Kapil Capital & Finflux Are Revolutionizing Working Capital Loans in India : Here's How

On 15th November, 2021, Naval Singh, a 37-year-old businessman based out of Madhya Pradesh availed a small ticket loan of ₹5000 from Kapil Capital & he used the money to procure raw feed for his animals. Once the loan was repaid on 15th December, Naval Singh recounted his experience as truly life changing. All the way from not having to approach local money lenders for capital to getting access to easy & affordable working capital & experiencing a record high profit by saving on high interest rates, small ticket loans redefined the lending experience for Naval Singh & his story is not alone.

Over the past two months, Kapil Capital, a privately held microlender aiming to becoming the first fintech microfinance company has been disbursing small ticket loans of ₹5000 to ₹10,000 among several of its beneficiaries to further their goal of empowering individuals to attain self sustenance & progress through financial independence, by leveraging Finflux’s BNPL module & in today’s article we will learn about the larger impact it is having on beneficiaries across India.

Understanding BNPL Loans

BNPL is the industry acronym for Buy Now Pay Later & it essentially translates to short term affordable working capital primarily designed for small & medium sized businesses. Until recently BNPL as a credit instrument was only available to individual borrowers primarily to purchase consumer durables.

In contrast to traditional business credit lines, a BNPL offering designed for SMEs essentially empowers them with instant access to affordable capital at competitive rates of interest. Along with this, since borrowers do not need to wait for extended periods of time to get their loan application approved, they can instantly procure inventories earmarking it as a win-win situation.

Over the years, the widespread success of this credit instrument has motivated lenders to replicate the model for SMEs & Kapil Capital’s small ticket loans are a manifestation of the same.

The Technology Powering BNPL

Kapil Capital is one among the many lenders across the world who leverage Finflux’s BNPL module to disburse small to medium ticket affordable working capital loans to small & medium sized businesses.

However, in contrast to traditional BNPL arrangements wherein the lender has a tie up with an e-tailer at the backend, Kapil Capital’s offering is a standalone instrument which allows borrowers unhindered & instant access to affordable working capital.

The central idea as to why a BNPL methodology was followed in contrast to traditional lending models, is because a BNPL approach allows borrowers to instantly access small ticket microfinance loans whereas traditional lending models primarily focus on high ticket loans.

Designed on the architecture of the Finflux Loan Management System, the BNPL module allows lenders to not only customize their entire loan offering but also the workflow & processes behind it. Being a cloud native & mobile first technology, lenders also have the option of equipping their field officers with mobile systems such that their overall coverage & customer satisfaction can be greatly enhanced.

Additionally, since the entire offering is managed via a robust LMS system, finer aspects such as credit appraisal & borrower screening are instantaneously executed, ensuring a end to end seamless & secure operation.

Impacting Thousands. One Loan at a Time.

Over the course of the past 2 months Kapil Capital in collaboration with Finflux has disbursed several small ticket loans having an average ticket size of ₹5000 to ₹10,000 & a common hamstring which binds the experience of borrowers is “truly life changing”.

Right from eliminating the hassle of local money lenders to burning a hole in their pocket due to excessively high interest rates, small ticket loans are revolutionizing the working capital dynamics for thousands of last mile consumers like Naval Singh on a regular basis & Finflux is powering them through advanced & state of the art technology.

Commenting on the partnership, Vipin Vijayraghavan, co-founder Kapil Capital said, “Adopting a Finflux’s cloud-native lending module helped us aptly serve a significant portion of the underserved market with intently designed small ticket loans & positively impact the bottom line of the last mile consumer. This is a truly noteworthy achievement.”

Rajesh Jain, co-founder Kapil Capital added, “The borrower segment made of kirana store owners is mostly underserved at the moment & with this innovation we are aiming to bridge the gap these small & medium sized retailers face on a regular basis.”

Nayan Ambali, Finflux CEO added, “We are delighted to be a part of Kapil Capital’s initiative of revolutionizing working capital loans in India, as it takes us one step closer to our goal of nurturing equitable financial access for every individual.”