Enhancing Loan Origination Efficiency with a Custom App

Business Opportunity

Custom App for Loan Processing

The client is a Bengaluru-based microfinance institution focused on empowering underserved women in rural and semi-urban India. Established in 2008, it operates over 1,645 branches across 22 states and 1 union territory, serving over 3 million customers. With assets under management, worth about $1,705.35 million as of March 2024, the company offers financial products to support women’s economic independence and entrepreneurship. 

Their digital offerings included a web application, which was largely built on third-party services and processed their customer applications for loans. However, the client wanted to elevate their digital platform and boost accessibility for those looking for financial assistance. 

We transformed the client’s in-house Loan Origination System (LOS) via a mobile and web application, streamlining loan processing and reducing fraud risks. The customizable, scalable solution enhanced operational efficiency, enabling faster approvals and seamless onboarding of new products, like the dairy cattle loan for women in rural areas.

The Challenge

The client faced major challenges in providing a more refined customer experience. Key challenges included:

• Limited Accessibility for Field Agents: Without a mobile solution, field agents faced challenges in capturing customer data in real time, leading to delays and inaccuracies in loan processing. 
• Dependence on Third-Party SaaS Applications: Limited control and customization of services such as credit scoring and CDD from third-party SaaS apps
• Missing Validations: Without the right validation capabilities in place, the client had to deal with increased instances of fraud.
• Incorrect Details:  The loan applications required follow-ups for missing or incorrect details, reducing efficiency.

Our Solution

We developed the client’s in-house Loan Origination System (LOS), which facilitated the secure and efficient processing of applications, reducing the risk of fraudulent activities. The application serves as a customizable and scalable LOS, enhancing operational efficiency and enabling faster approvals of loans by the client’s employees. The application onboarded the client’s product, the dairy cattle loan, which provides unsecured loans to women in rural and semi-urban areas involved in dairy development activities.

The solution includes a comprehensive set of features to streamline loan management. It enables users to initiate and manage the entire loan journey, from application to disbursement, with configurable parameters to adapt workflows to specific business needs. Master management ensures centralized handling of critical data, while customer and loan search functionalities provide quick access to profiles and details. We enabled dynamic form rendering which allows the app to render the different application forms based on configuration. 

The platform supports log viewing for audit compliance and offers robust reporting capabilities for insights and performance tracking. Additionally, role-based access controls enhance security, and features like “Platform and Milk Collection Centre(MCC)” creation facilitate business scalability. The solution also allows for efficient reassignment of loans to optimize agent workloads and improve operational flexibility. It has allowed the Financial Service Institution to forego third-party services.

Results

• Accelerated Loan Processing: Improved processing speed by nearly 30%.
• Optimized Operational Efficiency: Achieved a 25% reduction in operational costs.
• High Volume Loan Management: Processed over 50,000 loans within 6 months (estimated).
• Enhanced Customer Experience: Streamlined processes improved user satisfaction.
• Improved Productivity: Optimized workflows boosted operational efficiency.
• Increased First-Time-Right Percentage: Reduced rework through accurate and efficient processes.
• Strengthened Compliance: Ensured regulatory adherence and minimized fraud risks.
• Accelerated Time-to-Market: Enabled rapid onboarding of new products using the scalable platform.

Power of Partnership

For this implementation, Niveus leveraged its deep industry expertise to deliver a customized and scalable Loan Origination System (LOS) tailored to the client’s unique requirements. We ensured seamless integration of a secure mobile application with the in-house LOS, enhancing operational efficiency and customer experience. Our team provided end-to-end support, from designing and implementing the system to optimizing it post-deployment, ensuring a smooth transition from the legacy system. 

With a focus on security and compliance, the LOS was built to meet industry standards while reducing the risk of fraudulent activities. The agile platform enables the rapid onboarding of new products, helping the client stay responsive to market demands and achieve faster time-to-value.

Benefits of Application Modernization

• Faster Time to Delivery: Streamlined processes and agile development resulted in quicker deployment.
• Increased Customer Lifecycle Value: Enhanced customer experience and operational efficiency led to stronger, longer-term relationships.
• Improved Turnaround Time: Optimized workflows reduced processing times, accelerating loan origination.
• Decrease in Number of Breaches: Stronger security measures and compliance protocols minimized the risk of breaches.