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In an interview with TechGraph, Kaushik Mehta, Founder & CEO of RULoans Distributions Pvt. Ltd, discusses the current state of India’s lending and NBFC industry, and how RULoans addresses the unique demands of both urban and rural customers through their ‘RUCONNECT’ digital loan origination platform.
Read the complete interview:
TechGraph: The Indian lending and NBFC industry has witnessed significant changes and challenges over the past few years. How do you perceive the current state of the industry, and what are some of the key opportunities you see for RULoans?
Kaushik Mehta: NBFCs have established themselves as an integral part of the financial and credit-delivery ecosystem in India. Thanks to robust capital buffers and sufficient provisions, NBFCs are well-positioned to expand their businesses. The growing credit appetite thanks to economic activities regaining momentum is the underlying growth trigger.
The evolution of the digital lending ecosystem on the back of smartphone and internet penetration has made it possible for people to avail of formal and affordable credit.
The fintech revolution in India has made the lending narrative by making it customized and targeted with the creation of various lending segments such as B2B lending, new-to-credit lending, segment-based lending, and credit at the point of purchase, to name a few.
By strengthening data privacy and cyber-security and adopting data analytics and artificial intelligence, the digital lending ecosystem will be expanding its addressable market and building customer trust and convenience.
Being one of India’s leading tech-enabled corporate DSA businesses, we are extremely optimistic about the future and building our resources and capabilities to leverage emerging opportunities.
TechGraph: RULoans has excelled in providing a user-friendly digital platform for loan services. What has been the driving force behind this success, and how do you ensure platform security and data privacy for users?
Kaushik Mehta: Since 2016, we have been investing in developing an efficient digital marketing framework to generate potential leads and expand our loan distribution business. As a result of our continued digital marketing efforts, our monthly loan disbursement currently stands at Rs.500 crore.
This year, we have launched our unique proprietary fintech platform, benefitting the entire channel ecosystem. Using this new-age Omni-channel platform, entrepreneurs and loan agents across India can impanel themselves as RULoans partners and also upload loan cases in real-time into the system.
The digital platform runs a proprietary algorithm in the back end to match cases to suitable financiers and processes the loan files for disbursement both digitally and physically.
Data privacy and security are our top priorities. As we collaborate with several NBFCs as our channel partners, we always adopt appropriate measures to ensure regulatory compliance and data security for our users. We carry out data encryption using the global standards of AWS.
TechGraph: In a diverse market like India, catering to the financial needs of various segments can be complex. How do RULoans address the unique demands of both urban and rural customers? Are there any specific plans to bridge the financial inclusion gap?
Kaushik Mehta: Since we have a presence in more than 2,000 towns in India, we believe we can play an enabling role in bridging the credit gap across urban and rural markets in real time. Our cutting-edge digital loan origination platform for our channel partners, RUCONNECT aims to address the credit under-penetration.
With a robust digital backbone equipped with API, CIBIL Bureau, and an advanced ERP system, RUCONNECT delivers an end-to-end seamless customer onboarding framework for channel partners. It offers to its channel partners facilities like multiple logins, faster creditworthiness evaluation of prospective borrowers, real-time updates on loan processing, quicker turnaround on loan applications, and cross-selling of various loan products.
TechGraph: NBFCs play a crucial role in complementing the formal banking sector, yet they face distinctive regulatory challenges. How do RULoans navigate the regulatory landscape, and what measures are in place to maintain compliance while promoting innovation?
Kaushik Mehta: Being a loan distribution company working with banks and NBFCs, we follow strict guidelines of regulatory compliances laid down by the regulatory authorities. Keeping our operations in line with the compliance framework is our prime mandate.
Having said that, innovation has been one of the growth drivers of the digital lending ecosystem. Therefore, the policymakers, key digital lending players, and technology developers need to come together to build a roadmap for innovation and regulatory compliance.
TechGraph: With the emergence of fintech startups and digital lenders, customer expectations for faster and hassle-free loan disbursals have increased. How have RULoans embraced technology and digitalization to meet these evolving demands?
Kaushik Mehta: Our Fintech Platform RUCONNECT is equipped with a proprietary rule engine and integrated with top credit bureaus like CIBIL and CRIF. That gives us an edge and empowers us to gain agility in decision-making on loan disbursals on behalf of our customers looking to avail loans from our list of NBFCs and fintechs.
TechGraph: One of the critical concerns for loan seekers is the interest rate and associated fees. How do RULoans ensure that borrowers get access to affordable loans with transparent pricing?
Kaushik Mehta: As I said, our rule engine gets the accurate data required for availing loans. The data helps customers opt for the lending institutions of their choice in terms of affordable interest rates. As a part of our policy, we do not permit any channel partner to charge fees from customers. Customers pay the processing fees to the Bank directly.
TechGraph: Fraud and data breaches are prevalent issues in the digital era. How do RULoans prioritize cybersecurity and data protection to safeguard its customers’ sensitive information?
Kaushik Mehta: Mitigating data breaches is crucial for us. We have engaged with an international audit and cyber security firm to carry out a comprehensive audit of our entire tech build. We have implemented multiple internal data policies and encryptions to mitigate the data breach.
TechGraph: Financial literacy is crucial for responsible borrowing. What initiatives do RULoans undertake to educate customers about loan-related aspects, such as credit scores, interest rates, and loan terms?
Kaushik Mehta: We have deployed resources on digital and offline mediums to educate the last-mile customer as well as our channel partners. On our digital platforms, we roll out content regularly to build consumer awareness and our initiatives have developed a strong following.
TechGraph: Given the demand for student/education loans these days, how can Ruconnect simplify the process for students seeking loans?
Kaushik Mehta: We are in the process of building an EDU LOAN rule engine that will cater to student fraternities by fulfilling their credit needs.