In 2015, a statistic caught the attention of four friends of ISB Hyderabad.

Abhishek Kothari, Deepak Jain, Manish Lunia and Ritesh Jain were shocked to realize that India had over 60 million small businesses and over 80% had no credit. This created a huge credit deficit of $ 250 billion with a direct impact on the country’s GDP.

The four, who had worked for decades in banking, telecoms, and startups, decided to solve this problem and founded FlexiLoans at the end of the same year. The fintech SME aimed to provide fast and affordable credit to SMEs in India with a branchless, agentless and paperless business model.

“India was witnessing a digital transformation and this was the perfect time to disrupt traditional banking,” says Abhishek.

Abhishek claims that FlexiLoans’ technology platform is designed to be the operating system for loans and can be used as a SaaS by any ecosystem.

Today, it offers integration, document management (with over 12 embedded computer vision algorithms that recognize, extract and classify documents), CRM, customer communication, bank statement analysis, desktop integrations, models of risk, underwriting, risk management, KYC, escrow management, digital disbursements and digital collections.

“Within six months of our launch in 2016, we had around 10 ecosystem partners like Flipkart, Uber, Ola, Shopclues, Voonik etc. Today, we are one of the leaders in embedded finance, with more than 120 partners using our lending infrastructure to offer loans to SME partners. Five of the top 10 e-commerce players and six of the top 10 non-bank payments and QR readers are deeply integrated into our technology platform to utilize plug-and-play capabilities, ”says Abhishek.

“We have disbursed over Rs 1,000 crore via the platform for more than 40,000 loans,” he adds.

In the company’s first four years, FlexiLoans had witnessed and part of the demonetization, the launch of GST, the launch of UPI, the ILFS crisis – and now COVID-19.

“At that time, we had over 100 partners using our platform. Our next steps were to take this platform to the next level. It was time to infuse our proprietary data science algorithms into workflows and create a complete lending platform that can easily integrate with multiple ecosystems and enable lending solutions on those platforms. He said.

Abhishek says all of this has helped the startup become a specialist in underwriting for e-commerce sellers, digital payments accepting merchants, food tech, and bank statement-based lending.

Build the MVP

The first prototype of the product was released in 2016. Abhishek says they were still exploring product-to-market fit for now. Digital lending was picking up again and there was no software on the market that offered an out-of-the-box infrastructure.

“We first tried to answer a few questions: ‘How will our customers find us? “,” How will our customers approach us? “,” How are we going to connect with our customers? “,” How will the risk team underwrite a request? ‘,’ How will our operations team handle the loan? ‘

“We have created several pathways in our MVP plan to answer each of these questions. Each question was then broken down into epics and stories for prioritization, ”he says.

The technology and product talent weren’t available at first for an unknown startup, so the team decided to give the interns a chance.

A basic client portal where clients can submit their applications and view the status of the application has been created. It was only a three page website, but it served the purpose of self-service. A Loan Origination System (LOS) was designed to allow CRMs and the credit team to process requests.

“We opted for a vendor for a cloud-based loan management system (LMS) for our operations team. Within three months of the idea stage, we launched our beta in April 2016. The goal was to ensure that customers could do everything digitally while internal processes were still largely manual. We only had a desktop version of the customer’s website for the beta launch, ”says Abhishek.

In September 2016, they launched the internal systems for better e ffi ciency. That’s when the team raised their first round of $ 15 million and ramped up development to match the growth. At that time, Flexiloans started to attract organic tra ffi c and integrated 20 partners. In April 2017, they launched the Android app with an improved version of the LOS platform.

Move away from monolithic systems

“The monolithic codebase had served us well in our early days. But we started to face failure issues due to high traffic, rapid development errors, etc. on our platform. And we were working with giants like Flipkart, Amazon and Paytm, who wanted their partners to be the best, ”says Abhishek.

The team returned to the drawing board and began to ungroup the architecture. The first step was to break the monolithic architecture into microservices and perform context-based grouping.

They created model-based front-end assets and separated the front-end assets from the backend services. They added caching, stateless load balancers, and containerization to handle high traffic and scalability. Security and compliance are still key factors when it comes to being a regulated entity, which has led to the introduction of identity management and access control.

Abhishek says that after a year of monitoring our MVP, they have witnessed something unique.

• Huge growth on the platform: With partners like Flipkart, Amazon, PayTM, Snapdeal, PineLabs on board, they’ve witnessed thousands of apps per month and over two million events on the platform.
• Switch to mobile devices: Over 60% of their apps were using the mobile website or Android app.
• Digital transformation: Macro events such as UPI, demonetization, and TPS have led to an increase in digital data and fingerprinting.
• Customer feedback on the experience: NPS surveys and app reviews found that customers demand a better experience. The shopping experience offered by e-commerce giants has raised high experience expectations.

Building OKRs for better concentration

During this time, the team realized the need to create and implement OKR segments for a better product approach. The platform’s KPIs were aligned with organizational goals: improving conversions, lowering operational costs, lowering TAT, and maintaining customer focus.

“We exposed all loan workflows through APIs. Our partners were able to share prospects with us via these APIs and also get real-time updates on each of these prospects, ”explains Abhishek.

Once the team started to find the product market, Flexiloans made a big change: investing in design and user experience. Loans are a category of attraction and borrowers want money. The first aspect to be resolved was therefore the basic fi nancial proposal.

“As we moved forward, a big need from customers was a ‘shopping’ experience that they were seeing on other ecommerce platforms. The same goes for the UX and design team who made sure that we are consistent, user-friendly and innovative. Today, not a single release goes without UX approval, ”he says.

Focus on more powerful microservices

The team created multiple engines on the platform to perform specific tasks and workflows. Flexiloans currently has around 200 microservices grouped contextually under these engines.

• The digital lead generation engine with an enhanced borrower experience and rapid integration with your existing consumer products.
• An AI-powered risk engine with desktop and banking connectors, alternative data connectors, policy orchestrations, scoring engines and eligibility calculators.
• The customer onboarding engine that can enable consumers to digitally sign documents, verify bank accounts, do digital KYC, and get instant money transfers.
• The co-origination engine allows easy integration with multiple lenders and manages a healthy capital flow.
• A loan management engine that includes an efficient loan management system, customer service and BI systems.

“We have opted for a mobile first strategy for two years. Our mobile app has received great traction in the SME ecosystem. It is one of the highest rated (4.5) in the SME lending ecosystem. We have seen a huge growth in the number of customers installing our app since we loaded it with many top notch features, ”says Abhishek.

The segment and the future

The MSME sector is growing at a rapid pace and its contribution to India’s GDP continues to soar. According to the Confederation of Indian Industry (CII), MSMEs contribute 6.11% of manufacturing GDP, 24.63% of GDP through service activities and 33.4% of manufacturing output in India. Despite the huge contribution, the area is considered relaxed.

Flexiloans is an integrated financing platform with more than 120 partners using the lending infrastructure to offer loans to their SME partners. Other players in the loan segment include India, LendingKart, NeoGrowth, Vivriti Capital, Shubh Loans, Happy Loans, KhataBook, and OkCredit.

“But we’re still scratching the surface of the $ 250 billion opportunity. Our ambition is to be directly or indirectly on the phone of each SME. They should have access to fast and affordable credit by going directly to the FlexiLoans app or accessing our services through any partner app, ”says Abhishek.