Picture this. A small and medium enterprise (SME) is all set to partner with an FMCG company. The SME has potential but the onboarding process is cumbersome. Verifying the SME’s documents, sale numbers, profitability, infrastructure and quality metrics, will take a few weeks for the Large Enterprise. But this isn’t adequate. The SME will then need Capital to start its business, so another set of verifications becomes mandatory for sanctioning credit through a FI. This means for things to get started, it may take months.
For India’s 43 million small and medium enterprises (SMEs) and their large enterprise partners, forging new business deals can be anxiety-inducing. The sheer time and documentation required to process each transaction are mind-boggling. Incorporation documents, KYC, business licence, two years financial documents, directors’ background, GST records — these are just a few of the hundreds of data points that need to be submitted by SMEs.
The longer the delay, the further payment realisation is. Larger enterprises suffer, too, since their business cycle gets affected.
What if technology could bridge this gap? This is exactly the problem that actyv.ai set out to solve. By ensuring faster onboarding and quicker access to credit, actyv.ai is the technology layer that enables ease of doing business with SMEs.
Through our actyv Score, we offer a comprehensive credit score based on financial data and business documents. This score can then be used by financial institutions and large enterprises to make appropriate decisions.
So, what is the actyv Score?
actyv.ai is the technology layer for all business-to-business (B2B) payments. Using artificial intelligence to map the creditworthiness of SMEs, we enable instant limit sanctions by banks. Through this, we are building the future of payments for the entire ecosystem.
The actyv Score uses information shared by the SME to bring out a score. Weightage is given to factors such as Financial Management, Financial Standing, Insurance risk, Revenue potential, Stability, and financial standing. We examine bank statements, tax data, as well as the SME’s existing bureau credit score, to bring out a holistic actyv score.
This isn't a one-and-done report. We can re-generate reports periodically to take into account the SME's growth and/or changes in their business.
One of our most important features is the ability to calculate a credit limit that's unique to each enterprise. That way, an SME is not bucketed into a standard sanction limit.
Filling the funding gap via AI
Access to capital has been a pain point for SMEs in the country. In fact, a study showed that SMEs lose a whopping Rs 67 lakh every year simply due to relying on outdated financial processes.
Through our solutions, SMEs can consolidate their financial data with ease. This is because we go to enterprises at every stage of the supply chain. From onboarding to recurring payments, the entire lifecycle of an SME is made seamless through our AI-based technology layer.
Through the actyv.ai platform, conventional and traditional banks can accelerate their digitalisation and thereby tap into the ocean of lending opportunities for SMEs which shall also benefit by easy access to low cost capital. According to a report, “the sector only receives 16% of total Indian bank lending”.
For lending to emerging businesses, standard credit bureau scores may not be adequate. An accessible solution to provide working capital to SMEs in a secure yet new way is to collaborate with providers like Actyv.
When banks work with us, they can improve their underwriting with working capital loans, expand their base, and be mindful of their loans. In addition, a purpose-based credit would also reduce any bank's risk of NPAs (Non-Performing Assets).
Some of India's biggest banks — Axis Bank, Kotak Mahindra Bank, HDFC Bank — work with us to support SMEs using our buy now pay later (BNPL) model.
When credit access is simplified, not only can SMEs expand their business aggressively, but also give enterprises who work with them the freedom to be ambitious and look at larger markets. At a time when the SME sector, employing 40% of the country’s workforce, is taking rapid strides towards expansion, there is an urgent need to remove impediments to growth.
actyv.ai can make your enterprise navigate business seamlessly. Check out our solutions and contact us to know more.