Credit and Finance for MSMEs: Retail-focused non-banking financial company (NBFC) IIFL Finance has adopted the Account Aggregator (AA) framework by the Reserve Bank of India (RBI) for disbursing loans through WhatsApp to ‘underserved customers’ particularly micro, small and medium enterprises (MSMEs). According to the company, the AA service is enabled on IIFL’s WhatsApp number to provide credit under its existing offering of providing up to Rs 10 lakh loan. The loan offering through Meta-owned WhatsApp was launched around a month ago and has crossed over 1 lakh users within just a month, IIFL Finance said.
With AA, IIFL Finance plans to “enhance and cater to the large untapped pool of potential borrowers who are underserved. Additionally, WhatsApp is one of the most powerful tools to communicate with users, especially for MSMEs,” the company said in a statement. According to Sanjeev Shrivastava, Chief Risk Officer at IIFL Finance, the complete loan journey from application to disbursal can be completed on WhatsApp.
MSME-focused loans by IIFL Finance ranges from Rs 10,000 to Rs 10 lakh with an interest rate of 11.75 per cent and for a minimum period of six months, the company added. The loan period would be of 48 months. “At the backend, a powerful AI-bot matches the users’ inputs to the loan offer, and facilitates the application process.” MSMEs would have to opt for AA option after confirming bank details on WhatsApp, complete KYC and registration to avail the loan. IIFL Finance said that the chatbot journey of applying for the loan takes up to 10 minutes.
The AA framework was first announced by RBI in 2016 and launched in September this year on the basic premise that customer data is generally fragmented and exists in silos in databases of banks, lenders, insurance companies, government bodies, and other entities. In order to provide an institutional framework for seamless and secure data sharing digitally between let’s say a borrower and a bank for credit access, the AA network was created instead of dedicating time in collating information such as scanned copies of bank statements, stamped documents from notaries, bank statements, GST returns, cash flow, etc., and then sharing it with the lender.
AAs are a new NBFC class offering account aggregation services including retrieving or collecting information of its customer pertaining to their financial assets and consolidating, organizing, presenting it to the customer or any other person as per the instructions of the customer for a fee, as per RBI. Financial assets would include bank deposits including fixed deposits, saving deposits, recurring deposits, current deposits, deposits with NBFCs, SIPs, government securities, equity shares, bonds, debentures, ETFs, insurance policies, and more.