How does a company that’s disbursed more than INR 1,000 Crores of loans to MSMEs across India build scalable processes while still retaining a human touch? And is that human touch necessary?
Over the last few years, the BFSI industry in India has seen the phasing out of manual processes and a rapid adoption of digitization in their stead, which includes speedy online loan approvals.
But for an economy like India, where the MSME sector is lacking access to formal channels and still evolving into ‘sophisticated’ business enterprises with business records and regulations , can a digital-only approach truly work?
If anything, our experience at Aye Finance shows that a digital-only approach excludes entire business clusters from having full access to formal banking channels, due to a lack of awareness of digital-only habits.
And yet, we’ve created a significant impact in the way that India’s MSMEs operate by not just providing them with capital, but also providing non-financial services that help them catalogue and streamline their business records to help them qualify for a loan or a micro-loan that would be otherwise denied.
Making Tech Meet Touch: Why is Staying Human Necessary?
Why have we prioritized staying human?
Imagine a scenario where a rural dairy farmer who is desperately in need of funding to invest in infrastructure to increase his production. Or a brass worker who’s been commissioned a project so large, it could change the bottomline on his revenue, but doesn’t have enough funds to purchase the raw materials he needs.
In both scenarios – which do involve Aye customers – both business owners operated from geographical areas with limited or negligible digital access, along with inadequate familiarity of our products and some reticence vis-a-vis operating a business with digital processes.
Let’s say these customers did have the ability to use the digitized platforms, from a skills and access point of view. Sometimes, other factors such as the size of the loan and readiness to pay back also get in the way, which require more bolstering than standardized processes can provide.
Which makes the human touch in digitized lending and banking processes even more critical – and this is the gap that we step in to fill. “For the excluded micro enterprises, it is difficult to meet the requirements of a digital origination platform and we have continued to grow rapidly using an assisted fintech approach” says Aye Finance’s MD, Sanjay Sharma.
How does Aye Finance Leverage Assisted FinTech?
Process innovation at Aye Finance is driven by recognizing the issue MSMEs face with creating an organized paper trail for their processes, along with assessing the right loan ticket sizes.
While one part of our “tech and touch” approach is based on working closely with MSMEs to get their paperwork organized, the other part is rooted firmly in enabling comfort with technology and digitized processes.
We use automation to bring down costs and collect repayments through auto debit from the borrower’s account. An Android-based platform, linked to the cloud, is used to fill loan applications on tablets and photos are uploaded.
The need of the hour – especially for our “bottom of the pyramid” customers – is a physical connection balanced with digital adoption.
We’re proud to say that our hybrid approach combining technology and the human touch fits our customers’ needs like a glove.
Decidedly, the question for Fintechs now is not whether it’s necessary to bring together tech and touch, but how they’re going to blend these two worlds in as a key component of their strategies for moving forward, so as to stay relevant to their client’s needs.