Rewriting Credit Access in India The Power of Risk Calibration in NBFC Lending
- Beulah Fernandes
- 12 hours ago
- 4 min read
Risk calibration is the process by which financial institutions assess the potential risk of lending to a customer and adjust their decision-making accordingly. It goes beyond just checking credit scores—it dives into real-time financial behavior, transaction patterns, and verified data to understand the true repayment capacity of a borrower.
The approach is about precision. Instead of following rigid templates, lenders fine-tune credit offers to suit individual borrowers. This helps widen access, especially in markets where traditional credit checks might exclude genuine applicants. It’s a smarter way to lend—based on facts, not assumptions.
Why It’s Gaining Traction Among Lenders
In the current economic climate, lenders must manage growth and risk at the same time. With more people and small businesses entering the formal credit system, NBFCs need a reliable way to screen applicants who may not have formal documentation but still show strong repayment intent.
Risk calibration offers that solution. It allows companies to:
Evaluate applicants using a mix of financial and behavioral data
Make credit available to thin-file or first-time borrowers
Maintain disciplined lending practices
Expand responsibly into underserved markets
The strength of risk calibration lies in its flexibility. It considers more than just a one-time score—it evaluates actual patterns and real-time signals.
Also Read: Poonawalla Fincorp Introduces 24/7 Digital Business Loans with Risk-Calibrated Approval for MSMEs
Digital Infrastructure as a Game Changer
India’s expanding digital public infrastructure is at the heart of this shift. NBFCs now have access to verified data from systems like:
GST filings, which reveal business performance and compliance
Account Aggregators, providing a consolidated view of banking history
Credit bureaus, tracking existing debt and repayment records
KYC-linked mobile behavior, offering deeper insights into financial routines
With all this information available instantly, companies can make lending decisions in hours instead of days. It eliminates the need for outdated physical documentation and allows for more transparent and accurate assessments.
A Look at Poonawalla Fincorp’s Strategy
Poonawalla Fincorp has implemented risk calibration as a central part of its lending approach. The launch of its Business Loan 24/7 is a clear example. It is a digital product specifically designed for MSMEs and small business owners, using integrated real-time data to assess applications instantly.
The loan evaluation doesn’t depend solely on past income tax returns or traditional scoring models. Instead, it pulls live data from GST networks, banking aggregators, and credit bureaus to paint a detailed picture of financial behavior. This allows Poonawalla Fincorp to lend with speed and confidence, even to borrowers outside big cities.
CEO Arvind Kapil has emphasized that MSMEs will drive credit growth in India, and products like Business Loan 24/7 offer a sensible, risk-aware way to support that segment.
Lendingkart’s Use of Alternative Data
Lendingkart, a tech-driven NBFC, is making waves with its use of alternative data for underwriting. It assesses over 5,000 data points—ranging from digital spending trends to mobile usage—to evaluate the creditworthiness of small businesses.
Their platform automates most of the decision-making process. A business can apply online, and receive a loan decision within the same day. Lendingkart doesn’t require physical documents or security—risk calibration models allow the company to extend credit with speed and accuracy.
Their focus on Tier 2 and Tier 3 cities makes them especially valuable for businesses that lack formal financial history but are otherwise strong contenders for credit.
Clix Capital’s Predictive Modeling Tools
Clix Capital is another NBFC applying advanced risk modeling techniques. Their system combines AI-driven analytics with sector-specific insights to design credit solutions that are practical and safe. Rather than simply rejecting borrowers with low credit scores, they analyze transaction patterns, employment details, and financial consistency.
This gives Clix Capital a unique ability to serve both salaried and self-employed individuals across industries. Their predictive models adjust in real time, learning from market changes and customer behavior.
Benefits of Risk Calibration for NBFCs and Borrowers
Adopting calibrated risk models allows NBFCs to lend better, faster, and smarter. Some key advantages include:
Tailored Credit Decisions: Products are better matched to borrower ability
Increased Financial Inclusion: Wider access for borrowers in rural and semi-urban areas
Reduced NPAs: Better judgment reduces default rates
Operational Efficiency: Automated decisions save time and reduce manual error
For borrowers, the benefit is clear: faster loans, fairer assessments, and broader eligibility—even without perfect paperwork.
Why Human Input Still Matters
Although data plays a big role, the human element hasn’t disappeared. Risk teams continuously review outcomes, refine rules, and respond to economic shifts. The goal is to ensure risk models remain current and practical.
NBFCs must strike a balance—using tech to scale, but also applying industry insight to make context-based adjustments. The best risk calibration models are those that blend machine-driven insights with practical judgment.
Sector-Wide Shift Toward Calibrated Lending
The movement toward calibrated risk is no longer limited to a few players. With NBFCs like Poonawalla Fincorp, Lendingkart, and Clix Capital at the forefront, the trend is gaining strength.
These companies show that using real-time data and digital tools doesn’t mean taking higher risks—it means making better risk decisions. The lending process becomes faster, more inclusive, and aligned with actual borrower needs. And as the Indian economy continues to digitize, more lenders are expected to adopt this model.
Conclusion
Risk calibration is transforming how NBFCs operate. It shifts credit decisions from guesswork to evidence-based assessments. With tools like GST data, account aggregators, and AI-based modeling, companies can safely expand credit access while maintaining control over risk.
NBFCs embracing this model—such as Poonawalla Fincorp, Lendingkart, and Clix Capital—are not only lending more effectively but also helping shape a more inclusive financial system. The message is clear: responsible lending isn’t about saying “no” more often—it’s about knowing when to say yes, and how much.
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