Launched in 2017, spocto has been associated with some big lenders in the UAE. But this is the first time it has picked up an international license. Image Credit: Shutterstock

Dubai: Are you having trouble convincing banks to lend? Or offer a bigger credit limit than what banks are willing to extend?

An Indian fintech that specialises in credit risk mitigation is ready to help you and the bank meet at the halfway point. “If you look at platforms such as BNPLs, which are mostly small loans, the average loan period in the UAE is about 90 days,” said Sumeet Srivastava, founder and CEO of spocto. “However, for large loans such as to a small business, personal loans, mortgages and credit cards, product-specific adjustments are required.

“Due to a lack of advanced data analytics, transparency, and technology, lenders are often overcautious and reluctant to change collection mechanisms.

“We look at collections at a micro-segment level - and we have been very successful with it. We use technology to target much smaller and more narrowly defined groups of customers. In the UAE, for example, you cannot lump everyone together - borrowers who have been in the country less than six months and others who have been here longer must be evaluated accordingly. We provide lenders with real-time access to make this decision.”

“This will also help to further improve the integrity of the lending ecosystem and encourage lenders to revise loan terms for individuals and small and medium enterprises (SMEs).”

Credit is at the heart of most customer relationships, and digitising it offers significant benefits for both banks and customers

- Sumeet Srivastava, Founder and CEO of spocto

First international license

The firm spocto has been in operating in the UAE for four years, and has signed up with a couple of leading local banks such as Emirates NBD and Mashreq. Now, it has upscaled operations, getting its first international license from DIFC.

spocto could not have chosen a better time to enter this market. Banks and other lenders are tightening the norms on retail and small business exposures, and at a time when the raft of interest rate hikes have made customers queasy about signing for higher cost borrowings.

“We are in the retail space, where we are digitally transforming the entire lending experience, including customer relationships, and supporting credit decision processes for lenders,” said Srivastava. “Credit is at the heart of most customer relationships, and digitising it offers significant benefits for banks and customers.

“As a platform, we seek to leverage this evolution to bridge the gap between lenders and borrowers, while maintaining traditional methods and customising communication through an omnichannel approach.

“Whether through a chat or a call, we can help lenders improve customer engagement by introducing a digitally-focused approach to risk mitigation in the UAE banking and finance landscape.”

The spocto model

The fintech’s platform makes use of ‘more than 5,000 proprietary algorithms’ and tacks on Machine Learning (ML) and predictive AI to ‘extract insights from otherwise ambiguous data’. If at the end of the process, banks have a better grasp of whether – and how much – to lend to the client, spocto’s work would be done.

The company was launched in Mumbai in 2017 by Sumeet and Puja Srivastava. spocto processed loans worth $25 billion through the collection of 35 million accounts in the financial year 2022.

“We use ML-based predictive and prescriptive analytics, including technographic, psychographic, demographic and sociographic insights to predict behaviours – and improve customer engagement,” said Srivastava.

“With early warning systems, better underwriting tools, fraud detection, account monitoring and more, we enable lenders to take on more risk and give larger tenure loans.”

And those aspiring for a bank loan in the UAE will be fine with that.

Yubi buys
spocto was involved in a deal earlier this year that saw the Indian unicorn, Chennai-based Yubi, acquire 75% in the company.