Product Overview

Shivam Finance is a private lending firm operating in the Bhilwara district in Rajasthan. It offers loans for buying two-wheelers to the customers of the nearby districts. The firm has applied for a nonbanking financial company (NBFC) licence as the regulations changed, and it became difficult for the firm to operate in the two-wheeler financing space as a private lending firm. With the NBFC licence, the firm planned to scale up its operations and adopt a fintech-based model. The case revolves around the future strategy that Shivam Finance would adopt to transition into a fintech-based model, given the regulatory and customer adoption challenges. Key questions addressed include the following: What will be the risks and challenges in implementing a fintech-based model? How will it help in bringing more dealers and customers onboard? What aspects of fintech would be required for the creditworthiness appraisal, disbursement and collection processes? Given the current customer behaviour, how could Alok Bhandari ensure that the transition into fintech enhanced the customer acquisition outcomes amongst present and a new set of customers? How will the firm resolve the potential skill gaps related to the change in the business model? The crux is how a private lending firm transitions into a fintech-based NBFC, given the challenges within the firm and changing legalities in the Indian auto financing space.

Learning Objectives

To get exposed to the Indian two-wheeler market in India and to understand the customer behavior of the two-wheeler buyer. To understand the business model of Shivam Finance and the challenges facing them. To understand the emerging fintech technologies for NBFCs To understand how Shivam can use a Fintech based model to enhance its outcomes in creditworthiness appraisal, in customer (and dealer) acquisition, in loan disbursements and in recoveries.