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WheelsEMI is a Non-Banking Financial Company (NBFC) headquartered in Pune, India. The NBFC specialises in a very niche segment – financing of pre-owned two-wheelers. Founded by four veterans from the lending industry who identified that the pre-owned two-wheeler finance space is completely unorganized, the team decided to address the gap by leveraging technology.

The key target segment of WheelsEMI consists of used two-wheeler buyers, who are not served by banks. These customers typically have poor or no credit history. As a market with high costs and a low ticket size averaging Rs. 35 K, the key to profitability was extensive and efficient use of technology to reduce costs and automate complicated workflows. Since WheelsEMI was the first NBFC to serve this market at scale, there were no existing solutions they could leverage for their business model. They were looking for a vendor who had the capability to build a comprehensive solution from scratch, was ready to understand their product, and was comfortable dealing with a dynamic scope as their business model was still evolving. As Nelito has been in the industry since two decades, the founders were confident that Nelito would be able to deliver based on its past experience in the domain.

Founded in 1995, Nelito Systems Ltd., provides software technology solutions & services for Banking, Financial Services, Micro-Finance, and Government verticals globally. While Nelito is primarily bank-focused, in response to increasing demand from the NBFC sector, the firm has developed a lending solution called FinCRAFT™ Integrated Lending Management Solution (ILMS), designed specifically for NBFCs, built from its existing Loan Management System.

Nelito has been working with WheelsEMI since launch, and the requirements of WheelsEMI were quite complex. Since their success depended on ease of usage, minimal capture of information and maximum flexibility. Their business model was designed such that they can operate completely branchless. FinCRAFT™ ILMS was customized significantly based on the requirements of WheelsEMI. The system consists of three components:
1. Unified Customer on-boarding and LOS App – A single mobile app serves as a portal for both dealers as well as field agents. Dealers can login and use the app for lead generation, inventory management, loan origination, as well as customer onboarding. Field agents can use the app to capture customer information, questionnaire, and vehicle inspection.
2. Loan Management System (LMS) – handles the back-end processes and runs on PCs
3. Collections App – this app helps field agents manage collections

The workflow starts with the dealer entering a customer lead on the WheelsEMI dealer mobile app. The customer details are entered, and certain finance schemes are offered on the spot. If the customer has a valid credit score, the process moves to the tele-PD stage, post which loan is sanctioned. At the same time, the lead is passed to the vehicle inspector’s mobile app, which allows the inspector to take pictures and provide the valuation of the vehicle. Once the loan is sanctioned, the forms are filled, and documents are collected. This information is shared with the back office, where the loan officer processes the disbursement to the central operations team, which in turn shares the same with the finance department which disburses the loan. The entire process can be completed in around 30 minutes. The entire process is paperless and is executed on a mobile app. The complete workflow requires all the components to work cohesively in real-time and integrate with external agencies such as Equifax for Bureau Score, NSDL for PAN verification, banks like HDFC and ICICI for disbursement and repayment, etc. Around 30% of the total loans are sanctioned with this process.

However, in the remaining cases the person’s credit history is unavailable or unreliable, WheelsEMI has devised non-conventional credit checks that rely on information captured by field agents via a questionnaire that captures the customer’s financial, behavioural, social as well as psychometric information. In such cases, if the loan is approved, the disbursal could take up to one day.
Nelito was able to design and go live with FinCRAFT™ ILMS in 9 months. The implementation was started in April 2017, and the modules were released in phases. The goal of the first release was to deliver a stable system, and it was delivered in August 2017. The second release aimed at introducing improvements and was delivered in November 2017. Nelito is working closely with WheelsEMI to add new features and is releasing builds as frequently as one per week. There are two teams with a total headcount of 18-20 from Nelito that are working with WheelsEMI for development and support respectively, while there are 10-12 employees from WheelsEMI.

The future releases are expected to automate the underwriting process using proprietary rule engine and using of analytics to enhance collection capability.

Key advantages:
1. This was a first-of-its-kind implementation for Nelito, and showcases their ability to deliver a highly customized, automated solution, in spite of the complex integrations and workflows required to align with the business model of WheelsEMI.
2. FinCRAFT™ ILMS is a scalable and highly customizable system, which will enable Nelito to offer similar highly automated solutions to other NBFCs operating in the lending space, with relatively less incremental effort using their experience from the WheelsEMI implementation.

Key Challenges:
1. Since WheelsEMI is first mover in its segment, there were a lot of challenges both in terms of business model, as well as the system requirements that could not have been foreseen, which resulted in re-work and was managed well because of Fincraft’s layered architecture.
2. Nearly 70% of the customers of WheelsEMI have no / unreliable banking records, making it challenging to underwrite loans for them. WheelsEMI had to develop proprietary, unconventional methods to determine credit-worthiness for these customers.

Key facts

  • Financial Institution: WheelsEMI
  • Headquarters: Pune, India
  • Supplier: Nelito Systems
  • Solution implemented: FinCRAFT
  • Modules: End-to-end Lending management system
  • Timeline: 7 months
by Niket Jithra