Transformative Digitization In Credit Operations: A Crucial Shift For NBFCs


There is a pivotal transformation sweeping through the financial landscape—one driven by the imperatives of the digital age. Our journey at Clix Capital, toward digitization is not merely a response to a trend; it’s an essential strategy to meet the evolving needs of our customers and to ensure the resilience of our operations.

As our stakeholders increasingly gravitate towards fintech products, the epicenter of their journey and interaction rest on our company’s IT infrastructure. Recognizing this shift, we acknowledge the paramount importance of the digital customer experience. It’s not just a matter of convenience; it’s a strategic imperative to remain competitive in a fast-paced digital economy. The conventional lending process, laden with manual tasks and susceptible to human errors, necessitates a change. Human interaction, though valuable, contributes to 2-5% of errors in the lending process, as researched by Global Risk Institute in Financial Services and International Association of Credit Portfolio Management. These errors translate into unnecessary delays, rework, compliance issues and even human fatigue. To stay ahead, we, along with our intense efforts to create digital ecosystem, are set to pioneer in credit operations.

In alignment with industry standards, Clix Capital’s seamless onboarding process retains the necessity of credit checks and KYC checks. However, the digital advantage lies in its significantly shorter timeframe, a boon for both our customers and our operational efficiency. Scorecards and APIs allow customers to seamlessly onboard, sending their data directly to our origination platform and often pre-populating information for existing as well as fresh customers. Government initiatives such as National Land Records Modernisation Programme and the Digital India Land Records Modernisation Programme extend support towards incorporation of digital land management systems. At Clix Capital, our commitment to making lending more accessible and efficient has led us to integrate digital address-based property searches with access to multiple databases that increases transparency and harbors a comprehensive and resilient collateral management system. Additionally, robust checks like fraud control, field investigation, legal search and opinion, online background checks and automated credit decisions based on banking, financials and credit scores integrated with our lending platforms — all synergistically enable us to minimize manual and paper-based underwriting practices.

Traditionally, lenders required a proven record of loan repayment. However, the industry is witnessing a paradigm shift. Innovative credit assessment techniques are embraced to go beyond the limitations of traditional credit history at Clix Capital. The integration of alternative data sources—education level, bill payment history, and more—has become our arsenal for estimating a prospective borrower’s default risk. Machine learning, a powerful ally, has expanded our ability to accurately assess the credit-worthiness of a much broader segment of the population to enhance the ability to acquire customers.

We’ve carved out market niches in Healthcare Equipment Financing underwriting, conducting rigorous credit appraisals based on user profiles, vintage, and various parameters. Whether it is asset verification, fraud control, or reference checks, our loan origination platforms are raising the bar in efficient underwriting practices. Dexter, our in-house digital loan application software, ensures a streamlined journey from customer acquisition to final disbursal for our Business Loan MSME clients. Parallel workflows for credit assessments, technical evaluations, and legal verifications, coupled with operational checks, epitomize the efficiency that digitization brings to our credit operations. Unique statistical scorecards, founded on comprehensive analyses of banking, repayment track, financials, and other parameters, allow us to precisely summarize loan eligibility.

In conclusion, the digitization of credit underwriting is not just a technological upgrade; it’s a strategic imperative for NBFCs. Clix Capital has not merely embraced the change but is leading the charge to leverage digital innovations to enhance customer experiences, streamline and redefine the landscape of credit underwriting process. This commitment to digitization positions Clix Capital as a pioneer in a future where the digital quotient is the key to sustainable growth and success.

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February 2, 2024 Credit 762

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About Author

Ramdas Acharya

Clix Capital’s Chief Credit Officer, with a remarkable 21 + years journey marked by expertise in underwriting, operations, and product development, encompassing mortgages, business loans, and various financial landscapes.