Ashok Mittal, founder and CEO, Prest Loans is of the opinion that small businesses, due to the lack of financial documents, are unable to obtain credit from banks. “This is where the role of fintech-based lenders has become all the more important,” he says. “We collect a lot of alternate data from them. These data are related to their personal and social life, business nature, vintage of business and experience. This informal or non-financial data is converted into credit scores, based on which we finance them,” says Mittal.
Yet another area of concern for the small businesses is that they need funds on a short notice basis due to a sudden increase in demand or a festive season; this is not served by the banks. “While traditional lenders have a long turnaround time (TAT) for sanctioning and disbursement, Prest Loans can approve and disburse loans in three days,” he shares.