Algorithm is the Boss

Irem Sayeed, Chief Credit Officer at U GRO Capital, dwells into business focus and modernization at the lender:

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Manoj Agrawal: What are the approval rates for loan applications at U GRO Capital?

Irem Sayeed: Ours is a very robust system built on a scientific way of selecting borrowers. Our approval rates are very conservative - it hovers around 27% of the logins. Most of the rejections happen before any manual intervention takes place, ie, the entire underwriting process is such that the first part of it is done by algorithms, and then later, individuals are involved to go and meet the customers and evaluate them. So, before it comes to human intervention, 50% of the applications are already filtered out based on a scorecard that we have developed in-house. In fact, we've applied for a patient also for this. The initial screening is based on banking behavior, banking practices and also on their past repayment behavior, which is obtained from the bureaus.

What are the business expansion plans?

Our focus has been and will be on MSME sector. We have customers for small ticket loans (secured & unsecured) in the smaller towns. We started expanding this in December 2020 and had all our branches and people in place by the end of December 2021. Currently we have micro branches in Rajasthan, Gujarat, Tamil Nadu, Karnataka, Andhra Pradesh and Telangana states. We will be focusing on growing business in these branches. We are also evaluating expanding small ticket loans in some other states.

Do you reach out to potential customers using seminars or workshops or training programs?