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Fintech start-up India Lends, which operates as an online marketplace to connect potential borrowers with lenders, is looking to tap the unsecured lending market in Tier III and IV towns.
The Delhi-based company, which was set up in 2014, primarily caters to customers in Tier I and II markets at present.
According to Gaurav Chopra, Founder, India Lends, close to two million prospective borrowers visit the company’s website each month looking for personal loans, small loans and credit cards; and the number has been steadily on the rise.
“Our focus was to attack Tier I and II cities where mobile penetration is higher, which helps us get the kind of data we need. We started with four Tier I cities and then added 10 more. We then went to Tier II cities and we will now move to Tier III cities,” he told BusinessLine .
Consumer creditIndia is an under-served market. The approval rates for consumer credit is over 40 per cent in the UK, the US and other western nations while the same in India is below 10 per cent. So, very few people get credit in India, Chopra said, explaining the opportunity behind the company’s business model.
India Lends, which has tie-ups with multiple banks and NBFCs, provides an interface between end-users and lenders. Apart from allowing customers shop for loan products it also offers credit scores and financial education.
“Currently, the few people who have good income and have borrowed in the past and, thereby, have a credit score, are able to borrow. The remaining is not being catered in a holistic manner by the existing financial infrastructure,” he said.
The company brings such people on its platform, processes information captured through digital sources and offers recommendations regarding the best product or lenders for a customer to choose. The services are free for customers; financial institutions pay the company on a transactional basis.
Through the use of technology, the company manages to get better approval rates.
“Digitisation has helped lenders lend more effectively as they are able to underwrite their risks better with availability of adequate information,” he said.
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