With salaried individuals still finding it difficult to get the kind of loans they are looking for, LoanTap aims to solve the gap by bringing in flexible loan products.
Even with the several lending platforms present today, salaried employees still find it difficult to get loans. The brackets and eligibility criteria are confusing. Being salaried, a lot of people feel snubbed by the traditional banking system, especially when it comes to securing loans. Most of the caps and eligibility criteria for loans and credit cards haven’t changed for decades.
This is when Satyam Kumar, who has over 17 years’ experience in the financial industry, decided it was time for a change and decided to launch LoanTap, an online platform which delivers flexible loan products to salaried individuals.
Setting up from scratch
He roped in his friend Vikas Kumar, co-founder at Brainvisa Technologies, to put his 18 years of experience in technology, online platforms, and web to use here.
Launched in May last year, LoanTap has technology as its core. “We were looking for simple NBFC software with easy user interface (UI), stability across learning levels, and speed of processing transactions,” says Satyam.
They found that most of the solutions were built around loan management systems developed to handle operational functions. Satyam adds that they needed something that was fast in the frontend, had real-time data transfer for credit processing, and easy on the loan disbursing process.
He says they were left with no choice but to build an NBFC software from scratch. LoanTap operates on an in-house online platform rather than using different APIs. This, Satyam says, helps them ensure low operational costs and faster and hassle-free sourcing and management of applications.
Focusing on ease of disbursement
“We provide EMI-free loans, personal overdraft facilities, and rental deposits where we do not face any competition. These products are designed specifically for catering to the needs of salaried millennials,” informs Satyam. The platform works as a single window for lead capturing and loan origination and management. The platform is also integrated with the credit bureau, banking interface, and collection process.
Satyam mentions that the EMI-free loans offer 40 percent reduction in outflow as only interest liability is paid off. It allows the customer to keep flexible tenure and bullet repayment option. Personal overdraft allows one to utilise the preset OD facility and give them similar and easier credit revolving facility in a simple pay-per-use model.
Rental deposit loans are offered as an interest servicing product and hence catering to the customised need of salaried customers. Credit card takeover brings down the monthly credit card payment as the rate difference is far lower than the credit card company.
The others in the space
Since the demonetisation, the availability of credit in the market has increased, and the number of startups looking at the lending space is growing. In the first half of 2016, the space saw as many as 46 deals, amounting to $285 million, being made.
Also, the number of business lending platforms is fast growing, with big names like Finomena, Capital Float, Lendingkart, and Rubique making inroads. Capital Float raised Series B funding of $25 million last May, and Lendingkart too raised Series B funding amounting to $32 million.
Apart from this, there are platforms like IndiaLends, P2P lending platform Faircent, and Kudos Finance and Investment. There are also platforms like EarlySalary and Khadkee that focus on payday lending. Needless to say, lending has become one of the first segments to crack in the fintech space.
Numbers and future
The team at LoanTap also includes Amit Tewary as Head–Product and Business, who brings with him 18 years of experience in mortgage and retail asset underwriting and distribution. Arshad Ali, Product Head, has 12 years of experience in managing retail asset underwriting and distribution. Amit Tantia, Head–Structured Finance, has 11 years of experience in wealth management and retail distribution. Richika Chandra, Head–Credit, has nine years of experience in retail asset underwriting.
The team claims to have disbursed a total of Rs 4 crore and is projecting Rs 28-crore loan disbursement by March this year. The average loan size is currently at Rs 2.48 lakh and they are disbursed across Bengaluru, Delhi, Pune, and Mumbai.
The team aims to expand operations to Tier II cities and launch MSME loans soon. Also in the pipeline are strategic tie-ups with channel partners from the corporate and service industry.