Alok Mittal Revolutionizing SME Lending and Pioneering Profitability

Alok Mittal, the Co-founder of Indifi, has embarked on a mission to address the credit gap in India’s underserved SME and MSME segments. Founded in 2015 in Gurugram, Indifi is a lending start-up that has quickly gained prominence in the fintech landscape by providing financial solutions tailored to the unique needs of small and medium-sized businesses. Alok Mittal’s journey with Indifi began with a stark realization – approximately 85 percent of SMEs and MSMEs in India had limited or no access to formal credit. This credit gap translated to a staggering unmet demand for loans amounting to a whopping $397 billion in the SME and MSME sector. Alok, driven by a vision to bridge this gap, co-founded Indifi with Siddharth Mahanot.

The Indifi Approach: Collaboration and Innovation

Indifi’s approach to lending is rooted in collaboration and innovation. The company has developed a robust ecosystem that connects SMEs with a vast network of over 20 lenders, including their in-house NBFC, Riviera, and more than 80 partners. To date, Indifi proudly boasts of disbursing over 30,000 loans across 12 diverse industries, amounting to nearly Rs 1,500 crore in loans. Alok Mittal’s strategic approach to Indifi’s growth has yielded significant results. While the company has not achieved profitability yet, Alok and his team are focused on achieving this milestone within the next 12 to 15 months. One of their key strategies has been to prioritize unit profitability for every loan offered, recognizing that lending is not solely a lifetime value business.

Indifi’s journey towards profitability has been underpinned by three key pillars. First, the company tackled the underwriting challenge head-on, ensuring that they could effectively assess creditworthiness. Second, they strategically partnered with large online marketplaces, enhancing their scalability and outreach. Third, they embraced a supply-side model, allowing other banks and NBFCs to lend on their platform, thus diversifying their lending capital and reducing reliance on their own balance sheet. Indifi leverages data and technology to streamline its lending processes. The company integrates with various public data sources, such as bank statements, credit bureaus, tax returns, and India Stack, to gather comprehensive insights. Additionally, their platform features 30 spoke integrations with different multicast platforms, enabling seamless data sharing and accounting for both customers and merchants.

Riding the MSME Growth Wave:

The MSME sector in India is experiencing remarkable growth, and its contribution to the nation’s GDP continues to rise. Despite this, it remains an underserved segment, which Indifi is determined to change. The company has recognized that the MSME space is diverse, and its ability to serve various verticals effectively has given it a competitive edge. Alok Mittal is no stranger to entrepreneurship. Before co-founding Indifi, he was a founding board member of the Indian Angel Network (IAN) and co-founded JobsAhead, which was later acquired by Monster.com. After his corporate stint, Alok ventured into the world of venture capital with Canaan Partners, where he spent nine years. During this time, he identified SME lending as a significant untapped market opportunity, leading to the birth of Indifi.

Future Growth and Industry Leadership:

Indifi’s journey is far from over. The company has embraced the challenges posed by the COVID-19 pandemic as an opportunity to refine its credit algorithms and better understand its customers’ evolving needs. Expanding into new verticals, such as the pharma segment, demonstrates Indifi’s commitment to diversification and innovation.

Through Indifi, Alok Mittal is leaving an indelible mark on India’s lending landscape. His dedication to serving the SME and MSME segments, coupled with a relentless pursuit of profitability, sets an inspiring example for the fintech industry. As Indifi continues to grow, it’s poised to become a leader in the SME lending space, addressing the credit gap and empowering small businesses across India.