A digital journey: From Data to Platform
NeoGrowth has adopted Analytics, Technology & Strategy as the engines of growth:
NeoGrowth Credit, a systemically important, non-deposit taking NBFC and a pioneer in SME lending based on the underwriting of digital payments data, provides finance to small business owners to drive business growth that matches their ambitions. Headquartered in Mumbai, the company serves 70+ industries with a presence across 26 cities in the country. It has disbursed over `62 billion loans to 29,500+ customers till date to first-generation entrepreneurs, women entrepreneurs, and first-time borrowers. It also provides financing to retailers, restaurants, apparel shops, kirana stores, petrol pumps, groceries, pharmacies and other MSMEs.
DATA ANALYTICS
Understanding and making use of data to derive meaningful outcomes for the business is what differentiates NeoGrowth from other traditional NBFCs and banks. Arun Nayyar, CEO of the Company, says the company has strong data management s y s t e ms wit h s t r uc t ured or g a ni z e d warehouse, which enables it to have ready data available for advanced analytics on tap. “We have invested heavily in analytics, machine learning, digitization of customer journey and digitally verified alternate sources of data, which has helped us to reduce the turnaround time for loan sanctions and underwriting basis various types of alternate data,” he says.
AI & ML BASED MODELS
NeoGrowth has a data science unit, powered by AI & ML based models, which enables it to provide real solutions in making objective decisions for the business. Says Arun: “AI & ML based models have enabled us in terms of customer value management by identifying eligible customers and offer them a loan with fasttrack digital underwriting, enhancing customer experience and reducing TAT. Early warning models enable our risk management to help take proactive policy actions and streamline collections.
Understanding the customer needs and requirements through past data and behavior enables product development and enhancement. A 360-degree application of data science enables us to make decisions across functions like human resources, operations, customer service, sourcing, collections and risk.”
FASTER TECH ADOPTION
The pandemic has led to various changes in the way IT is used by enterprises and despite several challenges NBFCs in the fintech lending space were quick to identify gaps in the existing formal lending space, points out Arun, stating further that such NBFCs thrive on the strength of faster technology adoption and government impetus. He says for example NeoGrowth has adopted an ATS (Analytics, Technology & Strategy) enabled-approach during the lockdown phase and the main advantage was that the company was able to reach the customer’s doorstep digitally by enabling digital payments, communication and support. “As much as 99% of our collections are through digital modes of payments such as POS, UPI, NEFT, RTGS, Bill Desk, etc,” he points out.
COLLECTIONS APP
Technolog y has connected internal stakeholders in the company (sales, collections, credit & risk) and an employee with field agent (both on-roll and off-roll) work remotely, ensuring seamless and realtime coordination with the customer and effective collections. Arun says further: “There has been pro-active portfolio management by deploying technology and analytics resources for supporting collections through calling, recovery and settlement scorecards. A field executive can easily use a collections mobile app on a smartphone from his home, to view the amount allocated to him for collections along with all details about the customer to enable real-time understanding of customers’ loan account and negotiate with him.”
The fi e l d e x e c ut i v e c o ul d then immediately update the collections amount and issue a digital receipt via email / SMS on a real-time basis to the customer. “The integration of this mobile app (ENCollect) with internal systems and data warehouse has enabled us to make real-time repayment reconciliation with finance and operations stakeholders,” says Arun.
And most importantly, customers do not have to keep track of their due dates as NeoGrowth’s customer app notifies them about their payment cycles.
IN-HOUSE CAPABILITIES
Strong in-house capabilities in technology have enabled NeoGrowth to quickly roll out strategic initiatives on giving options of tenor enhancement and moratorium. “This has acted like Sanjivni for our customers to survive and restart their business,” says Arun, explaining that the company’s micro-service-based architecture has been designed to ensure that all technology assets
are integrated and connected smoothly and can call upon data/functions from each other. “We moved developer roles in-house. And our branch level outsourced IT support staff has come down,” he adds.
One major challenge the company faced was multi-browser testing for mobile app, but a solution was evolved using Browserstack opensource tool.
HIGH PERFORMING TALENT
NeoGrowth has continued to focus on hiring high performing talent and strengthen the organizational pyramid at front-line and middle level. “We do it to support our overall operational efficiency, execution capability and expand our geographical footprints, says Arun, adding: “We follow a hybrid operating model that involves hiring and leveraging contractors on C2H (Contract to Hire) model for core IT capabilities such as development and architecture. Outsourcing is limited to non-core IT services.”
IT PARTNERS RETAINED
NeoGrowth has mostly continued with the existing technology partners for their trustworthiness. Says Arun: “Our performance stands testimony to our long-standing relationship with channel partners and alliances with financial and strategic business partners, which has helped us deliver a superior and rewarding experience for our customers.”
VIDEO KYC OUTSOURCED
NeoGrowth has allied with a video KYC vendor to enable digital onboarding given the limitations surrounding physical field visits. Arun says this feature enables a remote way of verifying customer identify, thus eliminating the need for a physical visit to verify identity. The tool aims to eliminate identity fraud through AI-enabled fraud prevention and error checks.
DIGIBIZZ PLATFORM
NeoGrowth has recently launched diGibizz, an end-to-end platform to help small businesses become digital-ready. The platform was conceptualized based on a research done during the pandemic to evaluate the need for small businesses to digitize their offerings to meet stiff competition from big brands and shopping apps and portals. “We aim to help over 200,000 SMEs double their turnover in 3 years by offering access to bestin-class digital solutions through business solution providers,” says Arun, adding: “With the diGibizz platform, we aim to provide consultation and technology solutions that help small businesses scale up and become profitable. After a quick analysis, we will provide a customized solution to business owners. This could be financial, nonfinancial, or combination of both depending on the gaps that small business owners have identified through diGibizz Digit-O-Meter smart analysis.”
NEOCASH INSTA LOAN
The company has recently introduced ‘ NeoCash In sta Loan ’, an offering specially curated to meet immediate fund requirements faced by retailers and small businesses across the country. It is collateral-free loan of `100,000, with just KYC documents. The approval is instant and online and repayment is `250 daily. The loan product was developed on an insight from the company’s flagship retailer outreach program ‘NeoGrowth Sanjivni’.
Says Arun in this regard: “We use exhaustive digital checks for underwriting and usage of digitally verified alternate sources of data to ensure risk mitigation and governance. Not only this reduces the hassle created by excessive documentation for customer but also ensures funds are disbursed within 24 hours, enabling retailers and sole proprietors to fulfil their urgent working capital and business needs.
NeoGrowth has always focused on creating a positive social impact by lending to first generation entrepreneurs and small businesses. Its business offerings are based on the dual axis of customer centricity and economic growth of all stakeholders. Giving the background of the product, Arun points out: “While speaking to retailers across the country, we learned that due to complex documentation and delays in loan approvals, they missed out on lucrative business opportunities. We created NeoCash Insta Loan with the specific goal of addressing all these problems faced by retailers across the country.”
IT SERVICES: PREDICTIONS
NeoGrowth welcomes the restructuring framework recently announced by RBI. Arun feels that all the proactively announced steps and measures will benefit MSME clients, increase liquidity in the system and will alleviate the stress in the system.
He is of the view that leased infra (like laptops on rent) and VPN services will see a temporary increase to enable traditional desktop users to work remotely. Office IT costs such as internet and printers will not increase, says he.