How Paisabazaar facilitates consumer loan growth in India


Loan growth is an important indicator of the state of a country’s economic activity, and borrowing and spending are closely related to consumer confidence. With the increase in economic activity, the Indian banking system has also observed rising bank credit growth.

Naveen Kukreja

Last year, the RBI released data indicating that consumer loans were rising at 16.6 percent. Experts saw this as a testament to improving business and consumer confidence.

However, while consumers are queuing up for loans, the gap between banks and consumers remains wide. With both being unaware of the other’s needs and demands, the process of loan approval becomes very complicated.

“Our aim is to provide a complete solution in both the lending and investment segments. The platform enables users to compare loans, credit cards, and investment products from multiple providers online,” says Naveen, CEO and Co-founder, Paisabazaar.

Product: growth story

Paisabazaar’s initial offerings were limited to personal loans and credit cards.

“Two years ago, the loan and credit card applying and approval procedure was completely offline. The process was hectic, long, and inefficient. The platform started as an aggregator which offered only comparison solution to users,” says Naveen.

Today, it has many other offerings on its platform — personal loans, home loans, credit cards, education loans, car loans, savings accounts, and mutual funds.

Not only does it provide information on different banks’ lending rates but also helps consumers make informed decisions through its tools, which further assist them in securing loans.

The platform compares product offerings on the basis of key criteria such as processing fees, interest rates, tenure, and other features that matter the most to you. Apart from providing unbiased comparison insights, it also provides assistance to users so that they get the best possible deals with minimum hassle.

It has online tools and calculators that help consumers in identifying loan eligibility, EMI amount, retirement planning, home loan balance transfer, and fixed deposit and savings accounts interest rates in different banks, among other facilities.

Besides, the overall human interference (offline activity) in the whole process of applying for loans and credit cards and buying mutual funds has largely decreased.

“We have been largely successful in taking things online and we consider it one of our biggest achievements in the category,” adds Naveen.

The CEO observes that the growth of the company also reflects in the figures it has achieved in these two years.

Growth in figures

The company claims to have marked a staggering growth in the past two years.

“Since the beginning, we have been focused on the job. We knew the gaps in the category. We were aware of the needs and demands of both the banks and customers. We tied-up with many partners, increased our offerings, and gave the right solutions to consumers. This is how we have achieved this growth in the small period of two years,” says Naveen.

Paisabazaar has been working with over 50 partners across the lending category, including banks and NBFCs, some of which are HDFC, SMI, Axis Bank, and Dena Bank. On the mutual funds and investing sides, the number of partners is 30. The overall number of partners has been continuously increasing, with between two and three partners joining every month.

It receives 2.5 million enquiries and has hit annualised loan disbursals of Rs 2,000 crore.

The company targets 3X growth and aims to cross Rs 5,000 crore annualised disbursal run rate by the end of this year. It plans to touch annualised disbursal of Rs 25,000 crore by 2020.

Fintech: a growing market

Fintech startups seem to be in vogue in the Indian startup ecosystem.

Data collected by the YourStory Research team shows that there are more than 2,000 fintech startups in the country.

In the lending and investment category, BankBazaar and Paisabazaar are the two known platforms to follow listing models.

The growth of SME lending platforms is the other category. Capital FloatRubique, and Lendingkart are a few such platforms.

In the P2P lending segment, Faircent, which has raised an undisclosed amount of funding from Mohandas Pai, is one of the largest players.

Payments have become synonymous with fintech. It was one of the first segments where startups began to grow and disrupt the way people transact, and it also was among the early regulated players. One of the biggest players in the payments space is Paytm, which had gobbled up one of the highest funding amounts from Alibaba last year. Several other payment banks and mobile wallets include FreeCharge, MobiKwik, and Oxigen.

Since 2007, over $2.76 billion has been raised by this industry. The bulk of these funds has found its way to wallets and payment gateways, which have together netted close to $1.9 billion in investments so far.

According to YourStory Research, $1.2 billion has already been invested in fintech startups in the last two years. In fact, the number of fintech startups funded in the first half of 2016 equals the total number of startups funded in the sector in 2015.

As of December last year, Kalaari Capital-backed Rubique had disbursed close to Rs 150 crore, and Capital Float, which raised $25 million in Series B funding led by Creation Investments Capital Management, claimed to have disbursed close to Rs 300 crore as of May. Lendingkart has also raised $32 million in Series B funding.

The payments segment is the second-highest funded space. The total amount of funding made in the space between last year and this year amounts to $866 million.

The development in the fintech segment heralds the growth of a new-age financial system in India.

Experts say that people don’t need more banks, but more banking. They believe that technological implementations have the ability to take banking solutions to the living rooms of the masses.