Capital Trust reports robust growth in Capital Digital Lending Portfolio with AUM of Rs147 crore in Feb 2022; Stock jumps 4.5%

10 Mar 2022 , 11:37 AM

Capital Trust Limited has reported robust growth in the Capital Digital Lending Portfolio (CDL) with an AUM of Rs147 crore as of 28th February 2022. The collection efficiency remains north of 98% for the Capital Digital Loans portfolio. 90+ DPD and 30 DPD stood at 2.7% and 3.9% respectively as on February 28, 2022.

Salient Features of Capital Digital Lending product
Complete Digital process encapsulates every step: From documentation & paperwork to onboarding and disbursement. First mode of repayment for all clients is NACH, in addition the Payment Gateway has been enabled to all the customers through the Company’s App and payment link.

Automated disbursement mechanism: Decision of lending is done on the basis of a borrower’s Credit Scoring, Income, Credit History and Debt servicing capacity. The engine further calibrates for regional differences in performance using pin-code level data.

Ticket Size & Tenure: The Ticket size of this product is at Rs30,000 — 50,000 making it accessible across a broader customer base. Short tenure of 12-18 months makes the repayment faster.

Return Accretive: Overall, NIM’s for this product are higher than the Company’s traditional portfolio. The Company has been focussing on increasing this product base to a more broader market across existing and new geographies.

Enabling digital integration by blending with physical approach: While the processes remain digital, to maintain stringent quality checks, physical visits are also conducted, enabling independence between credit officer’s data entry and the backend automated decision making process. The credit officer’s role primarily is to propose a case with the system having final decision power. AI and Business Intelligence is used to automatically calculate the applicant’s household income based on standardised business size, industry margin and expected expenses.

Collection efficiency for the Company was robust despite three covid waves, whereas in contrast the industry struggled with collections. For better collection efficiency, all NACH uncleared cases are automatically mapped to the collection staff and visits are schedule on an automated route map via AI enabled geo tagged route mapping. Client Communication is institutionalised through SMS / OBD / telecalling /physical visits. The risk control department continuously analyses the payment schedule and the risk profile of customers so that the team is more focused on recovery efforts for customers with higher risk. Overall, 29-30 cumulative collection follow ups done to an unpaid client per month.

Commenting on the performance, Yogen Khosla, Managing Director, Capital Trust Limited, said, “We started capital digital loans in FY2019 and since then, it has scaled up significantly. The Rural doorstep fintech model remains robust with lead processing time being less than 24 hours. 100% of these loans are disbursed digitally and more than 70% of the collections are made by date of NACH clearance (through automated clearance or advance collection), which helps reduce the operational costs and offers better convenience to the customers.

Moreover, it also helps faster repayments thereby reducing defaults. With a significant number of traditional microfinance customers graduating to the next economic level each year, our Capital Digital Loan product is able to provide them a quick turnaround with digitally enabled loan and no requirement of centre meetings. The company has also started offering a revolutionary interest-free Quick Digital Loan of Rs. 5000 with a tenure of 3 months last quarter and has seen good traction. We remain quite positive on the growth of Capital Digital Loan portfolio.

The Company remains committed to all its stakeholders to create sustainable value and focus remains on rural doorstep fintech model which will lead to further improvement in collections. We are constantly innovating new products to serve the bottom of the pyramid, which will help in inclusive growth and create value to Capital trust stakeholders”.

At around 11:41 AM, Capital Trust was trading at Rs115 apiece up by Rs5 or 4.55% on the BSE.