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  • Anjali Verma

How can NBFC Software simplify your lending operations?

Table of Contents:

What are NBFCs?

Difference between Banks and NBFCs?

Types of NBFCs

Examples of top NBFCs in India

Benefits of NBFC Software

Conclusion


In India, NBFCs, or Non-Banking Financial Companies play a significant role in fostering inclusive growth by meeting the various financial demands of people who are not bank customers. Additionally, NBFCs frequently take the initiative in offering Micro, Small, and Medium-Sized Enterprises, or MSMEs cutting-edge financial services that are best suited to their needs as a business. By boosting transportation, employment creation, wealth creation, bank credit in rural sectors, and support for economically underprivileged groups of the community, NBFCs play a crucial role in an economy's growth. Customers are also given emergency services including financial aid and direction in insurance-related concerns. A report by RBI Says that NBFCs’ credit to Gross Domestic Product (GDP) ratio boosted from 8.6% in 2012-13 to 12.2% in 2018-19 before moderating slightly to 11.6% in 2019-20 in the wake of the pandemic.


NBFCs contribute to promoting global economic growth by addressing several financial needs.

These financial needs may include:

  • serving the financial needs of SMEs,

  • creating more job opportunities,

  • lending in the local sectors, and

  • providing financial support to the underprivileged sectors of the overall economy.


The value of NBFC culture is growing quickly and abides by the guidelines established for the Indian Banking industry. Although NBFCs don't require a banking license for their services which include providing a variety of credit lines to their customers, peep-to-peer lending, providing insurance, and stock acquisition.


To provide better services to MSMEs, NBFCs need to be updated with their technology and use the latest technologies and software. Using software for NBFCs can improve the lending business as it:

  • Helps to increase productivity

  • Enhance effectiveness

  • Reduces extra workloads

  • Helps in overcoming operational obstacles

  • Helps in responding to loan requests quickly.


What are NBFCs?

Non-Banking Financial Companies or NBFCs refers to the company which provides financial services without any banking license.

A corporation organized under the Companies Act of 2013 or 1956 is referred to as a Non-Banking Financial Corporation. A non-banking company that does the business of a financial institution shall be an NBFC, according to section 45-I (c) of the RBI Act.

Additionally, it specifies that the NBFC must be active in the loan and advance industry and acquire stocks, equities, debt, and other marketable securities issued by the government or other local authorities.



Difference between Banks and NBFCs?

Bank

NBFCs

Regulated under Banking Regulation Act 1949

Regulated under Companies Act 2013

Transaction services are provided by Bank

Transaction services are not provided by NBFC

Bank create Credit

NBFC does not create Credit

Maintenance of Reserve Ratios is mandatory

Maintenance of Reserve Ratios are not required

Foreign Investment allowed up to 74% for Private Sector Bank

Foreign Investment allowed up to 100%


Types of NBFCs:


The NBFCs are divided into groups based on their activities and liabilities:

Examples of top NBFCs in India:

  • Bajaj Finance Limited

  • Mahindra & Mahindra Financial Services

  • Muthoot Finance Limited

  • Tata Capital Financial Services

  • L&T Finance Limited

  • Aditya Birla Finance Limited


Go through our blog to read more about the Top 20 NBFCs in India.


Benefits of NBFC Software:


Security and Transparency:

For NBFCs, these two factors are always of utmost importance. NBFC software manages databases to maintain security by encrypting databases at a high level. Customers have access to their accounts and the administrator controls which user groups have access to which data in the software. Customers can only access their accounts after having their passwords verified. The program makes operations transparent and is simple to implement.


Strong system:

NBFC Software's strong features allow it to manage complex databases with ease. The software makes it simple to export reports in Excel, Word, or PDF formats for later use. With NBFC software, loan EMI calculations are also simplified and made more precise.


Highly Customizable:

Software for NBFC can be customized to a user's specifications. In addition, the program allows you the option of expanding the system with new capabilities as the business grows its offerings. The availability of personalized mobile applications increases the client's access to services. The likelihood of NBFC expansion is increased by the use of mobile apps and other technical developments in the NBFC industry.


Simple to use:

NBFCs can access their software from any location. As a web-based real-time system, it speeds up reaction times and provides immediate services. Customers receive emails and SMS reminders regarding the due dates. Customers may access the NBFC software instantly, which increases openness in the organization's business practices.


Conclusion:

NBFCs always need to adopt the latest technologies and software to serve their customer well. As manual work protocols are mostly ineffective and impactless, using the correct software will always improve productivity.

The cost of NBFC software varies from vendor to vendor, but you must pick the finest one for your organization's requirements.


SynoFin excels in working with NBFCs of all sizes. The wide range of products in its stable ensures that NBFCs can depend on the services given by SynoFin for their digital consulting needs in every stage of their growth. SynoFin is enlarging its horizon or outlook to provide IT solutions to NBFCs.


The product suite includes:

Syno LMS: The most configurable Loan Management System for FinTechs.

SynoLOS: Comprehensive loan origination system for NBFCs.

SynoCRM: NBFC-focused CRM solution with rich workflows

SynoFin Expense: End-to-end solution for managing branch petty cash & employee conveyance

SynoFin Sales: Digital onboarding platform for the field sales team

SynoFin Credit: Mobile app for field credit team for personal discussion

SynoFin Collections: End-to-end collections management system

SynoFin Customer App: Customer app to manage leads & customers from onboarding to repayment

SynoFin BI: Business dashboards with deep drill-down features

SynoCKYC: Integrated solution to manage CERSAI CKYC registration

SynoSupply Chain Finance: Invoice discounting, Vendor finance. End-to-end workflow

SynoFin DocScan: Cloud-based DMS to manage documents with restriction-based access

SynoFin DSA: Mobile and web-based solution for DSAs for better collaboration and payouts

SynoFin Treasury: Treasury management solution for NBFCs

SynoVein-Vendor management: Vendor management suite for FI, RCU, Legal, Technical

SynoDataflow: Middleware to manage enterprise-wide integrations

SynoCDP: Common data platform where we create a data lake for enterprises

Underwriting engine: Business rules engine to quickly configure underwriting rules


Visit SynoFin to know more about us!


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