On November 2, Prime Minister Narendra Modi made a slew of announcements aimed at reviving India’s faltering micro, small and medium enterprises. One of these was about a dedicated digital platform – www.psbloansin59minutes.com – to enable them to access loans of upto Rs 1 crore in just 59 minutes.
Unlike their larger counterparts, India’s smaller companies have long faced difficulty in accessing bank loans. The psbloansin59minutes website was presented as the solution. Once a firm uploads key information such as tax returns and ownership details, proprietary algorithms on the website appraise the application, determine the loan amount that can be given and then connect the applicant to a bank branch – all in under 59 minutes.
As it turns out, the website mirrors the aims outlined in a tender issued by the state-owned Small Industries Development Bank of India on January 22, seeking to hire a consultant to set up a new legal entity that would facilitate contactless lending.
“The solution will use algorithms and techniques to read complex balance sheets, IT returns and bank statements in a very short time,” said the tender. “These solutions can easily capture the basic details of the applicant from present documents. Smart analytics will enable the proposed solution to find discrepancies and automatically pull information from credit bureaus. More importantly the decision-making process for a loan officer can become simpler as the solution provides a summary of credit, valuation and verification on a user-friendly dashboard.”
The tender went on to define eligibility requirements. To qualify, consultants needed to have earned a fee of at least Rs 50 crore from management consulting during the three preceding years. “The consultant should have been in existence in India since April 01, 2012,” it stipulated.
However, a closer look at psbloansin59minutes shows that the company behind it does not quite meet the tender stipualtions. The website is not run by a new legal entity as envisioned by the SIDBI tender. Instead, it is run by a Ahmedabad-headquartered fintech company called CapitaWorld Platform, which was set up in 2015.