[Startup Bharat] This Ahmedabad-based fintech platform disburses 1,500 payday loans every month

When 32-year old Adarsh Mehta was pursuing his MBA at IE Business School, Madrid, he was intrigued with the rise of payday loans or instant credit platforms in the US and Europe. 

In order to serve the salaried and self-employed people back home, Adarsh started Creditt in 2017. Ahmedabad-based Creditt is an app that disburses real-time, short-term (one to 28 days) and small ticket sized loans ranging from Rs 5,000 to Rs 25,000. 

“I was keen to introduce a product which would serve the salaried, self-employed, and the large unbanked segment in India where me and my team saw a big gap and a dire need of instant/emergency loans. Also, with a perfect combination of technology and risk mitigation strategies, we decided to create a prototype and reached out to our potential end-users to gain their feedback and understand the real need,” says Adarsh.

While it was started in 2017, the platform claims it officially began its operations in February 2019.

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What does it do? 

The platform, which caters to the unbanked, unorganised, and salaried segment of the society, is 100 percent paperless and has a proprietary scoring and risk assessment engine. Adarsh says the loan is disbursed to eligible borrowers within minutes of on-boarding.

“We provide our customers with an instant solution to their money needs during the time of emergency through a very user-friendly platform. Given the vast unbanked segment with no credit (score) footprint, our other challenge was to build a robust scoring and decision engine,” says Adarsh. 

The working 

While the platform was set up in 2017, it officially began its operations in February 2019. According to the startup, its target audiences is in the age bracket of 18-60 years, and in the income range of Rs 3 lakh to Rs 9 lakh per annum. Adarsh says, the customers know the basic usage of smartphone and internet, but mostly don’t have access to bank finance or are in urgent need of small ticket finance.

“We are targeting people with low or no credit score, due to which they are left unattended by the financial institutions,” says Adarsh. The app begins with the user logging in their details, basis which their personal and financial details are registered. The algorithms then look at trends and behaviour across platforms, basis which risk is decided and the loan is disbursed. 

The identification details include borrowers’ Aadhaar card for verification. Once successfully verified, they can fetch their legal name, address, date of birth, photo, etc.

“These details will help us gain meaningful insights on their existing financial capability and borrowing ability. The datasets will allow us to understand the borrowers’ inflow and outflow scenarios along with their monthly obligations, EMIs, etc. Based on this, our scoring engine will analyse borrowers behaviour and adjudicate overall risk, income to loan ratio, and finally provide the loan,” says Adarsh. 

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Setting up the team 

After completing his MBA in August 2016, Adarsh started looking for co-founders to help him build the platform. In September 2018, he was introduced to Tejas Shah and Namra Parikh through a family friend. 

“The three of us instantly hit it off well. Tejas had moved to India from Canada and had worked for a decade with Credit bureau and financial domain’s like Transunion and American Express. Namra had over a decade of expertise in managing technology innovations, data mining, AI, and ML. It was the perfect team to build our dream product,” says Adarsh. 

With his background in finance, operations, marketing, and management, the three got together and formed Creditt under the mentorship/coaching of two industry experts - Parag Mehta (FRR Forex) and Naresh Shahani (BMGI). 

“Today we have a strong team of 25 who manage technological innovations, collection, marketing, operations, accounts, and other verticals of the company,” says Adarsh. 

He adds that their goal is to provide instant credit within minutes and without the hassle of paperwork. 

“The biggest challenge was to digitise the entire process in a country like India where the data available is not organised or is not easily available in a digital format,” says Adarsh. 

Numbers and funding 

From February 2019, the team claims to have disbursed 6,000 loans, with a total disbursement amount of Rs 7.5 crore. Adarsh adds that their current run rate is at 1,500 loans a month, which will double by March 2020.

“We have over nine lakh KYC (know your customers) registered, and have been registering 4,000 new customers on a daily basis. We also have over a million downloads (80 percent android and 20 percent iOS). The company has been revenue positive from day one, and approximately has a revenue of Rs 90 lakh,” says Adarsh. 

The team has raised $3,00,000 from an HNI and has got in principal approval to raise additional $7,00,000 from a family office.

“From the day we started working on the app, we saw a huge opportunity in the self-employed segment, where very few players were lending. So, we decided to solve that problem by offering real-time loans to the said segment. The real time loans we offer is something that sets us apart from our competition. We have our proprietary scoring algorithm and don’t rely on credit bureaus data as we aim to cater to the segment which is new to credit,” says Adarsh.

Currently, Creditt competes with the likes of Pune-based EarlySalary, India’s earliest consumer lending platform. EarlySalary ended last year with a Rs 275 crore balance sheet, and expects to increase it to Rs 800 crore by the end of 2020.

“We strongly believe the market is huge enough to accommodate multiple players like us. Our revenue comes from the processing fee and the service charges that we charge to our NBFC partner. We have a 50:50 mix of self-employed and salaried segment who borrow from our platform,” explains Adarsh. 

Creditt is also in the process of applying for an NBFC licence under the Creditt brand so as to start lending from its book.

“In 12 months, we aim to achieve an outstanding of 15,000 loans per month. We are also looking at introduce new loan products, longer tenure loans, and introduce new financial products to complement our existing loan product,” says Adarsh. 

(Edited by Megha Reddy)

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