How this Gurugram-based fintech lender is helping underserved borrowers get small loans

Despite the presence of more than 30 banks and 90 commercial banks, and thousands of fintech and financial services firms, India is a majorly underpenetrated market when it comes to formal credit. Ironically, there is a huge unorganised loan market that lends at backbreaking rates, essentially exploiting those in dire need of credit.

Most people depend on these unorganised, predatory lenders because they’re not able to qualify for a bank loan on account of not having a credit portfolio or "creditworthiness". Students, job seekers, self-employed individuals, part-time workers, or people who don’t have bank accounts are most likely to be rejected for a bank loan because they don’t have a credit profile with CIBIL yet.

That didn’t sit well with Artem Andreev, country head of RupeeRedee, who believes access to credit should be democratic.

RupeeRedee solves that problem. Founded in 2018 by Jitin Bhasin who relinquished his role in 2020, RupeeRedee is essentially a digital lending platform that targets first-to-credit customers and those who’ve not been able to raise a credit line from financial institutions.

The startup starts users who don’t have a CIBIL score off with a small ticket-size loan at Rs 2,000, and offers a maximum of Rs 25,000 to underserved customers. Being completely digital allows the fintech firm to offer its services across pin codes in India, and it disburses funds almost immediately.

"We started with a mission to make lending accessible to all parts of our country, offering small ticket-size loans to the majority, and through this, we are helping them build their credit score as well," Artem told YourStory.

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RupeeRedee has seen almost three million installs from the Google PlayStore, and hopes to hit five million by the end of the current fiscal year. It has disbursed nearly three lakh loans to date to individuals via its online platform, end-to-end, including paperwork and disbursal.

Differentiation and revenue model

A unit of Digital Finance International, which has more than 20 international fintech brands across several countries, RupeeRedee’s Artem says the startup offers loans at industry-competitive rates — between 18 percent and 36 percent — and follows all RBI guidelines.

RupeeRedee makes its revenue on the interest rates, as most lenders do. It broke even in the first year of operations, and is currently profitable.

"We serve 50-60 percent repeat customers every month, and our target audience is primarily millennials with an active PAN card. The majority of our clients are lower-salaried individuals from Tier 2 to Tier 3 cities," Artem says.

Having raised close to $1 million in debt in 2021, Artem says the company is looking to raise another $3 million in 2022.

"’Good debt’  is the need now as equity is the most expensive form of funding. We want to build more credibility in the market by servicing such debt successfully," he adds.

The company has also raised $6 million from its parent company, Digital Finance International.

While Artem did not specify how much loan RupeeRedee had disbursed so far, he said his goal is to close the loan book at Rs 250 crore this fiscal year.

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The Gurugram-headquartered company competes with a multitude of loan platforms in India, including KreditBee, Kissht, EarlySalary, LoanTap, among several others. Its competitors also include online financial platforms such as Simpl, Capital Float, LazyPay etc that offer BNPL — buy now, pay later loans — that are also small-ticket size loans.

The RBI last year put strict checks and balances in place to delist and warn the public against fraudulent loan applications and platforms that used brute force to recover loans from borrowers in case of late repayments or credit defaults.

The central bank said borrowers must independently ensure if the lender is approved by the RBI, keep an eye on red flags, including checking user reviews on Google and other platforms, reading terms and conditions thoroughly, refusing to accept loans from unauthorised sources, and watching out for anything else that may strike them as inconsistent or unacceptable.

More literature on the RBI’s guidelines can be found here.

Between 2020-2025, India’s personal loan market is expected to grow around 10 percent.

In the FY 2017-2021 period, the loan market rose 100 percent to Rs 156.9 lakh crore, according to a report by Indian credit bureau CRIF High Mark, entitled’ How India lends’. Of this Rs 156.9 lakh crore loan book, small-ticket personal loans (less than Rs 1 lakh) took a 49 percent share, and led the growth overall, versus retail and commercial loans.

With India’s appetite for personal credit growing, startups such as RupeeRedee are expected to continue to see substantial growth and traction.