B2B Lending Value Chain
The B2B lending value chain in India involves several steps, starting with the credit request or onboarding process. Once the customer expresses interest in availing credit, the lender initiates the KYC and information-gathering process. Following this, the credit bureau check is performed to determine the customer’s creditworthiness. Based on the credit score, the lender decides the eligible loan amount and seeks the customer’s consent. Finally, upon approval, the loan disbursement takes place.
When we compare the Old Traditional model with the new fintech + NBFC/Bank model, in the traditional model, the credit process is lengthy, with physical documents being collected and processed. In contrast, the fintech + NBFC/bank model is entirely digital, enabling faster processing times.
However, both models face unique challenges. In the traditional model, limited access to bank/NBFC outlets and service partners in non-urban areas hinders the credit flow for SMBs. Meanwhile, in the fintech + NBFC/bank model, SMBs’ financial history may not be readily available, making quick digital onboarding and disbursement difficult.