The Direct Unsecured-Self Employed product line caters to funding short term and medium term working capital needs of individuals , businesses, professionals, via a suite of customized short and long tenured products, without any security/ collateral.
o Offering comprises Unsecured loans self employed individuals/ non-individual entities / professionals, with end use of funds (working capital requirement, business expansion etc.) to be ascertained during the loan appraisal process
o The business is highly retail in nature, characterized by high transaction volumes, smaller ticket sizes, and significantly higher spread and profit margins (up to four times that of Secured Lending products)
o Given the unsecured nature of loans disbursed, the business also entails stringent controls and monitoring to ensure portfolio health and quality at all times
o While unit of sizing up the business is its loan book size, profitability and minimized delinquency are key business objectives.
o Higher cost of funding impacts profitability as well as competitiveness of loan rates that can be offered to customers
o Understanding of product market characteristics such as referral relationship management, region specific occupations/trade, local financial preferences and practices are important to gain competitive advantage while structuring loans and identifying leads.
