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Selected work.

A closer look at engagements across micro-finance, development finance, commercial property and auto lending.

Micro-Finance · India

Leading micro-finance firm in India

Introduction

Micro-finance loan provider based in India
A $200m loan book
More than 1.5m active loan accounts
Based on the Grameen model of group lending

Problem Statement

Duplication across loan books — the same customer with multiple profiles and dummy entries
Very high collection costs due to manual cash collection
Poor integration between systems
A long time lag between actuals and reports

Requirement

Streamline operations
Provide granular visibility across the entire loan book
Provide reporting in international formats to raise funding from the UK

Solution

Assembled a full-stack tech team to integrate operations across all centres
Limited manual cash handling via two-factor SMS authentication
Faster reconciliation of cash with a tech-based MIS gave all stakeholders proper visibility of risk
Secured term sheets from international banks for the client

Development Finance · United Kingdom

Development finance provider in the UK

Introduction

A P2P-funded provider of development finance loans to UK real-estate developers
A £125m loan book
A complex loan type, with bullet payment of interest and multiple drawdown stages
Loans accrued interest with payment at maturity, while interest costs to investors were paid monthly

Problem Statement

A five-year-old loan book
Missing and duplicate data
Excessive paper dependence with very low digitisation
Asset valuations not updated at each drawdown stage
No clear funding strategy

Requirement

Data cleaning and reconciliation of the loan book against the paper trail
Funding on the loan book to match asset cash flow
Investor presentations and road shows, including obtaining a credit rating

Solution

Cleaned present and historical loan records to remove inconsistency
Built a cash-flow model to project funding requirements
Arranged a warehousing line, refinanced through a securitisation structure

Real Estate · London

Commercial property acquisition in London

Introduction

The client was acquiring a portfolio of four serviced apartments in London
A £190m acquisition notional
Each property a standalone asset with its own operating cash flows
Senior, mezzanine and equity capital, a lease operator, a management company and several layers of charges

Problem Statement

Each asset is a standalone performing entity with its own costs and resource allocation
The seasonality of ADR/RevPAR required flexibility to model each asset
All cash flows combine at the acquisition vehicle, with distributions made at the consolidated level
Any asset could be disposed of individually at any time

Requirement

Granular modelling of each asset, with profitability and ADR/RevPAR monitored individually
Consolidating operating cash flows and allocating them to all capital sources per their contracts
Coupon buffers, interest coverage, sensitivity analysis, missed-coupon tracking and IRR hurdle checks

Solution

Delivered a comprehensive model with the flexibility to add or remove assets
Many variables let the client stress-test and understand the portfolio in granular detail
The full cash-flow waterfall was taken directly from each capital provider's terms
Provided ongoing support, comparable analysis and primary market research

Auto Lending · Financial Model

Auto-lending platform financial model

Introduction

The client was setting up a new auto-lending platform
UK-based with support staff in India
The model had to scale as the business grew from a zero-start loan book
Senior and equity capital with different term structures, repayment profiles and a complex waterfall

Problem Statement

Three kinds of loan by underlying credit, each with its own default and prepayment curves
A different recovery lag for each kind of auto loan, with reserve requirements varying accordingly
As each loan pays principal and interest monthly, proper breakdown and allocation was needed
Monte Carlo simulations and CPR/CDR methodology used to compare default curves

Requirement

A three-year ramp-up, a five-year stabilisation period, then a run-down to maturity
Monthly principal and interest payments, with earlier-period defaults tracked and reserves allocated correctly
Loan-book modelling kept separate from the platform so assets were bankruptcy-remote

Solution

Each cash flow was subject to its CPR/CDR probability, combined and tracked across periods to reflect the cash position and capital-at-risk at any point in time
Each cost had its own non-linear scaling factor, giving the flexibility to model the whole business profile for five to seven years in a single comprehensive model

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