Vikas Sekhri was a 17-year-old freshman in college, when he applied for his first credit card in the US. Given that he was a young, international student with no prior credit or work history, he had assumed that it would be an extremely gruelling process. But, he was pleasantly surprised when he promptly received a credit card after filling out a formal application, albeit with a relatively diminutive credit limit. Cut now, to the same situation a decade and a half later, in India. He applied for a credit card again, this time with six years of work experience under his belt, as well as reputed undergrad and graduate degrees. However, he found himself stuck in myriad paperwork and processes. Vague and intangible factors such as having the right connections are what determined a person’s ability to access credit in India. He knew right then that he had to figure out a way to develop a system of credit evaluation that was fair and balanced and provided access to credit for the millions of Indians who are worthy of it, but remain to be left out of the system in its current form.
Why he (cash)cared
Vikas was only 16 when he left home in Mumbai for his undergrad at Indiana University. He worked as a banker at Bank of America in both Chicago and New York, and in private equity in Boston. “My background in the financial sector helped me understand the credit problem and how to develop a more nuanced credit platform for all consumers,” he says. He went on to pursue an MBA at Wharton, and came out startup ready, for he knew his passion was problem solving. After 12 years in the US, he returned to India and served as Head of Business for ZipDial – now acquired by Twitter. Following that, he started his first company – EkSMS, a mobile-based search engine for the Indian market. It was then that he got a first-hand peek into the gap in the Indian credit system. “When we first went to the market, there was no existing solution serving the online consumer segment with access to credit, so we thought it was best to first target the online segment, where there was a sizable gap.”
He reached out to Ikram Jaffer, who he had met during his undergrad, and worked with at the Bank of America. Ikram also comes from a finance background and understood the credit problem, given the time he served as an entrepreneur, and in venture capital. Vikas invited Ikram onboard when the seeds for Cashcare were sown, and right around then also met Suraj Mundada, who had worked in the banking and electronic payments space with expertise gained from his time at Oracle and Wipro. The three came up with an answer to the gap – CashCare, aiming to solve for the $100 billion market opportunity as India's first completely digitised online consumer lending platform available at the point of sale.
How it works
CashCare Technology Pvt Ltd. is India's first simple and secure consumer lending marketplace.The platform offerstheir consumers three to 12 month EMI options to pay for purchases from partner retailers, by matchingthem to their various NBFC partners. Through them, they offer EMIs on products worthRs 10,000 to 2 lakh. Customers are guaranteed to find out about their loan eligibility within five minutes.
The interest to customer varies on the scheme and risk ranging from zerointerest to 24 per cent.All interest income goes to the NBFC partner; CashCare monetises value by generating lead fees from them. “In addition, we help our e-commerce partners with increasing revenue. We make payment gateway like fees of 1.5–2.5 per cent,” explains Vikas.
The innovative part about CashCare is that it may be a credit solution, but is a payment product. “Our first version was a lending product launched in February 2015 with FabFurnish. Within a few days, we realised that a lending product, which requires filling a long form, and then waiting to get a response does not work when a customer has already decided to make a purchase and would like to immediately pay and get their product. Consequently, we built and launched a credit solution that evaluates and approves customers in five minutes.”
As a purely digital lending platform, customers get real-time response on eligibility. They use multiple criteria including personal information (life stage, demographics, city, pincode), transactional information (shopping history, mobile and bill payments), and behavioral information (loan payment history, social profile) to evaluate an applicant’s creditworthiness. E-commerce giants like Flipkart, Amazon, and Snapdeal also offer EMI option on their products, but they are affiliated with select banking institutions, and are available on limited credit cards.
“After the customers are approved on a real-time basis, some regulatory and risk-based offline processes are followed, where we seek the applicant’s KYCs. Our agents across the country reach out to customers and this process takes anywhere between 30 minutes and 24 hours. The product is kept on hold and gets shipped immediately after the process is complete,” he further explains, adding,“Today, 97 per cent of our customers that start a form, actually complete the journey within minutes, cementing our ability to cater to the needs of our customers.”
Cashing in on credit
The platform mostly on-boarded online retailers, as they believe the future is mobile. They are also expanding to offline partnerships, such as those in the education and travel sectors. While they serve all customers who want to access credit and shop with ease, their main target group is customers aged between 18 and 35 years. “We expect by 2020, CashCare's target market will comprise of approximately 164 million households in India alone,” states Vikas.
The e-commerce industry in the country is likely to be worth $38 billion by 2016, a 67 per cent jump over the $23 billion revenues for 2015, as per industry body Assocham. “India’s e-commerce market was worth about $3.8 billion in 2009, it went up to $17 billion in 2014 and to $23 billion in 2015 and is expected to touch whopping $38 billion mark by 2016,” Assocham said in a statement.
Going from a four-member team in June 2015 to a 25-member strong team now, CashCare has been growing at least 100 per cent every month and is adding five to 10 retail partners every month. Their most prominent partners so far include Shopclues, MakeMyTrip, FabFurnish, Edureka, Dezyre and Shopmonk, among others. They've done about 5,000 transactions in this year, with the average size of Rs 30,000 per transaction. With no Indian counterparts, abroad, companies like Klarna and Affirm are in the space. CashCare even raised an undisclosed amount in a seed round led by a Bombay-based VC. The alpha version of their mobile app was launched earlier this year.