SIDBI Online PSB Loans lending platform eyes 50% increase in disbursements to Rs 1 lakh cr

Credit and financing for MSMEs: Digital lending platform Online PSB Loans (OPL), which runs SIDBI’s 59-minute loan approval program, is expected to reach loan disbursements of Rs 1 lakh crore by the end of the fiscal year in during 2022-23, an increase of 50% over the next eight months, its Managing Director and CEO Jinand Shah told Financial Express Online.

According to data from the Ministry of MSMEs, 2.24,002 bank loans worth Rs 66,471 crore have been disbursed till July 2022 through the OPL since its launch in November 2018.

From Rs 59,548 crore loans disbursed in Feb 2021, the value has increased by 11.6% till date. In contrast, the number of loans disbursed over the past 12 months was 15,000.

The loans were provided through OPL’s product portfolio which includes MSME loans (Mudra loan and term loan up to Rs 5 crore), home loan, car loan and personal loan.

Month Number of loans disbursed Amount (Rs, in crores)
February 2021 2.09,000,000 59,548
November 2021 2.20,000,000 64,544
July 2022 2.24,000,000 66,471
*Data from Ministry of MSMEs

“The Rs 1-lakh-crore is a benchmark figure that has not been crossed by any other platform in the country. In fact, of all the products, 85-90% of the loans handled by OPL are MSME loans, as the platform was launched specifically for the sector and the retail products only serve as add-ons,” Shah said. .

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He added that the 50% growth will occur at the end of the credit season which starts from September and extends till March for MSMEs.

Regarding loan applications, Shah explained that 60% of applications received by them are approved while 40% are disbursed by banks within a week, provided their documents are complete. “The 40% payouts are another benchmark for us that’s above the industry standard of 5-10%.”

Online PSB Loans is currently working on a recommendation engine based on artificial intelligence and machine learning that will display the performance of lenders on its portal. Data on the percentage of disbursements made by the bank and the speed at which the amount is transferred will help MSMEs to choose the right bank.

To apply for a loan, MSMEs are required to share their GST and sales data, IT statements, semi-annual bank statements and contact details of all company directors.

Interest rates on the platform vary from 8% to 18%. “We are restricting any lender that charges more than 18% from MSMEs,” Shah said. The average value of loans disbursed through the platform is currently Rs 25 lakhs, up from Rs 40 lakhs over the past two years. “While the number of applications has increased, the value of the loan is decreasing. This tells us that while there are businesses in the upper segment, there are many more small businesses that are going digital and ready to access credit online.

Regarding new offers, the company is currently evaluating insurance products and will launch them on its platform in six months.

Last year in December, OPL raised Rs 50 crore from HDFC Holdings (a wholly owned subsidiary of HDFC) and an information solutions provider TransUnion Strategic Investment (TRU).

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