There is a sense of foreboding associated with obtaining loans. The process is so complex that many people are either put off by it or are forced to choose the wrong options and face disappointment.
There are several incidents where the brackets and criteria do not cover many otherwise eligible candidates like small and medium enterprises (SMEs) and freelancers.
Ex-bankers and colleagues at Axis Bank, H.D. Sheriff and Jyotsna Vasudevan would see several eligible SMEs running from pillar to post to get their working capital or any urgent finance requirements. They are either denied timely finance or are rejected when the SME does not meet the bank's parameters.
The duo set up Quikrupee in Chennai to solve this problem and help SMEs get timely finance from the right lender. It is an online portal for distribution of financial products for SME financing, like business loans, working capital loans up to Rs 5crs, and personal finance.
Discovering the market need
Speaking on the incident that proved to be the tipping point, Sheriff says there was a small businessman who wanted an urgent business loan of Rs 1 crore to purchase stock and machinery.
He had submitted his application and documentation to three banks via a consultant. He had spent his time and resources on the consultant who didn’t even tell him the right bank to approach.
“Looking at this, Jyotsna and I realised that we could bridge this gap in the market by creating an online channel for SMEs to search and find the appropriate lenders based on their requirements and eligibility,” says 40-year-old Sheriff.
Since the founders each have 10 years of experience in banking space, they were able to add in different banks and financial institutions.
Quikrupee was launched in September last year. The portal claims to have had over 5,000 unique visitors and 375 applicants. Of this, it is processing loans for almost 302 customers across various products. It claims to have successfully disbursed loans worth Rs 1.25 crore till December.
The workings and details
The end consumer can browse through the various choice of products and loans that he or she needs on the startup's website. The Quikrupee comparison engine helps assess their eligiblility online, according to the norms of banks or financial institutions.
The team is currently in the process of developing the scoring for SMEs to ascertain if the individual is eligible, and what would be the likely interest rates he could get. Sheriff adds that since the eligibility and scoring is done online, it reduces 50 per cent of the time involved in processing an application.
“Our main USP is our domain expertise and the segment we handle. SMEs are a niche segment, and their problem to obtain adequate finance is perennial. We have very less competition in this space, and our portal is free for customers,” adds Sheriff.
As of now, only about 50 per cent of the entire process is online. “Our future is to make the entire process right from origination to disbursal completely online,” says Sheriff.
The fintech space is currently at the cusp of disruption. In 2014, investments in the segment shot up to $12 billion from $3 billion the previous year. It is believed that various verticals of the banking system will be broken down and made simpler with the use of technology.
These include money transfers, account management, lending, and investments. The space is projected to grow at 48 per cent year-on-year. In Silicon Valley, the investments in the space shot up to 117 per cent and the total investments in Europe was at $1.48 billion.
While India is yet to catch up, we do see growth and visibility in the number of fintech startups in the country. Another startup in the space includes Kalaari-backed Rubique. Apart from this, startups like Faircent are making waves in the P2P lending space. It will be interesting to see Quikrupee's growth in the new year.
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- financial products
- Financial services
- Social economy
- Personal finance
- Financial technology
- timely finance
- adequate finance