One of the leading Indian Financial Institutions, Mahindra Finance, is looking to evaluate innovative fintech solutions for its SME financing business through an innovation challenge.
Fintech firms may respond to the challenge with an implementable solution aligned to any of the below mentioned SME-focused categories. The aim of the challenge for Mahindra Finance is to assess the solutions and execute proof of concept with the promising ones.
Mahindra Finance started providing customized lending solutions to MSME customers since 2011, through its Business Enterprise and Retail Enterprise verticals.
Mahindra Finance’s Business Enterprise vertical focuses on customers of Auto Ancillary, Light Engineering, Agro & Food Processing sectors having a turnover between INR 20 Cr and INR 500 Cr. The product portfolio includes Working Capital Loans, Bill Discounting, Pre-shipment Finance, Term Loans, and Equipment Loans.
Mahindra Finance’s Retail Enterprise vertical focuses on smaller enterprises with a turnover of less than INR 20 Cr which typically are Proprietor driven/ Partnership firms. Here, they provide Secured Business Loans and Equipment Loans based on surrogate assessment of customer’s credit profile and through parameterized lending. Additionally, this vertical provides inventory financing solutions to vehicle dealers and other Channel partners.
We are looking to enhance our customer experience through innovative offerings. The Mahindra Finance SME Fintech Challenge is a step towards finding existing solutions which we can adapt to improve our customer’s experience and solve their pain points. We are excited to launch the challenge in partnership with KPMG and Matchi, to further innovate and reach out to creative minds from across the world.
R. Balaji - Head, SME Finance at Mahindra Finance.
The Mahindra Finance SME Fintech Challenge will launch on Wednesday 19 October 2016 and close for entries on Monday 14 November 2016 at 23:59 CET (Central European Time). Eligible fintech solution providers can enter this challenge for free. The challenge is open to all firms around the world who have developed and built solutions that align to any of the following categories.
Category 1: Real Time Credit Risk Assessment
Description: Require a system which enables near real time credit risk assessment
The solution could have a combination of some of the below functionalities:
A built in learning model with pre-defined data points customizable as per requirements
Indicators to provide information on funding eligibility, sure rejects etc.
Analysis on Qualitative/Quantitative data(e.g. psychometric analysis/social data/ online data/ non-financial data etc.)
High accuracy in pre-credit decisioning
Integration with third party data sources such as (VAT/Service tax, forensic, RBI defaulter's list and other legal sites)
Category 2: SME Risk Monitoring
Description : Require an early warning system to predict increase or decrease in stress for a SME account
The solution could have a combination of some of the below functionalities:
The input data comprises of financial/non-financial parameters
System makes use of operational data of the customer such as inventory details
The Data model comprises of lead indicators
System captures industry trends and draw relevant insights
Possibly utilize external data inputs such as regulatory portals, government portals etc. to generate early warning signals
System accepts inputs from SME’s ERP/Accounting system
Category 3: SME Cash Flow Management
Description: Require a Digital solution for SME customers for cash flow management to help them understand the investment and liability position. [Business scenario: Currently SMEs have 1 or 2 large customers and are dependent on inflow from them. Hence accurate depiction of their cash position comprising of investments that can be made and liabilities to vendors will help to optimize their cash utilization]
The solution could have a combination of some of the below functionalities:
The system provides a group/companywide visibility of the cash position
Ability to integrate data from multiple sources to track customers debt, investment, account balances and credit lines
Ability to predict cash and liquidity forecasts to cover deficit and investment needs
Personalized MIS reports and configurable dashboards
Entry to the challenge is exclusively through the Matchi portal at matchi.biz/mf-challenge
On the Matchi site, fintech firms can find details of exactly what the sponsoring organization is looking for. Prospective entrants can then login or sign up to submit an overview of their innovation and the motivation to apply for the challenge.
All entries received by the cut-off date of 14 November 2016 will be validated by Matchi analysts and then individually scored by a panel from Mahindra Finance, KPMG in India and Matchi on the following criteria: Potential business impact (revenue, cost or efficiency), ease of implementation, Novelty/innovativeness and solution fitment.
Preference will be given to solutions that have successfully case studies of completed proof of concept (PoC) and implementations, especially in developing markets. Also, important is the time and effort it would take on average to complete a POC.
At the end of the challenge, shortlisted solutions will be invited to give presentation to the final judging panel on 28 November, 2016.