Indian fintech spocto wants to make it easier for UAE banks to lend

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

“We look at collections at the micro-segment level – and we’ve been very successful with that. We use technology to target much smaller and more narrowly defined customer groups. 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 assessed accordingly. We give lenders real-time access to make that decision.”

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

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

– Sumeet Srivastava, founder and CEO of spocto

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

spocto could not have chosen a better time to enter this market. Banks and other lenders are tightening norms on exposures to private customers and small businesses, and at a time when the flurry of interest rate hikes has made customers uneasy about signing up for higher-cost loans.

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

“As a platform, we seek to leverage these developments to bridge the gap between lenders and borrowers, while maintaining traditional methods and customizing communications 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’s banking and finance landscape.”

The fintech’s platform uses “more than 5,000 proprietary algorithms” and leverages machine learning (ML) and predictive AI to “extract insights from otherwise ambiguous data”. If, at the end of the process, the banks have a better understanding of whether – and how much – they should lend to the customer, spocto’s work will be done.

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

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

“With early warning systems, better underwriting tools, fraud detection, account monitoring and more, we’re enabling lenders to take on more risk and make bigger loans.”

And those who want a bank loan in the United Arab Emirates will do just fine with it.