An entrepreneur needs a few basic things to start a venture – a unique idea, a target customer, and finance. Of these, money and idea are perhaps the most crucial. Many a time, they have to let go of an idea just because there wasn’t enough money to back it. For such ambitious, purpose-driven, and self-employed people in the country, the need is – access to money. While banking institutes and Venture Capitalists are doing their part, the role of Non-Banking Financial Companies has been gaining attention. Kudos Finance and Investments is one such technology led data-driven NBFC catering to those in need of financial help to realize their potential. Since inception, it has disbursed over 130 crores, completed over 1 lac loans having over 50,000 unique customers present over eight hundred cities in the country.
Living the Dreams
It all started when Pavitra Walvekar, then working in San Francisco, returned to India and noticed a massive gap in fulfilling debt requirements for the under-served market. It was a challenging market to serve since its an unsecured product with most customers not having Strong financial paperwork. The foundation for Kudos was laid and through a focused data led approach and perseverance the team proved the model and kept executing, even evolving their offering with time. Pavitra feels, “Our lives are fulfilling when we have meaning and purpose. Living a life that benefits other people’s lives is the best way possible to live. In a small way, I have meaning and purpose with families we support through employment and the loans we give in the market.”
He was later joined by Naresh Vigh as Co-Founder a ex-Bajaj and industry veteran
NBFC – The Evolving Support
NBFC’s are catering to customers usually overlooked and left out of the formal system by private and public sector banks. NBFC’s have integrated them by being risk takers and built specific niche understanding of these markets. The country can only grow if large parts of the populations are part of the India story. NBFC’S have broken the link of large parts of the population relying on loan sharks to meet their financial needs, thereby empowering the nation. Using technology, NBFCs are enabling achievement of higher scale and predictability of service. It has allowed on-boarding of customers, evaluation and delivery of the loan to be changed dramatically.
While they continue to provide funding for various personal and business needs, NBFCs themselves have gone through a stinging funds crunch in the last 6 months. Since the IL&FS crisis, the funds from two main providers – MFs and banks – have been drying up. While a few of the NBFCs had the mismatch on maturity tenors for asset and liability, but the majority of others including the short team lenders who did not have these issues had also to bear the brunt. There are a lot of discussions on opening up lines through public sector banks or RBI providing a special window with a line of credit for NBFCs. However, this needs to be resolved on an urgent basis so that both the NBFCs and the large economic base being served by them, start galloping forward fast again.
The Way to Achieve Kudos!
Kudos Finance is a profitable venture that is backed by multiple banking institutions. The understanding of a specific customer niche allows it to tailor an experience that is appropriate for the customer. The company’s understanding of customer’s margins, business cycles, experience allows it to cater to them with speed and accuracy thereby solving the problem of going to multiple places to get a loan and giving a great customer experience. Believing that no-one size fits all, it has curated specific solutions by dividing the self-employed into 3 categories
MSME– Mom and pop shops all under 1Cr in turnover eg. retailers, traders, general stores ticket size 3-5 lacs
Professional Loans– Doctors, CA’S, Architects ticket size 7-10lacs
Partnerships: Using various platforms plugging into distribution networks for a specific niche market eg. Education fees, Doctor hardware purchase,Uber drivers etc Ticket size 5k-80k
An in-house tech team has built capabilities to enable contactless disbursement, authentication and collection. Its differentiated approach uses data mining to K-STAMP customers, which is a pre-approved methodology to acquire customers. Through K-STAMP strategy Kudos achieves:
- Super experience for the customer as the loan is disbursed within 48 hours
- Higher conversion for the sales team
- Avoiding highly leveraged customers that come through DSA channels
- Lower processing cost a team is working only on files with a very high probability of approval, leading to higher profitability.
Getting Future Ready
Being a part of customers’ growth and supporting them through each life cycle of their business gives team Kudos immense joy and pride in positively impacting peoples lives. Pavitra says, “I envision a company of scale that caters and reaches a million lives. The aim is to execute with speed and accuracy with operations across India and creating a 1000cr book company.”
