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actyv.ai's BNPL solution makes working capital loans accessible for SMEs and their channel partners solving a critical credit problem in the market.

Imagine a four-wheeler. For the vehicle to run smoothly, the engine needs to be in working condition. The tyres need to be maintained for friction-free movement. Its steering and suspension systems need to be monitored. In addition, the car needs to undergo annual maintenance to offer the best mileage in that category. So, for the system to work seamlessly, it needs to be a well-oiled machine.

The same holds true for the business ecosystem, too. Large enterprises need channel partners to expand their distribution, while these partners need big companies to improve sales. An effective Payment mechanism which enables these stakeholders is the Banking layer which includes Transaction Limit etc.,

Considering the nature of small and medium enterprises (SMEs), there is no fixed number, as far as funds are concerned. Depending on the cost of the raw material and business demand, capital requirements vary.

One thing is certain. SMEs often need immediate capital for business needs. The needs could be anything from making vendor payments to logistics to buying additional inventory.

But more often than not, instant credit is not available. Without a deep dive into the financial background of the SME, which takes several weeks, banks cannot offer loans. Instant access to credit for SMEs means that the distribution architecture of a larger enterprise is enabled and empowered.

This is where actyv.ai's BNPL model comes in to help. Our technology layer embedded in the traditional banking system generates an actyv Score based on the financial health of the SME. This gives the financial institutions the confidence to underwrite buy-now-pay-later (BNPL) for such firms.

Our tie-ups with banks let us support you and your business with unsecured, closed-loop, low-interest credit so you can continue growing without worrying about securing funds.

How our BNPL model works

By definition, bank loans require due diligence. Underwriting officers examine the loan-seeker applications and review bank statements and tax records. After a few weeks, a decision is taken on whether to sanction the loan. Cautionary approach due to delinquency worries can be addressed via adequate, simplified understanding of a prospective borrower’s capacity and intention to pay via the actyv.ai platform.

Here’s how our process works:

  • Using artificial intelligence, our platform generates a credit score for SMEs. This credit score is then used to draw up a credit limit in the range of Rs 50,000-1.5 crore for the entity.
  • Based on the actyv Score, banks offer unsecured closed-loop credit to the partners in the B2B segment.
  • The BNPL application is submitted to the bank through our platform, with no manual intervention.
  • Since the data is Digital, there is no room for errors. This enables banks to offer affordable interest rates.
  • Once BNPL is active, the enterprise can ‘pull’ necessary payment from the credit account against the invoice.
  • There is no Recourse to the Enterprise.

actyv.ai enables banks to underwrite loans through our own scores as we can capture historical transactional data. Getting quicker access to credit means that business can begin immediately.

In addition, predictive models for SMEs are also getting built as an additional feature. Being the technology layer of the financial product, our AI-led solution is orchestrating payments for the future.

First-mover advantage

Even before the onboarding stage, actyv.ai assists larger enterprises by conducting an AI-based fraud check on prospective partners. Once the enterprise is closer to a decision, we provide an evaluation report that will help to bring the most compatible partner on board. Finally, any partner brought on board will be signed on through digital contracts that Actyvi.ai verifies.

Since the SME is already verified at the onboarding stage, the BNPL process is further simplified.

Larger enterprises usually take the burden of providing capital to their channel partners themselves — offering extended credit periods and potentially running into losses themselves to keep the business afloat. Our BNPL helps to minimise these risks.

Currently, BNPL is non-existent in the SME segment as it requires a good amount of data visibility and process.

Our goal is to help enterprises and their SME partners achieve their full potential without worrying about working capital. The BNPL solution and actyv Score are just a few steps towards that endeavour.

We believe we can help your channel partners swiftly secure capital. Check out our solutions and contact us to know more!