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| Edited By: Ruchika Shah |Source: DNA |Updated: Mar 22, 2018, 02:20 AM IST
Our entire ecosystem is dependent on a scoring engine. It churns a potential customers' Facebook and LinkedIn profiles, bank details, Cibil score, and PAN Card number to approve a credit limit with a seven to thirty day tenure or rejects the application. It's a regressive algorithm which has the capability to learn as it lends. We are not perfect yet, but the goal is to make itself aware, capable of making its own decisions.
We let you borrow Rs 10,000 with an interest of about Rs 280 for say, ten days. There will be a one-time processing fee, but in all cases, the customer will get the money at Rs 299, which is ridiculously low compared to the next best option, a credit card. For 30 days, this can go up to Rs 490.
Thanks to the AI, we don't need much human capital and at the pace, we can extend credit with minimum human interference at the minimum operational cost.
Our target audience is young people, new professionals. Over the last four-and-a-half months, our social underwriting data tells us they make better customers and need non-traditional banking instruments to fulfil their lifestyle needs. The important bit here is, if you have friends on our platform who have low credit score, you will not get a loan, at least from us.
Currently, we reject about 52% of the applications. As it turns out, our data shows, it's because most of them are not from our customer segment. We're not here to give a 40-year-old Rs 10,000 on the 20th of the month. It's for a young professional who wants to go on a holiday at the end of the month or wants to take advantage of a month-end sale. It's for those who quit their job and need money, till their full & final payment comes or to pay a hefty brokerage and deposit for a new house. It's to fulfil these needs. We're not a survival product, we're a lifestyle product.
Payday loans don't consider credit score, it's a physical risk estimation since you have to walk to the next retail payday loan outlet. They believe in and survive on delinquency -- at a rate of 15-20%. Ours is 1-2% and we are working on reducing that to under 2% in six months.
In the last 15 years, the cost of spending hasn't gone up much. It is possible to afford a great lifestyle at a low cost. Nine years ago, the iPhone was launched at about Rs 37,000. Today, the best phone in the market costs Rs 50,000, which isn't a huge change. Gold prices have doubled, but not the iPhone. Today, not everyone can afford it, but back in time, no one could afford an iPhone. That's the difference.
A travel-linked product which will cater to travel aggregators and airlines. For most of us, booking air travel and hotel room eats away 80% of our credit card. Our aim is to provide a product which will provide a bridge loan for one-three months, to pay for air tickets and hotel, so that your credit card is free.
By December, we are aiming at 20,000 loans a month. It's a very scary number but it will be done without adding any extra resources. We are also talking to corporates to provide advance salary options.
