IIFL partners with FinBox to digitize credit access for MSMEs

By Leandra Monteiro

IIFL Finance an Indian finance and Investments Company has partnered with Bangalore and Gurgaon-based FinTech, FinBox, to offer digital credit products to its merchants. The investment services company will offer digital credit avenues to its merchants, B2B e-commerce traders, using FinBox’s embedded buy-now-pay-later (BNPL) and working capital credit products. Through this partnership, IIFL and FinBox will disburse INR 10 billion in loans over the next 2 quarters, through a completely digital model.

Rajat Deshpande, Co-founder and CEO of FinBox said, “The FinBox Embedded Finance Platform powers credit on multiple B2B E-Commerce and retailer aggregator platforms. Partnering with IIFL provides us the flexibility and agility to launch innovative credit products for merchants at best-in-class rates. BNPL credit is the lifeblood of B2B E-Commerce and trade. Just like cash-on-delivery kickstarted the Indian B2C E-Commerce story, seamless access to cash flow-based BNPL financing is fueling B2B E-Commerce.”

“Partnering with FinBox enables us to access borrowers through its deep partner network with a single integration and offer our credit products digitally. We have collaborated deeply with FinBox’s low-code platform to make our lending process entirely digital and hassle-free,” said Sanjeev Srivastava, Chief Risk Officer, IIFL.

“Additionally, FinBox’s proven AI/ML powered underwriting capability enables us to extend credit even to MSMEs with thin-to-no credit history. We are launching multiple new-age credit products for the retailer and MSME space through the FinBox Embedded Finance Platform,” Srivastava added.

B2B BNPL is garnering increasing attention globally as people shift their purchase and expense habits owing to COVID-19’s repercussions on liquidity. BNPL products enable merchants to manage fluctuations in demand, keep a well-stocked shop, and expand as needed during the festive season, all the while reducing cash collection and logistics complexities for their distributors.

Using the FinTech startup’s offerings, lending organizations can benefit from lower costs per loan, thereby increasing their profitability by as high as 55%. Lenders, NBFCs, banks, and start-ups in the space have also reduced delinquency/default rates by 22% owing to the FinTech’s low-code, high-efficiency tech stack that brings precision and credit data from over 10,000 data indicators.

“Our partnership-driven model enables us to incorporate platform data to create innovative credit products that engender a win-win dynamic between digital platforms, borrowers, and lenders,”  added Rajat Deshpande, Co-Founder, and CEO of FinBox. “Embedded credit is the next big wave in FinTech. This partnership will play a crucial role in transforming the credit ecosystem in India”