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Arohan launches digital lending app, plans to raise loan portfolio by ₹600cr

NBFC-MFI Arohan Financial Services introduced a digital lending app for its current clients with good repayment records to give them a banking experience on par with privilege banking, an official said. He added that another goal of launching the lending app is to “raise collection efficiency ratio.” 

The COVID pandemic has changed the fundamental business dynamics across sectors. The ApnaArohan app will help its customers make repayments and other transactions through the digital mode and reduce physical interaction with the MFI’s loan officers, according to Arohan Managing Director Manoj Kumar Nambiar.

The AI-powered app will provide the microlending company with the “first mover advantage” and assist raise the outstanding portfolio from Rs 4,500 crore as of June 2022 to roughly Rs 5,100 crore by the end of the current fiscal year, he said. 

According to Nambiar, this will also assist in completing the MFI’s digitalization of its disbursement and collection processes. 

He said the collection efficiency ratio dropped during the pandemic from pre-COVID levels of about 95% to about 60–70%.

“Now, this has stabilized at around 95 per cent,” the company official said.

He added that a credit scoring model developed by the MFI, supported by the Aavishkaar Group, is currently “under beta testing.” 

Since 2017, the MFI has been using the core banking platform. 

The MFI’s key investors are the Michael and Susan Dell Foundation, Aavishkaar Goodwell Fund II, and Tano Capital. It intends to raise Rs 1,800 crore from the market.

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