Millions of underserved MSMEs in India face stagnation due to a lack of timely access to capital. Enabling their business growth would help in employment generation while promoting ‘Make in India’ initiatives and strengthening the country’s financial ecosystem. Tata Capital was quick to identify the social criticality of serving this segment and focused on digitally lending to SMEs ahead of the industry.

Tata Capital’s strategic intent is to cater to the SME industry’s debt gap with a critical focus on access to short-term financing. We brought innovation in the entire process from onboarding to underwriting, sanction, and customer support to revamp working capital offerings, including Channel Financing, to dealers and distributors of large corporates. By reimagining the underwriting process as a whole, we leverage alternate data using 1000+ data points to sanction these cases with little paperwork and quicker turnaround time.

Here is how Tata Capital’s digital channel financing solution can simplify a customer’s financing journey:

Simplified User Interface: 

In this era of digitization and tech-savvy customers, user experience plays a vital role in the success of every solution. And we at Tata Capital recognize this. Our online customer application portal has a simplified user interface, enabling customers to complete their application process with utmost convenience seamlessly.

Complete Integration: 

To fast-track the onboarding process, we have adopted integrations with GST, ITR, and Bank Statement Analytics. Along with saving a lot of time and effort for the customer, these integrations provide verified digital data enhancing risk management and credit underwriting. 

Additional Read: How digitization has transformed financial services

Paperless Sanction: 

Usually, the endless documents required for applying for a loan can be a time-consuming and tedious process for customers. Moreover, conventional borrowing needed multiple physical interactions and document exchange, which was not possible during external situations, such as the coronavirus outbreak.

Tata Capital’s foresight in adopting digitization was rewarded as we could continue facilitating the onboarding of Channel Partners even during the lockdown through our end-to-end digital application and sanction processes. 

Customers could apply for channel financing simply by updating required documents online. The entire process is executed online, requiring no physical interactions or paperwork. With the digitized model, customers can access Channel Finance up to INR 2 Cr without a physical visit. 

Additional Read: Steps to Apply for a Channel Finance Online

In-principle eligibility: 

With third-party integrations, channel partners can receive in-principle approval immediately once basic details are successfully verified.In Tata Capital, as soon as the system pulls details like ITR, bank statements, and other essential information, customers receive quick confirmations on in-principle eligibility that helps them plan their finances better. 

Credit Process: 

A robust digital credit underwriting framework backs Tata Capital’s digital channel financing offering. Given the system integrations with multiple digital sources of accurate data like NSDL, Udyog Aadhar, and Bureau, the data is verified and evaluated instantaneously. Access to additional credit databases helps enhance turnaround for KYC validation, fraud check, and credit checks.

The scorecard has in-built intelligence and algorithms to approve or reject or sanction the case with additional security and guarantees. Multiple scorecards have been explicitly designed to suit varying channel finance product structures and ticket sizes. 

Alternate Data:

The platform underwrites Channel Finance up to INR 50 lakhs and Sales Invoice Discounting up to INR 2 crore without financials, basis alternate data. By consenting to give Tata Capital access to GST data to verify sales and purchase information, bureau data to assess repayment track record, and bank statements to evaluate cash flows, customers can reduce their burden of providing information.

The Digital Channel Finance offering has helped reduce the turnaround time to as little as three days with the alternate data approach. The improved efficiency has also helped Tata Capital offer much-needed access to working capital to a larger number of small businesses with diversified risk. 

If you would like to assist your channel partners in accessing seamless Digital Channel Financing, reach out to us to know more. 

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