udaanCapital’s proprietary risk algorithms leverage alternate datasets such as transaction patterns and trade invoices to pre-select borrowers, enhance lenders partner’s underwriting decisions and improve approval rates for borrowers by 35%. As a result, 97% of disbursed amount is collected before the due date from discretionary category retailers.
udaanCapital’s collections capability recovers the remaining dues. Collections are done through a tightly run multi-channel process spanning digital nudges, tele-calling & field visits. This operation is orchestrated by a case assignment algorithm and runs on an end-to-end tech backbone that manages a scale of nearly one million collection entries per month coming in from various channels. As a result, the company helps recover 99.5% of lender partner disbursals within 180 days from nearly 750 towns and 9000 pin-codes (nearly 50% of India’s pin-codes).
Another element that enabled smooth collections at scale has been the promotion of digital collections among small retailers by udaanCapital. 88% of retailers that use udaanCapital’s services have adopted digital payments. A number that was only 55% in 2020. Discretionary goods categories tend to have longer sales cycles – goods stay on store shelves for longer before they are sold. Therefore, retailers need to stock more inventory which in turn makes working capital access very central to operate and scale such stores. Investments & deep focus in solving core problems like risk assessment and collections have enabled udaanCapital & its lender partners enable credit access to such retailers.
Over one lakh stores across India dealing in discretionary products access credit through udaanCapital today. In FY22, more than 50% retailers of discretionary products on udaan platform are powered by credit enabled by udaanCapital. The base of users availing this facility also grew by 25% in FY 22. This has helped catalyze business growth on the udaan platform: retailers availing credit have 70% more ABS (Average Buyer Spend) compared to other retailers on the platform & repeat more often and stick to the platform for longer.
In a statement, Chaitanya Adapa, Head – udaanCapital, said, “The market gap in working capital availability for trade is still very huge. This gives us a lot of conviction that we are on the right path in helping reduce this gap. We will work with our lender partners and continue investing in core infrastructure areas like collections and risk advisory to keep chipping away at this problem.”