On November 15, 2021, Naval Singh, a 37-year-old businessman based in Madhya Pradesh, was granted a small loan of ₹5000 from Kapil Capital and he used the money to get raw food for his animals. After the loan was repaid on Dec. 15, Naval Singh said his experience was truly life-changing. Whether it’s not having to approach local lenders for capital, having access to easy and affordable working capital, and making a record profit by saving on high interest rates, small loans have redefined the Naval Singh loan experience and his story is not alone.
Over the past two months, Kapil Capital, a private microlender aiming to become the first fintech microfinance company, has provided small loans of ₹5000 to ₹10,000 from several of its grantees to pursue their goal of empowering individuals to achieve self-sufficiency and progress through financial independence, leveraging Finflux’s BNPL module and in today’s article, we will find out the greater impact it has on beneficiaries across India.
Understanding BNPL Loans
BNPL is the industry acronym for Buy Now Pay Later and it basically translates to affordable short-term working capital primarily designed for small and medium-sized businesses. Until recently, the BNPL, as a credit instrument, was only available to individual borrowers, mainly to purchase durable consumer goods.
Unlike traditional commercial lines of credit, a BNPL offering designed for SMEs essentially gives them instant access to affordable capital at competitive interest rates. Along with this, since borrowers don’t need to wait for long periods of time to get their loan application approved, they can instantly procure inventory making it a win-win situation.
Over the years, the widespread success of this credit instrument has motivated lenders to replicate the model for SMEs and Kapil Capital’s small loans are a manifestation of this.
Technology at the service of BNPL
Kapil Capital is one of many lenders around the world leveraging Finflux’s BNPL module to provide affordable small to medium sized working capital loans to small and medium enterprises.
However, unlike traditional BNPL agreements where the lender is tied to a back-end e-merchant, Kapil Capital’s offering is a stand-alone instrument that allows borrowers unfettered and instant access to affordable working capital.
The central idea behind why a BNPL methodology was followed unlike traditional lending models, is that a BNPL approach allows borrowers to instantly access low-cost microfinance loans, while traditional ones mainly focus on high cost loans.
Built on the architecture of the Finflux loan management system, the BNPL module not only allows lenders to customize their entire loan offering, but also the workflow and processes behind it. Being a cloud-native and mobile-first technology, lenders also have the option of equipping their field agents with mobile systems so that their overall coverage and customer satisfaction can be significantly improved.
Additionally, since the entire offering is managed through a robust LMS, finer aspects such as credit scoring and borrower screening are executed instantly, ensuring seamless and secure end-to-end operation. end.
Impacting thousands. One loan at a time.
Over the last 2 months, Kapil Capital, in collaboration with Finflux, has disbursed several small loans with an average amount of ₹5000 to ₹10,000 & a common hamstring that binds the experience of “truly life changing” borrowers.
From taking the hassle out of local lenders to burning a hole in their pocket from excessively high interest rates, small loans are revolutionizing working capital dynamics for thousands of last-mile consumers like Naval Singh. on a regular basis and Finflux powers them with state-of-the-art, state-of-the-art technology.
Commenting on the partnership, Vipin Vijayraghavan, co-founder of Kapil Capital, said: “Adopting a cloud-native lending module from Finflux has helped us appropriately serve a significant portion of the underserved market with intentionally designed small loans and to positively impact the bottom line of the last mile consumer. It’s a truly remarkable achievement.”
Rajesh Jain, co-founder of Kapil Capital, added: “The borrower segment of kirana store owners is mostly underserved at the moment and with this innovation we aim to bridge the gap that these small and means retailers regularly face.”
Nayan Ambali, CEO of Finflux, added: “We are delighted to be part of Kapil Capital’s initiative to revolutionize working capital lending in India, as it brings us one step closer to our goal of fostering access financial fairness for each individual.
Disclaimer: This is a company statement. No HT journalists are involved in the creation of this content.
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