How are Microfinance lenders cutting costs with cashflow underwriting?

Lenders save money, reduce turnaround times, and improve borrower experiences by taking advantage of new technology to streamline processes.

Here’s how one particular technique; cashflow underwriting is making a difference:

🔹 Faster Bank Statement Processing

For years, manual reviews of bank statements have been a bottleneck for microfinance operations. Analysts spend hours or even days combing through statements, checking for patterns, and verifying cashflows.

With automated tools, this process has become almost instantaneous. What used to take hours now takes mere minutes, allowing lenders to process more applications in less time. This increased efficiency also means that borrowers can receive decisions faster, enhancing their experience and satisfaction.

🔹 Zero Printing Fees

Microfinance lenders often rely on paper documents for processing and verification. Printing, storing, and managing these documents comes with significant costs—not to mention the environmental impact.

By going fully digital with cashflow underwriting, lenders eliminate the need for printing altogether. Digital tools extract and analyze financial data directly from electronic statements, reducing expenses and supporting sustainability. 🌱

🔹 Lower Customer Acquisition Costs (CAC)

Customer acquisition is a major expense for lenders. Traditional methods involve heavy marketing investments and long onboarding processes, which drive up costs.

Cashflow underwriting helps lenders target borrowers more effectively by focusing on clients with stable and verified cashflows. This targeted approach minimizes marketing waste and streamlines onboarding, resulting in significantly lower CAC. It’s a win-win: lenders save money, and borrowers benefit from a more straightforward application process.

Why Cashflow Underwriting Matters for MSMEs

Micro, small, and medium enterprises (MSMEs) are the backbone of many economies, but they often struggle to access credit due to limited financial data or collateral. Cashflow underwriting addresses this challenge by prioritizing real financial activity over traditional credit metrics.

By analyzing an MSME’s cashflow, lenders can make informed decisions about loan eligibility and repayment capacity, ensuring that deserving businesses get the funding they need to thrive. This approach not only drives financial inclusion but also fosters economic growth in underserved communities.

Ready to Transform Your Lending Operations?

Cashflow underwriting is the future of microfinance, and Cladfy is here to help you get there. Whether you’re looking to :

• Save time with fast, automated processes.

• Cut costs by going paperless.

• Lower CAC with data-driven client targeting.

…we’ve got you covered.

Let’s connect and explore how we can revolutionize your lending business. 🚀

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