[The Turning Point] How this VC became an entrepreneur to offer instant credit with his startup
The Turning Point is a series of short articles that focuses on the moment when an entrepreneur hit upon their winning idea. Today, we look at how MoneyTap, a platform offering instant online credit, came to be.
Back when Bala Parthasarathy was a VC with Prime Ventures, India was undergoing a massive digital transformation. Startups creating apps for online shopping, ride-hailing, and food delivery were cropping up on an almost daily basis.
However, he noticed that too few banks/NBFCs were working on products addressing the consumer need for credit and wondered if this might be an interesting area to explore.
While doing his primary research, he realised that middle-class borrowers wanted to be able to avail credit without the hassle and humiliation that usually followed the process. What he saw was that most financial companies simply did not have a customer-oriented approach, nor did they intend to provide better services. That’s when the idea of bringing convenient, flexible, and fast credit to the masses by introducing technology into the process came to being.
This led to the birth of MoneyTap in 2016. Bala was then joined by his friends and serial entrepreneurs Anuj Kacker and Kunal Varma.
“The decision was however to go app-first and provide consumers with a digitally and privately accessible line of credit. This value addition subsequently helped MoneyTap stand out in the market,” says Bala Parthasarathy.
[The Turning Point] Bored with the corporate life, these 3 techies started CleverTap to solve the user retention problem
What does it do?
App-based MoneyTap offers quick, flexible, and hassle-free credit of up to Rs 5 lakh at interest rates starting at 13 percent per annum.
“By making credit accessible to diverse customer segments in multiple cities, MoneyTap is leading the way in revolutionising consumer lending in the Asian fintech space,” says Anuj Kacker.
MoneyTap Credit Line is offered in partnership with leading banks and NBFCs. Customers can apply for a credit line on MoneyTap’s free Android or iOS app and get an instant credit decision within minutes.
“We are a consumer lending company so our customers need to know about us. Initially, it was difficult to explain the product - a credit line. They would constantly ask us why we couldn’t give them a one-time term loan. It took a while to explain the features and benefits of a personal line of credit and convince them that it is better as it addresses their need for borrowing small amounts. However, we had to run the risk of losing out valued customers just because they were not ready for our product,” explains Bala.
Another challenge he says was onboarding the right bank as a lending partner. “We pitched to many banks and RBL Bank was very receptive. And it has been a great partnership as we have worked seamlessly with their tech, risk, policy, compliance, and marketing teams.”
The MoneyTap app is available in English, Hindi, Tamil, Telugu, Kannada, Gujarati, and Marathi.
Where does it stand now?
The founders claim that MoneyTap has been on a phenomenal 5X growth trajectory with a loan book of Rs 1,000 crore and a disbursal run rate of Rs 2,500 crore a year. Currently, present in over 50 cities, MoneyTap plans to expand further and be available in over 100 cities across India.
“With our alternate data and lending models, we hope to reach new segments of consumers. We plan to expand the role of our tech and data teams to combine UI and AI - this will lead to customised credit solutions for diverse customer segments. Our vision is towards financial inclusion of underserved categories in India,” says Anuj.
The team has also recently received its NBFC licence from the RBI. With this, it aims to scale its business further through a strong focus on tech innovation, inclusive growth, and hybrid lending strategies.
(Edited by Evelyn Ratnakumar)
How has the coronavirus outbreak disrupted your life? And how are you dealing with it? Write to us or send us a video with subject line 'Coronavirus Disruption' to firstname.lastname@example.org