Business Officer, Saarathi at Decimal Technologies  

Q1) Digital lending space has witnessed tremendous growth in India in the last 2-3 years. What is your plan to reach the people who are still into traditional ways of lending and not very tech-savvy?   

While the digital lending industry has witnessed tremendous growth over the last two years, we have barely scratched the surface. There is immense untapped potential in India and the possibilities are huge. The government has also showcased its focus on increasing digital literacy in our country through the launch of key initiatives to accelerate the shift from traditional ways to digital lending.  

A majority of the time, applicants are unable to access credit due to cumbersome processes and onerous documentation, which result in a deficient customer experience. At Decimal Technologies, we create tailor-made solutions that offer a faster, seamless, and completely digital lending experience to customers.   

Through AI & ML algorithms, we can streamline customer data and extract the necessary information to determine creditworthiness in less time. This helps in speeding the decision-making process & reducing risks and increasing revenue by retaining applicants. These features make it extremely easy and safe for non-tech-savvy customers to opt for digital lending for their credit needs.  

Q2) What are the products that you currently have and how are they solving the problem of credit access in India? Also, are there any new products in the pipeline?  

With the success of our digital lending marketplace Saarathi, which focusses on digital lending, we want to expand as well as offer services across verticals including loans, credit cards, insurance and more. We also want to create lead generation, enable third-party integrations, and provide multiple other services within a single platform. In addition to this, we can integrate directly with our partner bank/lender’s lending system to minimise the effort of the creditor for review, underwriting and approval. With Saarathi, we hope to extend our offerings to banks and other financial institutions. We are working towards building a business with annual sales of more than $100 million in the next five years. We are also working on a project to transform the entire future of banking into video banking. We want to reduce the need for fixed branches for banking & create solutions that make the need for the physical presence of customers and sales representatives redundant. Additionally, we are also developing a SaaS-based lending system for banks, blockchain for invoicing and reducing the difficulty of lending approval.  

Q3) What are your views about RBI panel's recommendation to curb the use of illegal digital lending?  

I strongly support the recommendations put forth by RBI’s working group as it is a significant step towards creating a safer digital lending ecosystem. As mentioned in the report, all loan servicing & repayments should be executed directly in the bank account of the balance sheet lender and disbursements should be made into the bank account of the borrower. Making policies publicly available and setting up data storage centres in India will help in resolving discrepancies without resorting to any illegal mines, which has been the case with many lending apps operating out of China.  

Q4) What are some of the challenges you face currently and how are you tackling them?  

The dominance of traditional lenders largely due to their ability to leverage existing customer relationships at scale and a lack of digital financial literacy at large are some of the biggest challenges faced by digital lending players like us. Lack of regulations also stands in the way when it comes to trusting digital lending. We are hopeful that the government will introduce progressive regulations in the digital lending space, enabling the industry to work with a standard framework, leading to a secure environment for the end customers.   

At our digital lending marketplace Saarathi, we proactively seek customer consent before collecting/sharing any data with our API partners. We are ISO: 27001 certified and all our data is stored in AWS India in line with data storage & data privacy policies being promulgated by the regulator.  

Q5) How has data analytics helped your business, especially in terms of better customer relationship management?  

The integration of artificial intelligence and machine learning has been a game-changer for SME financing. Both structured, as well as unstructured data, are collected by the lender, and data analytics helps in extracting relevant details for the verification process. Data analytics also helps in customer segmentation to offer specific products for customers as per their needs. It can also help in geographical segmentation, enabling lending businesses to reach people living in rural and semi-urban areas better.