Unconventionally traditional may seem like an oxymoron, but it fits Five Star Finance. There’s no better way to describe the Chennai-based non-banking financial company (NBFC). It has all the old-school trappings of a lender. From brick and mortar branches to 2,000 feet on the street that disburse Rs 3-4 lakh ($4,250 – $5,700) loans to small businesses. The unconventional part? Despite the relatively small loan sizes, Five Star still goes through the painstaking ordeal of taking property as collateral.
A collateral-based model for such small-sized loans flies in the face of fintech logic. New age lenders like Capital Float and Lendingkart give similar businesses loans—even up to Rs 50 lakh ($70,900)—without the need for collateral.