Grameen Koota partners with Artoo to develop digital lending model
Priyanka Sangani of ET Bureau writes about Grameen Koota and Artoo partnership. You can read about the partnership here or online.
Rural lending firm Grameen Koota has partnered with fintech firm Artoo to launch individual business loans. Grameen Koota, among the pioneers in rural lending for 17 years is expanding its product portfolio and will work with Artoo to develop a digital lending model. Artoo's platform will help it go paperless and reduce loan approval and go-to-market time significantly.
Udaya Kumar, Managing Director, Grameen Koota, said, "Post demonetisation, investments in technology and analytics are critical. As we foray into Individual Lending, we believe that it is imperative to adopt digitization into our processes. To this end, we have leveraged Artoo's expertise in holistic digitization for Individual lending. Artoo's platform will allow us to build a scalable portfolio while maintaining risk at group lending levels. By improving efficiency and turnaround time, we aim to deliver a significantly better customer experience."
The products under the individual lending vertical will be the first to be provided through the digital platform.
Grameen Koota estimates that 25 - 30% of their existing borrower base will be interested and eligible for these loans and plans to graduate these customers out of their existing group and lend to them on an Individual basis. Along with unsecured term loans, borrowers can also avail top-up loans for recurring working capital needs. The plan is to launch this product in 15 branches initially and it is estimated to grow the portfolio to Rs 70 cr in the first year.
Sameer Segal,CEO, Artoo, added, "Artoo is bringing its experience of having disbursed Rs 1800 crore in 30 states across India and its nuanced understanding of the MSME borrower to help Grameen Koota re-imagine Individual Lending and deliver value in the rural context. We look forward to helping them continuously increase their efficiency and profitability while keeping risks low and ensuring a seamless experience for their customers."
Grameen Koota is currently operational in five states wiht close to 400 branches. As of August 2016, they had crossed the portfolio size of Rs 3000 cr with a lending base of over 16 lakh.
Financial technology firm Artoo has partnered with Annapurna Microfinance to help improve the efficiency of its loan processing.
The lending firm will use Artoo's Intelligent Digital Loan Origination System, which would help it reduce the amount of time taken to approve loans. Annapurna Microfinance has a strong presence in rural, sub-urban and tribal communities in the states of Rajasthan, Orissa, Bihar, Chhattisgarh, Madhya Pradesh, Maharashtra, Jharkhand, Assam, Meghalaya and Tripura.
Artoo's digital platform will be deployed by Annapurna Microfinance in five branches of Orissa, followed by Chhattisgarh and Madhya Pradesh in the later weeks and scale to 15 branches by July. Annapurna expects to disburse loans worth INR 100 Crores by the end of 12 months.
Dibyajyoti Pattnaik, director, Annapurna Microfinance said, "We were searching for a product that would enable us to make our processes more efficient, less manual, make interventions more technological and minimize the subjectivity involved in loan appraisals. The evolving market required us to update our processes, to enable quick and easy credit to the underserved population. To this end, we have leveraged Artoo's expertise in digitization of MSME lending. This has helped us to expand our reach and lend to the last mile effectively."
It also plans to enter the individual lending segment, aimed at borrowers with higher repayment capabilities. Beginning with microenterprise loans (ranging from Rs 50,000 to Rs 10,00,000), it plans to enter micro-housing loans in the future.
Using the Artoo platform will enable field officers make loan decisions at the customer's doorstep, thereby reducing the loan approval and turn-around time significantly. This will help Annapurna Microfinance to reach out to more customers in remote areas in a shorter time.
It plans to increase the loan ceiling for this segment of borrowers from Rs 50,000 to Rs 3,00,000. This is because the platform captures a wide range of notional data to perform a holistic credit assessment at the doorstep of the borrower, and therefore reducing the risk associated with high-value loans.
It allows the lender to minimize human error at all levels and eliminate individual bias. In addition, borrowers will know about their loan approval status on the field, thus establishing trust and transparency in the process.
