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Here’s how B2B platforms can ensure higher credit disbursement with FinBox’s multi-lender stack

Anna Catherine   /    Content Specialist    /    2022-12-29

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Digital platforms are increasingly replacing banks as the face of financial services. They’re the access points for many new borrowers, the first enablers of formal credit. But if platforms’ lending programs cater to only prime borrowers, they end up excluding a large chunk of customers, resulting in lost opportunity for revenue growth in the future. 

For a B2B platform particularly, it is crucial to meaningfully engage and serve their entire customer base. Why? Because they majorly cater to the MSME segment (thin-file borrowers) and enabling formal, timely credit at the point of sale is the best customer loyalty programme out there. But a single lending partner is unlikely to have the risk appetite that can accommodate needs of all platform participants. This is why access to a diverse lender network that can cater to all risk cohorts is critical for B2B platform growth. Having said that, mere access to multiple lenders does not assure maximum coverage. You need a fintech stack that seamlessly works with multiple lenders to disburse credit at scale. 

Let’s understand this better with a real-world example. Let’s say you are a farmer advisory platform. You have a million users and their farm data. You have even managed to generate insights relevant to financial institutions for credit underwriting. You pick 100 users and transfer them as leads to lending partner A. But lender A qualifies only 40 of them. The remaining 60 who may have qualified for loans of, say, lending partner B or C will have to keep going through the whole application process from scratch, over and over until they land a loan offer. This is not just tedious but supremely inefficient!

To be able to disburse credit efficiently, and at speed without compromising on user experience, platforms need the right tech stack that seamlessly integrates with a lender network. 

How FinBox cascades with a multi-lender stack to ensure higher credit disbursement for digital platforms

At FinBox, besides enabling access to multiple lenders, we also empower platforms to offer their users a seamless checkout experience.  This is made possible using what is called the ‘cascade method’. 

The working principle is simple. As the user progresses through the application journey, he/she is assessed based on various parameters and is checked against the prime lender, say lender A. And if declined, it cascades down to near-prime lenders (lender B, C, or D), and further to second-look options, until a loan offer is generated. Also, platforms can determine the order of lender preference and rearrange it for best outcomes. The best part? All this happens on the platform’s app or website in seconds with zero redirects.

This method combined with the adaptive capacity of FinBox’s rule engine keeps the user journey short and sweet, halving drop-off rates, reducing customer acquisition costs, and increasing customer lifetime value. We also offer automated, intuitive nudges to help end users complete a transaction, delivering a 50% improvement in conversion rates.

The beauty of this method goes beyond user experience. It’s also about how platforms can go from doing everything to almost nothing to enable credit for their users. No more transferring leads manually. No more excel sheets. No more follow ups. 

At FinBox, we have built a highly customisable dashboard for platforms to track all loan applications in real-time and generate deep analytics across the funnel. 

Now, let’s go back to the earlier example. You notice on the analytics dashboard that a certain risk cohort makes up a promising borrower segment, and yet fails to pass through lending policies of your current partners. Finding a lender who could cater to this particular segment can be a tough search. But what’s tougher is integrating with a new lender’s Loan Management System (LMS). It is an excruciatingly cumbersome process. This is where FinBox’s LMS bridge shines!

Get deeper access into an ever-growing lending partner ecosystem

FinBox spares platforms the difficulty of multiple integrations. One-time integration with FinBox enables them access to a whole ecosystem of lenders. Our proprietary LMS bridge offers platforms the flexibility to add or delete lending partners in just a click. 

FinBox’s LMS bridge is to credit, what a payment gateway is to payments. If you have a payment gateway, you don’t have to worry about integrating with multiple banks to process transactions. 

Similarly, if you have FinBox’s LMS Bridge, you get access to a whole network of lenders to process loan applications and build newer credit products. To know more about how FinBox powers embedded credit on digital platforms, visit https://finbox.in/products/embedded-finance/