Top 10 Must-Have Features in NBFC Loan Management Software

Non-Banking Finance Companies (NBFCs) are strong players in the financial services industry with a significant reputation for enhancing financial inclusion through their widespread operations. From rising credit growth to handling huge credit volumes, these financial institutions are the mainstay of the fast-developing global economy. Over the years, operations in non-banking financial institutions can feel overwhelmed with changing compliance rules, borrower preferences, and tighter liquidity. This is the reason why NBFCs need loan management softwares, which functions in the form of a digital solution to handle the challenges of growing loan disbursements.

Processes like underwriting, tracking credit disbursed, repayments, and reconciliation have now moved from paper-based to digital. This has necessitated the need to have robust loan management software to handle huge volumes of loans, payouts, and financial advisory services.

According to a report by CareEdge Ratings, the lending rate of NBFCs to Micro Small and Medium Enterprises (MSMEs) has increased by 32% in the last 3 years. This is more than the growth rate experienced by private (20.9%) and public sector banks (10.4%) combined.

Integration of loan management software for Non-Banking Finance Companies is crucial for financial institutions aiming to scale up their digital financial services, meet their expansion plans, and support their next level of growth journey. Notably, the Loan Management Software (LMS) market size will grow to $21.62 billion in 2028 at an impressive growth rate of 20.6%, as per a report by Research and Markets. Some key factors behind the high demand for LMS include adopting loan management, the growing number of mobile users, the need for automation, the push towards digitalization, more focus on customer experience, and strategic risk management.

So, what are the must-have features of NBFC Loan Management Software? This blog explains the essential functionalities in NBFC lending software that help financial institutions manage their lending operations effectively.

Readily Deployable on Cloud

With a huge increase in the volume of loan applications, digital lending operations need readily deployable loan management software. Using conventional loan processing software might not be suitable for today's fast-paced business environment, where agility and speed hold the key to delivering a superior customer experience.

Digital lending software readily deployable in the cloud offers advantages in terms of security, flexibility for large-scale and mid-level enterprises, glitch-free loan settlement processes, and lower operating costs in the long run.

Real-time Data Capturing

NBFCs require intelligent financial decision-making to maintain asset quality and rising credit volume. Data analytics capabilities available in NBFC lending software solutions play an essential part in offering borrowers personalised loan products and valuable insights about portfolios for better risk management, and underwriting models can be accurate through timely information about income levels, credit history, and financial behaviour.

Rule Management

Loan management software needs a strong Business Rule Engine for real-time eligibility through flexible policy and regulatory compliance. Proprietary engines are in great demand as they can directly match users with the right financial product based on real-time eligibility and clear workflows.

Compliance and Risk Assessment

To combat the increasing rate of loan defaults and missed repayments by borrowers, NBFCs are resorting to internal credit scoring to safeguard their finances. Risk assessment is one of the must-have features in effective NBFC loan management software. It controls secured and unsecured credit risks and offers tiered financial products to borrowers based on exposure to risk.

Further, non-banking financial institutions must build compliance-fit infrastructure to follow changing regulations imposed by governing authorities. Efficient compliance also ensures risk mitigation and structured financial operation.

Faster New Product Creation

“Time is money” goes a popular quote. NBFCs these days are looking for financial innovation by expanding to new segments. Financial institutions are aiming to open up new credit pathways and also compete with large banks by introducing microloans, loans for agricultural workers, and small business loans.

Importantly, the best NBFC loan management software will definitely feature a dynamic engine, facilitating quick product launches and ensuring a strong position in the market. This will also support NBFCs' growth plans, like opening new branches and expanding to different cities and regions.

GUI-based System Configuration

GUI-based system configurability in digital lending software will offer NBFCs an added edge through interactive buttons, icons, and pointers. They can provide an unmatched user experience whenever borrowers access mobile apps or portals through an electronic device.

For example, features like drag-and-drop workflows, dynamic data capture forms, and real-time financial updates will democratize access to credit and make lending operations more inclusive and responsive to market demands and regulatory changes.

Document Mapping

Maintaining loan documentation is a crucial aspect of NBFC operations. Credit agents involved in the loan process must maintain factsheets, abide by fair practice codes, collect moveable and immovable documents before disbursing credit to borrowers, and release documents to customers on time after loans are settled.

An NBFC loan management software with a document mapping feature will ensure centralized records of information, fraud protection, better security through verification, and early warning signals against any compliance risks.

Mobility Origination Module

NBFCs need a 360-degree view of customer information at their fingertips. A mobility origination module makes a difference due to benefits like e-KYC against tedious documentation, automating borrower onboarding by sales agents, and ensuring lightning-fast processing of loan applications. Eventually, this decreases latency, promotes accurate credit evaluation via data of geographical coordinates, and enables timely repayment of loans by borrowers through prompt notifications.

Role-based dashboard

An NBFC can become successful in the market only if it considers the role played by direct selling agents (DSAs), employees, and end users. The availability of a role-based dashboard is a game-changer as it functions based on user-based permissions with access control and group segregation. It takes care of identity management and access management via exceptions and limits.

Collateral and Facility Management

Amidst the rise in loans disbursed by NBFCs, it is challenging to manage rising complications in collateral evaluation and verification. An NBFC loan management software with a collateral and facility management mechanism offers a flexible definition of credit types (full or partial), generates collateral ratings automatically, revaluates assets periodically, and provides a thorough view of finances based on financial status, location, and product.

Summing Up

NBFCs today are operating in a transition phase as they move from their core lending models to surviving strongly in the new age. The demand for efficiency in financing operations is higher than ever, and there is an urgent need for sturdy loan management software for NBFCs.

Those lenders who aspire to become significant NBFC players in the market can read our blog on the factors to consider before choosing the right loan management system for their lending business.

Lending processes need convenience, and NBFCs must provide a superior user experience to gain valuable traction in the highly competitive financing industry. Are you operating a lending business and looking for solid NBFC loan management software? ZIVA®, a robust digital lending software offered by Novac Technology Solutions, is an apt choice for powering ahead on this exciting journey and building resilience based on a technology-driven business model.

Discover how ZIVA® fits the bill for lenders and helps NBFCs grow to the next stage. Call us now and discuss your unique lending software requirements. Let’s work to enable your digital journey.

Loan Origination Systems - A Complete Guide

ImmersiveTech

A Year in Innovation: AR, VR and MR’s Evolution in 2024 and a Bright Outlook for 2025

FinTech