Shiva Prasad Palancha the founder & CEO Of MAKSPay Fintech Solutions Private Limited shared his company’s journey with The Global Hues
MAKSPay is a Financial Technology Service Provider (TSP) Platform to Banks, NBFCs, and MFIs. Their services include digital sourcing, onboarding, authentication, credit underwriting, disbursement, monitoring, and collections. “We envisage ourselves as a preferred Fintech partner for facilitating Priority Sector Lending for banks and financial institutions. Our processes will help financial institutions reduce their operational cost and increase their Net Interest Margin (NIM),” said Shiva.
This helps to expedite the lending process turnaround time and helps to scale businesses with a simple API integration to the platform. MAKSPay’s technology stack is completely integrated with Digital India Public Goods, Ecosystem partners. Likewise, the company holds its own proprietary patented protocols to source, onboard, authenticate, underwrite, disburse and collect digitally. India’s total Loan book today is 85 Lakh Crores and is expected to be around 150 Lakh Crores by 2035.
Shiva believes that their product will be able to provide an easy and seamless platform for borrowers and banks. Priority Sector Lending (PSL) is at least 45% of the loan books today, as mandated by RBI for all banks and financial institutions in India. The role of banks and financial institutions to extend these PSL loans is critical to the socio-economic growth of India and is increasing in value year on year.
“We believe the present PSL workflows to identify borrowers, aggregate data, validate information, loan underwriting, disbursement, and most important collections is a very manual workflow and has high administrative costs for banks and financial institutions. Our product reduces turnaround time for processing loans and also the administrative costs borne by the banks today,” stated Shiva.
MAKSPay is a Digital-first, mobile, and web integrated platform, all documentation, and verification are done digitally, in a paperless, presence-less, and cashless manner. MAKSPay leverages Digital India Stack, like Aadhaar for Proof of Identity and e-Sign for Loan agreements tightly integrated with NPCI Stack, UPI for loan disbursement and collections. The Platform is built in-house and is aligned with the present technology artifacts designed by MeitY (Ministry of Electronics and Information Technology) and ReBIT (Reserve Bank Information Technology Private Limited).
Alongside, the integration with the new NBFC AA (Account Aggregator) Ecosystem, focused on Data Empowerment and Protection Architecture (DEPA) completely built on the customer consent-driven model. This gives MAKSPay a technology edge to bring the best in the class new-age data-driven ecosystem. It democratizes access and enables secure portability of trusted data between service providers in a consent-driven artifact model, providing an interoperable, secure, and privacy-preserving framework of data sharing as a Financial Information User for the customers.
The company believes Loan Portfolios risk management is critical post-lending. Therefore, to enlighten clear visibility of Loan books to banks and financial institutions, the company provides Dynamic Dashboards and Data Analytics.
MAKSPay is a B2B2C business. The company’s clients are Banks and Financial Institutions, who in turn serve their day-to-day customers. The multilingual platform offers an array of regional languages, simple onboarding, and a straight-through process to create a delightful experience for the customers. The company ensures a dashboard to their customers, providing Loan details on several repayments pending, due dates, interest charges, tenure, etc. This helps build Financial discipline and keep track of the repayments.
“Our Loan repayments models are uniquely designed, keeping in mind the comfort, intent, and ability of our customers,” said Shiva.
MAKSpay’s Loan processing platform has multiple capabilities to process a loan application in near real-time. Few of them are collecting customer data and documents with minimum input from the customers. The platform collects images and converts them to rich text data, to auto-populate the application form, providing seamless KYC integration and real-time validations for a straight-through automated workflow. The company leverages an e-Sign process to provide a presence-less and paperless signature of the loan agreement.
They also collect data on Socio-Economic indicators, to offer and downstream multiple government programs, which are not subscribed by the customers due to lack of awareness. The platform is multilingual, available in several regional languages, therefore providing delightful customer engagement and experience. The chatbots are designed to interact and provide key information and notifications for customers to manage their loan application process and educate them for better financial discipline at the same time.
Strategies to improve operational efficiency and enhance the customer experience
MAKSPay has uniquely created a technology-driven repayment structure that auto-collects loan repayments as low as Rs. 50 per day using NPCI’s UPI platform. This is tightly integrated into the Digital India First mindset, enabling the customers to autopay without missing their repayments. Following the auto-collect collections model of the micro sachet, repayments reduce the possibility of NPA (Non-Performing Assets) for Banks and financial institutions.
“Our market research has led us to believe marginal community borrowers are comfortable paying micro sachet payments daily, rather than large payments at the end of the month. We also provide an option to make large payments on demand, if they so desire,” explained Shiva.
After Prime Minister Narendra Modi announced SVANidhi loans, Banks were in fact interested in helping but lacked a key part. ‘Ability without dependability is a liability.’ Although the banks can lend, they don’t have a dependable structure in place for easy enablement of loans. MAKSPay as an app can be depended upon to act as a bridge between ability and dependability, thereby reducing the liability of financial institutions.
MAKSPay has garnered a lot of interest from key stakeholders in the financial sector, included but not limited to American India Foundation, Market Allied Skills Foundation, National Street Vendor Association, Town Vending Committee, and Local Street Vendor Association Leader (Lucknow).
Awards and Milestones
- DIPP Certified
- Startup India Member
- Registered with MSME
- Sahamati Account Aggregator Winners
- National Health Stack Ideathon Winners
- Massachusetts Institute of Technology (MIT) COVID19 – India Turning the Tide Challenge Finalist
- Mentored by Indian School of Business and Bocconi University
- SIDBI Financial Inclusion Centre (SCI-FI) IIM Lucknow
- 4 Patents Pending
Vision and Future Prospects
After two years of extensive research, MAKSpay has collected feedback from marginal communities on their issues, problem statements, and pain points. Their business model is focused on creating financial equality and promoting financial inclusion through Digitising Loan application process. This program is unique and has never been attempted, especially for new to the credit segment.
The company aims to promote inclusivity in society by providing access to formal bank credit and educating on financial discipline. MAKSPay is a women entrepreneur-driven startup, with a team consisting of diversified individuals from different parts of India, excelling in a diverse range of experience. The teams go out to the field and interact with marginal communities regarding their products and platforms, collect feedback, and improve our processes.
“We would be the preferred Priority Sector Lending Fintech Partners for Banks and Financial Institutions in the next three to five years,” said Shiva.
Advice for aspiring entrepreneurs
“Focus on problem-solving and build platforms to scale.”