How FinStack helped Prabhaav Loans achieve ₹120+ cr disbursals in their first year of launch

Western Capital team recognised the need of digitalization as a key tool in their arsenal to meet their goal FY 24-25 of disbursing over ₹800 cr under WCA and Prabhaav Loans together with ₹100 cr coming from Prabhaav Loans (powered and digitised by FinStack) independently. To achieve these goals, Prabhaav loans needed the following:

• Assuming the typical loan amount in the range of ₹ 5-10 Lakhs, approximately 1500 loans needed to be disbursed.
• This could only be achieved by geographical presence in multiple states each having multiple branches.
• Naturally, this would imply having 100s of relationship managers spread across branches.
• Unlike unsecured loans for Tier 1 geographies, Prabhaav Loan's offerings were driven by operational excellence with orchestration of internal and external Field Inspection, Legal, Technical and RCU agencies.
• A nuanced Credit Appraisal process that gave them ability to underwrite various kinds of borrower profiles - each with a specialised CAM along with approval authorities, asset assessment and hypothecation processes that varied across geographies.

It was difficult for Nilesh to find a Loan Origination System (LOS) provider who could keep up with Prabhaav's growth, ambition and nuanced operations. Most solutions either required them to adapt to their rigid workflows and processes or failed to provide a customisable and configurable solution that required multiple months of development efforts to meet the rapidly changing and growing needs of the lender.

In May 2024, WCA discovered FinStack and immediately saw the potential in FinStack's No-Code Loan Origination System (LOS). In the months of June and July, multiple detailed demos and Proof of Concepts (POCs) were conducted. They recognised that customisations and changes which would require development efforts with other LOS vendors would be simple configuration level changes at FinStack.

The POCs concluded with a gap assessment report on FinStack's capabilities to serve secured loans but the merits of FinStack's no-code approach outweighed the gaps. In July'24, a deal was struck and FinStack became Prabhaav Loan's official Loan Origination System (LOS) provider.

The mission was clear - to bridge the gaps in FinStack's product capabilities while keeping WCA's business goals as top priority. This implied mutual coordination between the organisations to recalibrate, reprioritise and improvise the development in a manner which would develop a fully customisable and configurable LOS - from lead generation to approval, sanction, mandate setup and loan management system (LMS) push.

In August, collaborative groundwork began, including onboarding for Relationship Managers (RMs), while building critical LOS features for the scheduled launch in September when the RMs would start onboarding borrowers.

The initial aim was to be live with 5 branches in September. However, after looking at the initial success, FinStack's digital onboarding was live in 27 branches in the first month itself!

A similar trend was observed for the RMs. The faster turnaround time, seamless onboarding process and quick technical support from FinStack made it lucrative for the RMs to onboard leads for Prabhaav Loans.

By the end of March'25, Prabhaav Loans was active in 4 states, with 42 active branches, over 150 RMs actively onboarding leads with more than 400 users processing the leads on FinStack's LOS.

The borrower demand was impressive. There was an average 43% MoM growth in the number of leads that showed interest in applying at Prabhav Loans, along with an average of 40% MoM growth in the pre-qualified leads. The average MoM growth in the number of borrowers who further paid the Initial Money Deposit (IMD) was an impressive 23.8%.

The stellar growth was complimented by FinStack's active performance improvements under the hood to ensure that tech was never a bottleneck to achieve Prabhaav Loans' targets.

The gains in efficiency and improvements in turnaround times for loan approvals were palpable to the entire organisation. There was an average 65% MoM increase in the number of loans approved. These benefits trickled down to the RMs who were now seeing 3.67 times higher loan approvals in a month by the end of March'25.

Fast forward to the end of FY24-25 - Western Capital beat their own estimates by having combined disbursements of ₹1010.96 cr of which ₹123.6 cr were contributed by Prabhaav Loans alone. Their AUM stood at ₹ 701 Cr of which ₹ 121.54 cr was contributed by Prabhaav Loans.

The goal for FY25-26 is to further build upon this strong foundation of success. The goal is to grow 5x and FinStack is ready for the challenge! Our aim is to not just reach the state of the art but also to set a new benchmark for it - to build innovative products that rely on parametric alternate data to transform the underserved MSME market in tier 2 to tier 6 geographies in India.