Online lending takes off in India

Technology in the financial space is slowly catching up in India with everything gradually going digital.

What used to be a long and cumbersome process — getting loans from banks or non-financial institutions — can be done in just a few clicks in future.

Snehal Fulzele, CEO and co-founder of San Francisco-incorporated Cloud Lending Solutions, a technology company that provides financial applications to online lenders, says, “These are the new generation of lending companies. Cloud Lending offers lending solutions to online lending companies to effectively manage their loan portfolios. We enable these lenders to question the status quo and bring innovation to the financial markets.”

He says online lending needs a technology solution that is quick to implement. Gone are the days when a customer has to submit a large number of documents and wait patiently for loan approvals. Cloud Lending Solutions talks about six-click lending experience, where everything happens in real-time. LendingPoint is one of the online lenders that use the company’s cloud-based solutions.

Cloud Lending started in India three years ago, and has an office in Bengaluru. It is present in over 20 countries with 70 customers. While last year, the company had 20 employees, at present it has 55 employees, and also has its sales and marketing in India. “In another six months, we expect to double the employee size. We have a lot of traction here for online and marketplace lending. We expect the market to grow very rapidly,” he says. According to him, the banking industry is undergoing a transformation now.

“Banks, including Indian banks, want to operate as efficiently as the new non-bank marketplace and online lenders. We see opportunities for private banks and established banks to use technologies such as ours to combat the new entrants,” he adds.

Across the globe, the online lending industry is growing at a rapid pace. In September this year, the cloud-based lending technology provider raised $8 million in Series A venture funding.

The company’s website says it has grown at over 300 per cent last year. “In India, in the last 15 months or so, nearly 25 startup companies started using similar technology models. It’s a good start in India and the market will grow rapidly. We are targeting Indian banks and also financial institutions based on the size of the company,” he says.

Talking about the company’s clients in India, Snehal says, “We have a number of Indian customers and we meet with many new companies wanting to set up technology-enabled financial services business targeting MSMEs and the unsecured consumer loans sector.”
When asked about online lending in other countries compared with India, Snehal says, China has around 2,000 online lending platforms and in terms of volumes they are close to $70 billion.

On competitors

“Our competitors vary by which market segment we are in. For banks, the competition is the old, inflexible technologies like Nucleus, Temenos, and Finacle. We see that the Indian market is looking for solutions that improve flexibility, customer experience, time-to-market, and affordability. That is where the cloud excels,” he says.

On products, its 6-Click Lending targets online lenders, whereas CL Deal Room handles the most complex loan origination processes. CL Originate is a next generation platform for loan origination, and CL Loan is an end-to-end loan management platform built on Salesforce.