In an exclusive interview with The Wallet Age, Roshan Shah, Co-Founder and CEO of VoloFin, shares insights on how the company’s unique dual-role approach as both lender and platform is transforming SME financing. By leveraging advanced technology and strategic partnerships, VoloFin addresses traditional financing limitations, offering SMEs enhanced capital availability, competitive pricing, and expanded geographical coverage. With proprietary risk models and blockchain integration, VoloFin ensures robust risk management and unparalleled transparency, driving sustainable growth and innovation in the fintech industry.
Read the full interview here:
VoloFin operates as both a lender and a platform for banks in factoring. How does this dual role benefit SMEs compare to traditional financing?
Mr Roshan: Traditional financing is often constrained by the limits of their own balance sheets, which restricts pricing, country coverage, risk appetite, and flexibility. Our unique blended model revolutionizes this approach by offering lenders a comprehensive platform where they can seamlessly deploy their capital. This not only benefits the lenders but also greatly supports SMEs in several keyways:
- Capital Availability: Many banks and lenders lack the necessary infrastructure, technology, and origination capabilities specifically tailored for SMEs. By leveraging our platform, these lenders can efficiently deploy their capital, thereby making it more accessible to SMEs in need.
- Competitive Pricing: With multiple lenders and banks onboarded onto our platform, we can negotiate the most competitive pricing for SME financing solutions. This ensures that SMEs receive optimal terms that suit their financial needs.
- Expanded Geography Coverage: Unlike other platforms, we excel in geographical coverage by partnering with strong lenders from diverse regions. For instance, our partnerships include lenders from Latin America, which enables us to provide robust financial solutions for clients and exporters targeting that market segment. This extended reach significantly enhances our clients’ capabilities in global trade.
- Enhanced Capacities: Traditional financing is often limited by the maximum capacity they can extend to a single buyer exposure. In contrast, our network includes lenders with substantial, unrestricted capacities. By collaborating with multiple lenders, we can scale financing solutions effectively, accommodating larger transaction volumes and supporting more SMEs.
In summary, our innovative approach not only addresses the inherent limitations of traditional financing but also unlocks new opportunities for SMEs globally. By bridging the gap between lenders and SMEs through our advanced platform, we foster growth, competitiveness, and resilience in the SME sector.
Could you explain VoloFin’s proprietary risk model and its impact on managing supplier, buyer, and transactional risks? How does this differentiate VoloFin in the fintech industry?
Mr Roshan: Our fintech platform stands out due to its founding team’s deep industry expertise, spanning finance, credit, insurance, and risk management, totalling over 100 years. Unlike many competitors with tech-centric backgrounds, we leverage this extensive experience to streamline our learning curve and fortify our systems. Key features include integrated risk assessment and modelling within our platform, alongside seamless API integrations with multiple service and data providers. Our proprietary rating models ensure robust credit evaluations. Clients benefit from a fully automated, paperless journey from self-onboarding to funding, underpinned by comprehensive assessments of clients and transactional documents. This approach makes us a pioneer in offering a seamless, efficient, and unprecedented fintech solution tailored to SMEs’ financial needs.
You mentioned using blockchain in your platform. How does blockchain enhance transparency and security, particularly in managing data and ensuring end-to-end operations in factoring and supply chain financing?
Mr Roshan: Our use case for blockchain is to ensure that every transaction, data, document on the platform gets its unique identification and is immutable. We from day one believed and have acted that every stakeholder on the platform should have access and visibility to the data, be it the supplier/exporter, lender, insurer etc. The collected comfort of our team, tech, credit processes and the transparency has built the strong network of lenders which are onboarded and many more who are keen and in active discussion to be onboarded.
What challenges have you faced in global expansion, especially in markets like India and the USA? How has VoloFin adapted to different regulatory environments and market dynamics?
Mr Roshan: Every step and action we take undergoes rigorous scrutiny by both internal and external experts. While challenges such as setting up offices and navigating compliance are inevitable, we’ve been fortunate to have a resilient internal team and dedicated external advisors. Their expertise has been instrumental in seamlessly overcoming these hurdles and ensuring operational efficiency.
With plans to onboard global banks and expand geographically, what criteria guide these partnerships? How do you expect these partnerships to drive VoloFin’s growth in the coming years?
Mr Roshan: At VoloFin, our partnership strategy is guided by stringent criteria aimed at securing global banks and lenders who align closely with our mission to democratize SME financing globally. We prioritize partners with robust financial capabilities, a strong commitment to technological advancement, and a comprehensive understanding of diverse market dynamics. By forging alliances with such institutions, we aim to expand our geographical footprint significantly.
These partnerships are pivotal in driving VoloFin’s growth trajectory. They enable us to access untapped markets and leverage our platform’s capabilities to deploy capital efficiently where it is most needed. With increased geographical coverage and enhanced capacity to handle larger transaction volumes, we anticipate tripling our size within the next 12 months. Moreover, these alliances bolster our ability to offer competitive pricing and tailored financing solutions, thereby attracting a broader range of SME clients globally.
Ultimately, our goal is not only to scale operations but also to empower SMEs with seamless access to financing, fostering their growth and resilience in an increasingly competitive landscape. Through strategic partnerships, VoloFin continues to redefine traditional financing models, ensuring sustainable growth and innovation in SME finance worldwide.
VoloFin aims to revolutionize lending from SMEs to large corporations. How do you maintain flexible lending structures while ensuring robust risk management and profitability?
Mr Roshan: VoloFin achieves its goal of revolutionizing SME to large corporation lending by combining flexible lending structures with robust risk management and profitability. Through its dual role as lender and platform for banks in factoring, VoloFin maximizes capital availability and negotiates competitive pricing across multiple lenders. This approach not only expands geographical coverage but also enhances lending capacities, accommodating larger transaction volumes. VoloFin’s proprietary risk model, informed by deep industry expertise and integrated technology, ensures rigorous credit evaluations and seamless operational efficiency. Blockchain technology further enhances transparency and security, safeguarding data integrity throughout factoring and supply chain financing processes. Adapting to global expansion challenges, VoloFin navigates diverse regulatory environments with expert guidance, reinforcing operational resilience. By partnering strategically with global banks that share its commitment to innovation and market understanding, VoloFin anticipates significant growth, tripling in size within the next year. Ultimately, these partnerships empower SMEs with accessible financing solutions tailored to their needs, driving sustainable growth and competitiveness in the global market.