Online lending players tweak SME loan underwriting as credit moves online

Players are tweaking basic, online underwriting norms to ensure consistency and thereby reduce NPAs

The small and medium enterprises have been increasingly logging in to secure funding via online platforms. As more and more SME players move online the players are also tweaking the basic, online underwriting norms to ensure consistency and thereby reduce NPAs in this segment.

Experts explain that in physical underwriting, a bank looks at the company's bank statement, total number of credits/debits, cheque bounces and average balance which is calculated on proxies on three days in a month. While in case of online underwriting, the actual average balance gets captured. The difference can be up to 50-60 per cent.

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