FINANCIAL TECHNOLOGY: SPENMO
Mohandass Kalaichelvan, co-founder, Spenmo
How Spenmo helps businesses secure direct loans The platform also allows merchants to effectively manage expenses.
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racking operational expenses such as invoices, receipts, and employee salaries can already be a daunting task for micro, small and medium enterprises (MSMEs). What’s more, they also have to secure loans from banks and alternative lending platforms, something that is already a chore in itself especially for those just starting out and looking to increase their credit score. What started as a way to help small businesses with their cash flow landed them in a position to assist them with their financing needs as well, Spenmo co-founder Mohandass Kalaichelvan said. Launched in 2019, the Singaporebased startup provides MSMEs with corporate cards to easily track expenses, obtain financial reports and digitise spending, in addition to granting them direct connections to lenders in Southeast Asia. Spenmo has previously received seven-figure funding from Rocket Internet. In 2020, the company was chosen by American seed money startup accelerator Y Combinator for its Summer 2020 Batch, securing $150,000 in funding. It has also been backed by angel investors from 34 ASIAN BANKING AND FINANCE | DECEMBER 2020
Without the right tools and education, many business owners are utilizing their personal accounts to conduct business transactions, and vice versa.
Google, Netflix, Go-Jek, StashAway, and Alibaba. “Being able to centralise the spending data of small businesses meant that we were able to provide lenders with in-depth information on how businesses were spending their money, and act as an additional metric for credit assessment, therefore greatly improving businesses’ chances of getting a loan,” he explained. In an exclusive interview with Asian Banking & Finance, Kalaichelvan discusses the pain points of the lending sector, the signs that should tell businesses to seek alternative lending platforms, how businesses can make themselves attractive to lenders, and how traditional and alternative lenders can partner to ensure that they uphold the best interest of clients. What pitfalls in the lending sector did the pandemic-caused economic fallout expose? How do you plan on solving, or at least mitigating, those? Many MSMEs have continued to blur the lines between company and personal spending. Without the right tools and education, many business owners are utilizing their
personal accounts to conduct business transactions, and vice versa. What this pandemic has done is exposed the flaws involved in this method of cash flow management. With cash flow streams fragmented and muddled up, banks and lenders have a hard time determining the creditworthiness of clients. Not to mention that such practices often do not leave a positive impression of the business professionalism in the first place. As a result, otherwise credit-worthy customers may end up being turned away from receiving loans. With Spenmo, micro, small and medium-sized businesses are provided with an ever-growing suite of services that allow them to centralise the company’s spending, while saving costs for MSMBs as well. This allows for a clearer, more in-depth assessment of the company’s creditworthiness. The bigger vision for Spenmo is to use the data from companies’ spending to inform creditworthiness and connect them to the best lenders in the region. Despite increased innovation and technological adaptation within the banking sector, banks still take a number of weeks to revert back on applications. This has been further exposed by the pandemic, with the sudden influx of applications doubling or even tripling the wait-time involved in the application process. Spenmo is trying to increase this by increasing business’ awareness of alternative financing options which have much quicker turnaround times than banks. Additionally, with our centralized spending platform, companies are able to easily reflect their spending habits, which in turn allows financial institutions to expedite the credit appraisal process without having to follow a papertrail which can be extremely time-consuming. When are bank loans non-beneficial for businesses? Are there any specific red flags that should let them know that they have to seek elsewhere? What some companies don’t know is that each application for any sort of credit bank or financial institute (CC, personal bank loan, corporate bank loan) results in a hard pull of the applicant’s personal CBS report from