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How Yubi Loans Helped Sindhuja Microcredit Raise INR 10 Crores to Serve Low Income Group

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Abhisheka Kumar

Managing Director

Our biggest challenge was discovering and assessing lenders accurately and repeating the process seamlessly over time. This is crucial not only for our business but also for our ability to fund subsequent loans to the low-income group. Yubi Loans turned out to be a one-stop solution for all our challenges. After a seamless, one-time integration, we were able to raise INR 10 Crore within a month and able to connect multiple lenders. We’re able to serve better the low-income borrower segment better.

About the Company

Founded in 2018, Sindhuja Microcredit is a Micro Finance Company headquartered in Noida that is working towards financial inclusion of the underserved segments by making credit available to people and enterprises at the bottom of the pyramid. Through onward social lending, Sindhuja is uplifting their users and revising their ‘creditworthiness’ for formal lending systems. 

Present across 8 states in the country, Sindhuja aims to meet the financial and non-financial needs of the rural and semi-urban populations through efficient, customer-friendly, and technology-driven solutions.


Business Requirements

To provide seamless capital to the borrowers at the bottom of the pyramid, Sindhuja Microcredit wanted to enhance its in-hand fund for onward lending and create multiple sources of funds for future loans. 

  1. Primarily, they were looking for a term loan of INR 10 Cr at an optimum interest rate (at par or less than their current cost of borrowing, despite the current rate hike environment) for onward lending.
  2. In the long run, they wanted to expand their lender base and have multiple funding sources to extend onward loans better.
  3. They also wanted to broaden their lender base by adding reputed names so they don’t have to rely on a single or limited source of funds for all capital needs.

The Challenge

The absence of a platform for seamless discovery for lenders and a data-driven lender evaluation system, coupled with MFI being perceived as a relatively riskier lending segment, posed an intertwined challenge to Sindhuja. 

  1. The team identified that reaching out to banks and other lenders individually was not a practical approach to credit-raising.
  2. They needed a system that would enable data-driven assessment of banks and other sources of funds.
  3. They needed a communication intermediary who would act as a conduit for information to lenders, facilitating smooth communication between the parties.
  4. Being an MFI, Sindhuja was perceived to be a relatively riskier borrower due to the underlying nature of their end-borrowers.
  5. Lenders usually engage in low quantum (INR 5-7Cr) with first-time MFI borrowers.

The Solution

Yubi Loans – A one-stop platform that would help Sindhuja raise capital to meet their social lending goals and enable seamless discovery and assessment of lenders by the team. 

  1. While onboarding on the Yubi Loans platform, Sindhuja Microcredit shared all the business information that helped create their borrower profile.
  2. Once onboarded, the platform enabled quick and seamless discovery, evaluation, and match-making with lenders.
  3. The CIR (Credit Information Report) provided on the platform helped lenders gauge the company's profitability through analytics, trends, and interpretation of their financial information.
  4. The structured and ready-for-use information reduced the TAT because of fewer follow-up queries.
  5. Sindhuja was matched with Mannapuram Finance Ltd through the platform's recommendation engine. The company fulfilled all the criteria set out by the lender, who was looking for good-quality portfolios.

The Results

Sindhuja Microcredit raised INR 10 Crores in less than 30 days

  1. Term Loan Raised: INR 10 Cr
  2. Rate of Interest: 12.5% (which was below their current weighted average cost of borrowing)
  3. Disbursal TAT: Less than 30 days

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