NewsX was recently joined by Vivek Naidu, Founder, MD, Hotfoot Technology Solutions, for an exclusive conversation as a part of its special series, NewsX India A-list wherein he talked about his startup organisation HotFoot, its role in the finance technology sector and how it is revolutionising lending in the country.
Talking about his organisation HotFoot, Mr. Naidu said, “Hotfoot is our company and RAPID is a Origination to Disbursement Platform, fundamentally focused on digitisation and automation of the loan lifecycle. Until recently most of the decisions on eligibility of the loan was a manual process, meaning, it was left to discretion of an one or more individuals at the Bank or NBFC – this was a valuable process until we got to becoming a data rich country and now it is not feasible for a person to process a large amount of data within a very small time frame and come up with a consistent decision. This is where we come in, for borrowers at the top of the pyramid who have documented proof of income and also for borrowers at the bottom of the pyramid who do not have proper documentary proof of income, our application RAPID will enable the lender to provide digital onboarding and automated eligibility within minutes, which will ensure the borrower will experience the same quality of service, the irrespective of where they fall in the income pyramid.”
Expressing how HotFoot is revolutionising the way lending is done in our country, Mr. Naidu said, “In many ways actually. For long it has believed that only borrowers with proper documented source of income are the most reliable in terms of credit worthiness , but the answer to that is mixed. The most important revelation is that borrowers who do not have the paper work are just as or even more credit worthy, but the challenge is how does a bank assess this consistently at scale. This is the part that we are set to revolutionise, we have developed a framework and an algorithm to assess income for close to 200 different profiles of borrowers and compute eligibility in a matter of minutes. Incidentally this is part of economy that has the highest potential for growth in the lending business.”
Hotfoot is up for an enhanced SaaS version of RAPID. Giving us an insight into the technology, Mr Naidu shared, “The SaaS version of RAPID has many highlights :
- This is an OPEX model meaning that the lender will has to pay only for the number of applications processed,
- There is no capital investment to be made upfront, so the investment will be significantly lower as compared to the licence
- Being a SaaS platform , the time to implement and go to market will be only a few weeks rather than months.
- Importantly the technology and capabilities that were available to large lenders due to their capacity to invest, (for example a Business Rule Engine) will now be available to small and medium sized lenders as well , with this they will be able to up their game and compete with the big players
- Lenders on our SaaS platform benefit from the regular updates in terms of features built as part of the product road map.”
Highlighting the achievements and aims of Hotfoot, Vivek said, “We are constantly focused on the user experience of the borrower , our aim is to provide the technology that will make quality credit accessible to all types of borrower’s, importantly to those at the bottom of the pyramid. Our achievements have been:
- We have built the rapid platform to cater to the most complex form of credit evaluation such as Affordable Housing Loans, SME lending, Vehicle Finance and Microfinance.
- We have been adjured the best lending platform for the past 2 years in a row by Banking Frontiers, a banking focused publication
- We have survived COVID , in fact we have grown our topline and added clients and employees, without any salary cuts.”
Sharing his vision for the company, he said, “We want to be the one stop platform for all needs of the lender from Origination to Disbursement and collections– where the lender will have to only worry about Credit Risk and provide Capital to lend. All other aspects – technology and manual activities will be addressed by Hotfoot.”
When asked if his organisation has faced any kind of regulation difficulties, Vivek expressed, “The reporting requirements are exhausting , but we understand that , more importantly what we require is consistency of regulation, there are too many and too frequent changes that hurst us and our clients in terms of investments made and when regulation changes and the investment is made redundant , if this consistent, it will help us a lot.”
Having featured as one of the top 10 tech startups, NewsX asked Mr Naidu what makes HotFoot unique. To which, he said, “Our people – there is hardly any loan technology vendor in the Fintech or CrediTech space who understand the domain as much as we do, most being focused only on technology. And we have married the two , our outstanding application of technology and intricate knowledge of the loan process make us immensely unique.”
Giving some solution for the inconsistency of regulations, Vivek said, “I think change is inevitable and some changes are good but that’s not the problem. What organizations need, is the time to adapt to those changes. If it’s announced in a roadmap manner, hopefully, we are not reactive. Realistically speaking, in the technology world, there are going to be outliers. Compared to the rest of the world, the framework under which we work is phenomenal and we are probably a decade ahead of many of the developed countries as far as data framework is concerned. So, the enforcement should be a little bit more phased”.
On being asked if HotFoot grown as per the predictions in last 4 years, Mr Naidu responded, “Yes , we have grown consistently, we have achieved a CAGR of 114% for the last 4 years and have achieved break even on target. 2021 -22 will the year that we achieve escape velocity and scale the business significantly.”
In the end, Mr Naidu shared HotFoot’s plans for 2021 and said, “As part of our vison, we have a product under in beta stages – called Omeno, this will allow us to embed Loan origination into the Distribution Channels , for which we are in advance stages of a pre-series fund-raise to fuel our business.”