Gurugram-based fintech Rupeelend leverages technology to assess the ‘true’ credit-worthiness of borrowers, and provide instant, short-term credit.
What Aadhaar is to your personal identity, CIBIL score is to your financial. Lenders and credit institutions check CIBIL scores – that range from 300 to 900 – before evaluating any borrower’s loan application and most banks look for a minimum score of 750 before approving a loan application. For a credit card, the minimum CIBIL score is 650.
If, by any chance, someone with a lower score does get approval, be sure to be slapped with unattractive terms.
Seeing that millions of borrowers in India are left without access to loans due to poor CIBIL scores, Siddharth Ravindran decided to launch Rupeelend.
Gurugram-based Rupeelend leverages technology to assess the “true” credit-worthiness of borrowers.
In the beginning
Launched in June 2016, Rupeelend is a digital lending platform that specialises in providing instant, short-term credit to consumers and businesses.
Things were set in motion in 2013 when Siddharth’s family faced a medical emergency. He used up his savings and insurance but was still short of cash. That is when he saw the need for a platform that could provide easy credit options.
Siddharth, who was earlier the head of products – loans and credit cards at PolicyBazaar, says, “Banks normally take 7-10 days to give loans to new customers. We started Rupeelend to substantially reduce the time taken for loan disbursement.”
The Founder and CEO says Rupeelend has tied up with 10 NBFCs. When a customer applies for a loan, the firm processes the application and sends a request to NBFCs who then disburse the loan. Technology helps decide how much can be lent to a borrower.
The startup claims to process a loan application for a new borrower in 2 hours, while customers who return for loans can have their applications processed as quick as in about 10 minutes. Like other financial institutions, Rupeelend needs KYC-related documents such as bank statements, salary slips, PAN card, Aadhaar card, etc to process applications.
Keen to disrupt the credit market by minimising human involvement and time, Rupeeland uses artificial intelligence-driven decision-making systems to ensure faster results. Apart from using traditional metrics to gauge a loan seeker’s credit worthiness, the company employs algorithms that assess an applicant’s credit-worthiness by tracking their mobile data usage and social metrics.
Once a customer downloads the Rupeelend app, it asks him/her to log in through social networking sites. Apart from analysing the contact list on a user’s phone, it also scans whether the customer’s community has any defaulters. Siddharth says,
“If a customer has too many defaulters in his contact list, it shows in a poor light on borrower. We also observe the kind of comments he makes, and many other factors….We make a score of these metrics, called Rupeelend profile score.”
The startup also checks what transactions are done on credit cards. Credit card transactions are generally not captured in bank statements, and Rupeelend uses customers’ phone and SMS data to access it. Speaking about privacy, Siddharth says,
"Apart from taking prior permission from customers, we also have disclaimers. We also don't pass this information to others, and we work within the purview of the RBI's rules."
“Besides ensuring faster disbursal of loans via an EMI-based model with tenure of one to 12 months to customers with 650+ CIBIL scores, we also offer loans in the one to 30-day model to people whose credit image/score is low or does not comply with NBFCs/Bank/Bureau guidelines,” Siddharth says.
“We offer loans to people with credit score even below 650, making Rupeelend the only player in the industry offering instant short-term loans. The use of AI helps Rupeeland to reclassify borrowers and unlock their value, based on a ‘truer’ assessment of borrowers,” he adds.
The challenges faced
The major challenge was the risk involved. Rupeelend started by offering loan disbursal in two hours, but the challenge was ensuring that loans were being offered to the right person – all this under the startup’s credit assessment policy with an approval time of 15 minutes.
Rupeelend overcame these challenges by focusing on technology to drive credit assessment decisions.
“Our technology includes an AI-driven credit engine and machine learning, which includes multiple algorithms that analyse a customer on several data points collected about customers,” Siddharth says.
Rupeelend currently operates out of six major cities: NCR, Mumbai, Bengaluru, Pune, Chennai, and Hyderabad.
“We started this venture in 2016. At that time, there were only a couple of fintechs in this segment, so we never knew how the customer would react to this kind of product. However, business has grown really well and we have established ourselves in this short-term retail lending space,” Siddharth says.
The founder and team
Rupeelend, which began life as an eight-member team, including the founder, has grown to a team of 80. Siddharth, who has also worked with HSBC and IndiaBulls, envisioned financial inclusion for all in the digital age.
“We have dedicated teams to take care of different verticals like sales, IT, online marketing, collections, and business alliances. We have developed our own tech-enabled systems for customer acquisition, inside sales, customer experience management, and operational excellence,” Siddharth adds.
The market and future
India’s market size for short-term loans is close to $10 billion, Siddharth says.
There are many fintech companies in the market now, including Myloanbuddy, FlexSalary, MoneyinMinutes, CASHe, Availfinance, QuickCredit among others, and Rupeelend competes with them. However, the market is huge and Rupeelend already has 25,000 customers in its portfolio, accounting for a total of Rs 100 crore in loans in the last three years, with an average ticket size of Rs 40,000.
The revenue it generates is through a fixed percentage it gets from NBFCs once it completes a cycle of lending. The startup not only helps borrowers get loans, but also provides an end-to-end solution for the loan cycle including collection. It claims to have a monthly revenue of Rs 50 lakh. Its non-performing assets stand at 0.8 percent. The data it gathers through its technology has helped it to maintain a low NPA level.
It is expecting annualised net revenue of Rs 8 crore this financial year. Rupeelend touched breakeven in August 2017 and is a self-funded venture till now. It is also a profitable company and is open to external round of funding.
Rupeelend aims to target one lakh customers by 2020 and wants to take the loan book size to Rs 800 crore in the next two years.
“We plan to start offering short-term loans in six to seven more cities by the end of this year. These include Kolkata, Ahmedabad, Jaipur, and Chandigarh; we also want to enter Tier II cities by the middle of next year,” Siddharth concludes.