Paisabazaar raises ₹200 crore, plans to triple loan disbursement

Financial products comparison site Paisabazaar has raised around ₹200 crore from its parent company EtechAces, which also runs insurance products aggregator Policybazaar.

Naveen Kukreja, Chief Executive Officer and co-founder of Paisabazaar, told BusinessLine that the funds will be used to scale up the lending business by tripling the loan amount from ₹360 crore every month last year to ₹1,000 crore per month in 2018.

Besides, the company will also invest a part of the amount in brand-building exercises to become a go-to platform for all financial products — excluding insurance, which is handled by its sister arm Policybazaar — and also invest in technology, data analytics and machine learning.

The company, which offers comparison of products such as credit cards, personal loan, gold loans, business loans, home loans and mutual funds, among others, has created a proprietary feature called Smartmatch that helps connect consumers with the right set of financial service provider by understanding their requirements through artificial intelligence and data analytics.

“We are quite optimistic about the growth of unsecured loans in the Indian market this year. We have a strong loan book in the business and personal loan — ₹260 crore from the total monthly loan disbursal of ₹360 crore.

“We expect this to grow further on the back of smartphone and internet penetration, and digitisation of the KYC process because of Aadhaar,” Kukreja said.

“While we have achieved the leadership position in the lending segment, we are at only 2 per cent of the total unsecured lending market. In the next four years, we hope to reach 10 per cent of the market,” he said

He further added that unsecured loans or consumer loans will also grow because of improved credit performance and delinquencies of the the universal banks.

According to data from the Reserve Bank of India, consumer loans are rising at 16.6 per cent. This in turn is leading to an increase in the number of fintech players trying to connect consumers — even with no credit history — with banks, using technology.

“Till about 10 years ago, retail lending used to happen without credit bureaus, and retail-lending penetration historically has remained low in India,” he said.

Kukreja said the consumer lending market is still quite under-penetrated, and the approval rate is quite low at 35 per cent.