Online lending platform Credy facilitates small-ticket personal and school fee financing loans, claims to approve loans in 24 hours. It aims to disburse loans worth Rs 100 crore in the next two years.
At a Glance
Founders: Pratish Gandhi, Abhash Anand, and Harshit Vaishnav
Year it was founded: 2017
Where it is based: Bengaluru
Problem it solves: Online financing platform that provides small-ticket personal loans
Funding raised: $1.4 million
Despite the economic surge, access to credit still remains a challenge in India. While traditional loans involve a lot of paper-work and are time-consuming, newer platforms are still in nascent stages.
The time was perfect for a new entrant into the growing fintech market space: Credy. Founded by three ex-Goldman Sachs employees, Pratish Gandhi (29), Abhash Anand (28), and Harshit Vaishnav (29), Credy is an online lending platform.
Harshit says, “Finance and policy is something that interests us a lot. We realised that access to credit in India is limited due to lack of good authentication, profiling mechanisms, and lack of relevant data. We lent to rural entrepreneurs via technology-enabled platforms and realised that the risks can be controlled if things are done well.”
Started in 2017, Credy’s mission is to expand credit access in India. “That is also when a lot of new payment and authentication technologies backed by Aadhaar started gaining legal footing. We decided this was the right time to help fix this problem,” Harshit says.
Credy facilitates small-ticket, online personal loans, and school fee financing loans by partnering with NBFCs for the lending. The entire customer journey is on Credy mobile and web applications. The average ticket size is less than Rs 50,000 and the process is primarily online.
It partners with educational institutes, mainly schools, to provide financing option to parents for education fees.
“We aim to use technology, data, and structured financing options to give our customers a seamless way to avail loans for various needs, starting from debt refinancing to emergencies or lifestyle expenses like travel. We have gone live with a lending partnership with Fullerton India and are onboarding more lenders,” Harshit says.
Good risk management
Talking about the challenges, Harshit says, “One of the main challenges in online lending is ensuring good risk management while offering a fast and easy process. We have invested heavily in risk management and fraud detection via our in-house technology and data science team. We track NPAs closely and have kept them under control. Coming from a risk management background, we know the pitfalls of lending too aggressively and compromising the credit quality of the portfolio.”
The team size of Credy is 19 people, with the biggest team being technology and data science.
Harshit says, “We have experience in setting up and leading teams. At Goldman Sachs, we used to head global teams of similar sizes. We make sure that the entire team knows the financial context of the problem we are solving. That helps everyone be aligned to the company mission to ‘facilitate credit and economic growth through financial trust, innovation, speed, and responsibility’.”
To avail a loan, the user needs to sign up on the platform, go through the required documents and details, and sign up with their Aadhaar number, avoiding the need of other documents, loan agreements, and photographs. Credy claims to approve loans in an average time of 24 hours with bank transference in another 24 hours.
While keeping the loan book and revenues undisclosed, the startup claims to have seen a growth of 40 percent month-on-month.
Credy has so far raised $1.4 million from investors like Y Combinator, Kholsa Ventures, Vy Capital, and some entrepreneurs turned angel investors.
SME and personal loan financing has traditionally been limited to businesses and individuals that have solid financial credentials or assets to back the loan. However, startups such as LendingKart, IndiaLends, Faircent, Kudos Finance and Investment, AnyTimeLoan, and Capital Float are making it easier for people to receive loans by leveraging technology and alternate data sources to underwrite.
Talking about their differentiator, Harshit says, “Our strong focus is on structuring financial products that are relevant to customers and using technology to deliver them efficiently. An example is providing school fee financing to parents to reduce the burden of large fees by converting them into installments.”
In the future, Credy plans expand its loan book, fund operations, and to continue to invest in great talent. “We will scale up to new markets and launch new financing products. The focus is on identifying customers who are not directly served by financial institutions and structuring viable financing products for them.”
It plans to disburse loans worth Rs 100 crore in the next two years - something that the founders feel is achievable without compromising on the credit quality of customers.