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Will Xoogler-Backed Rupifi Ride India’s OCEN Wave To Change The SME Credit Game?

Will Xoogler-Backed Rupifi Ride India’s OCEN Wave To Change The SME Credit Game?

Open Credit Enablement Network (OCEN) reimagines the credit score ecosystem wherein every service provider can grow to be a fintech-enabled lending market

Rupifi is constructing at the OCEN framework and is focussed on building a lending platform for SMEs however on the premise of coins glide and to fulfil operating capital necessities

OCEN helps Rupifi grow to be a era service issuer among marketplaces and lenders

“Democratising credit score in India is the need of the hour as for reviving the economic system and kick-start intake. Large volumes of credit are usually directed toward massive companies, whereas smaller agencies and micro-corporations are left within the lurch with very little get admission to to credit at all. This is a big situation for the following growth phase of the enterprise” — Nandan Nilekani

Last month, while the Open Credit Enablement Network (OCEN) turned into added to repair credit get admission to for small and medium agencies, it became seen as the following revolution for India’s fintech industry after Aadhaar, UPI, and Account Aggregator community. The idea is straightforward — make credit available for the smallest enterprise for any amount at a minimum interest charge and for short tenures. 

The OCEN has 3 foremost stakeholders— marketplaces, loan carrier vendors (LSPs) and generation vendors. While lending startups and NBFCs and feature queued up to end up LSPs a number of the technology-focussed startups is Rupifi, that is hoping to form a bridge between aggregator-marketplaces and creditors. 

This Bengaluru-based startup become released in 2020 by way of Qbera cofounder Anubhav Jain with Ankit Singh and Jawaid Iqbal. The concept turned into to cater to the credit score wishes of small and medium-sized groups.

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Having constructed a consumer lending product with Qbera (acquired by way of InCred in 2020), Jain instructed cft that he has constantly been interested by the SME segment. “I learnt about OCEN approximately two years back whilst the concept changed into underneath discussion. I changed into already interested by SME lending area, so this precipitated further push to launch Rupifi. ISpirt turned into looking to democratise lending by standardising the whole lending waft between a borrower and lender,” he stated.

OCEN: How It Changes The Lending Game

The Open Credit Enablement Network is a new paradigm for the credit enterprise that seeks to offer a not unusual language and platform for creditors and marketplaces to build revolutionary, economic credit score products at scale. It recognises that the touchpoints for delivering economic products to people and MSMEs increase past traditional creditors. Service carriers can grow to be a tech-enabled credit market and way to its open-supply nature, OCEN will permit anybody to efficiently create plugins for lending competencies into its present products or services, and turn out to be an LSP. More than whatever, the OCEN removes the barrier for lenders. 

Will AngelList-Backed Rupifi Ride India’s OCEN Wave To Change The SME Credit Game?

CredAll is assisting OCEN framework as a collective, like an Account Aggregator framework collective managed through Sahamati. It will even permit candidates to leverage exclusive information sources so that lending can become a Cash waft-based operation instead of the prevailing balance sheet recognition. Here, the space for technology carrier carriers opens up. 

Ankit Singh, a volunteer with iSpirt, main the project told cft that model 1 of OCEN is already in the public area and is looking for remarks from participants. A market or lender can start enforcing on own or tie-up with tech provider companies, he explained.

Currently, there are  initiatives in the pilot degree – Sahay GST and Sahay GeM (Government e-Marketplace). Sahay – GeM as a Loan Service Provider gives new financing avenues to its Seller MSMEs and drives inclusiveness of small agencies. On Sahay GST, the corporations the usage of GSTN are being allowed to take credit on the basis in their turnover and profile facts on GST.

He also explained that the primary concept of Loan service companies got here in RBI UK Sinha MSME committee document which mentioned the idea of loan provider companies. Further, presently, 15-20 entities are looking to be TSP on OCEN.

Rupifi: Built On Foundation Of OCEN

Rupifi’s Jain emphasised that Indian clients have a couple of alternatives when it comes to credit score — from a high-ticket to low-price ticket cost mortgage with larger in addition to smaller lenders. But in terms of SME lending, the better value of underwriting comes up because of multiple offline methods which includes bank verifications, audits, bodily KYC and extra.

Will AngelList-Backed Rupifi Ride India’s OCEN Wave To Change The SME Credit Game?

Hence, SME lenders may want to attain simplest larger corporations which fulfil those necessities conveniently and additionally to restriction the purchase price. Here Jain located the market hole, and building on OCEN, focussed on growing a lending platform for SMEs, but on the premise of cash flow and fulfil operating capital requirements.

“We want to clear up the problem by using lowering the charges of SME lending from the price of origination to underwriting, which ought to be low so that procedure is digital as well,” Rupifi’s Jain defined.

Rupifi: B2B Strategy, Working Capital Focus And More

The organization is, therefore, charging 1.25%-2.5% in step with month as interest with the goal of fulfilling running capital in a time period of 30-60 days. Leveraging a B2B approach, Rupifi offers its product to marketplaces, which blessings it in three approaches—the price of acquisition is low, information for use for underwriting, and collections can happen automatically.

“We knew the charges of advertising and extra are excessive and therefore, we opted for a partnership direction to paintings with aggregators and marketplaces. If we must give loans to ecommerce dealers or eating places, we are able to gather clients at a cheap charge,” he delivered.

The company commenced with its product release in July, after signing up with restaurant and kirana aggregator structures. Within the first month, Jain stated the business enterprise has enabled INR 50 Lakh worth loans. “In the kirana phase, collections are 100% already,” he added.

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In August, Rupifi onboarded large ecommerce and foodtech systems. In September, it's miles seeking to release with a massive B2B pharma aggregator and kiranas as properly. Overall with these customers, Rupifi has 1 Mn SMEs to be had for lending. 

In terms of the monetisation, one obvious direction for Rupifi is the interest on the loans. But further, those partnerships with market comply with either sales-sharing or hazard-sharing or subvention model and produce every other supply of sales for the enterprise. Jain says the model of the partnership depends on how severely that platform appears at credit for the consumer. 

“As we build on OCEN, there may be transaction sales, as each transaction that goes thru us, we are able to fee market, per mortgage charge. We will then grow to be enabler among lender and borrower.”

Over the modern FY2021, Rupifi is centered on getting extra partners throughout sectors. The plan is to get 10K customers for the same through March 2021. The key awareness areas are food, pharma, retail, ecommerce, and logistics. The startup is likewise trying to build credit ratings specific to every zone and could scale the ledning in every hence. Currently, the organization’s first product “Pay Later by Rupifi” is stay and the plan is to scale it in addition. “We want to consciousness on give up-use managed or cease-use described mortgage, where we know where the mortgage is being spent in order that the lending may be similarly advanced,” he introduced.

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