The e-commerce world has influenced our buying experience as never before. Products are now just a click away. The ease of buying has also helped pushing up the demand.
Now, the student community is well aware of trends in technology, fashion, food and other categories and wants to consume these products and services, but lacks money.
Rajan Bajaj and Deepak Malhotra, who are from IIT-Kharagpur and BITS-Pilani respectively, faced similar difficulties as students. The duo, who met through a common friend, observed that while there are banks offering services like EMIs and credit cards, there are no options for students to take such services. This pushed them to build a solution platform, specifically for students.
In November 2015, they launched Buddy, now Slicepay, a micro-lending platform for students. It offers credits to students without taking collateral of guarantee, recognising the fact that students in reputed institutes have the ability and intent to pay back short-term credit.
Rajan, 23, Co-founder, Slicepay said,
Our aim is to offer a unique solution to students, who are a critical part of the consumer market, and make the products accessible to them and offer a great shopping experience.
With an outlay of Rs 3 lakh, the Bengaluru-based platform began its operation in January 2016 and started offering credits to students.
The platform doesn’t offer direct cash to students, but helps them buy products and services from its partnered platforms. From e-commerce to wallet recharge to many other categories, it has tied up with over 40 such platforms and the number is growing.
According to the platform, students can buy products and use services up to Rs 60,000, which they can pay within 18 months, in various installations. The interest rate charged on it varies between zero and 20 percent.
It says that it is present in over 80 colleges and has offered credit line to 6,000 students, worth Rs 1 crore.
During February this year, the platform raised a funding of $500, 000 from Blume Ventures & Tracxn Labs and now has re-branded itself as SlicePay. The rebranding comes as a part of their expanded portfolio in the field of credit.
How to use the service?
Students who want to get a credit line fill up a form on the website and add their basic information, along with their college ID and address proof. After an hour of processing, the person receives a credit line of upto Rs 7,000, which he can use on the partnered sites.
“Now, there are various sections on the form. Every time, a user completes a section of the profile, he or she gets allotted a higher credit line based on our analysis. If all the three sections of a user profile is filled, he or she can get a credit line of upto Rs 60,000,” says Rajan.
A look on the operation side
To run the operation smoothly, Slicepay has a network of 100 students, called college ambassadors.
The college ambassadors are operation interns and growth hackers. The job of these college ambassadors is to get more customers, do thorough background checks and help in recovering money from defaulters, if any.
To raise continuous credit, Slicepay has also tied up with non-banking financial institutions (NBFCs) and takes services from them.
“Our business model is linked with both NBFCs and merchant partners. We raise credit lines from NBFCs, which we pay to students. In lieu of credit lines, of the interests we receive from students, a large part go to NBFCs and we receive between zero and four percent. From merchant partners, we receive four percent of commission on per order. It’s a high-risk business, where the cost of customer acquisition and marketing is very high,” says Rajan.
Startups rush to acquire students
With 700 universities and more than 35,000 affiliated colleges enrolling more than 20 million students, India offers a large opportunity for platforms targeting students.
And in the market, where around 25 percent of e-commerce is driven by students, many other micro-lending platforms are trying to create a niche.
Quiklo and Krazybee are two other platforms that offer credit line to students and allow users to borrow small sums of money to buy things on different payment plans.
In June this year, KrazyBee raised $2 million in seed funding from two Chinese firms.
In the past few years, there has been a spurt in lending startups targeting their brethren across the segments, categories and target groups. Such lending startups is a boon for the industry and will help building the economy of the country.
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