The Covid-19 pandemic has greatly accelerated the adoption of digitization across the nation. With daily reports of increasing digital payments, I think it is safe to presume that digital lending too will see a boost, if not during the pandemic, surely post COVID, says Gaurav Jalan, CEO & Founder, mPokket, in conversation with Rashi Aditi Ghosh of Elets News Network (ENN).
- Give us an overview of your products & services.
mPokket is an Instant Loan App that provides loans to college students and young working professionals. Borrowers can avail loans ranging from Rs 500 to Rs 20, 000 and the amount is instantly credited to the users’ bank account or digital wallet. One can choose to repay in up to 3 months along with a nominal interest charge. The borrowing limit can increase over time based on multiple factors, including timely loan repayments.
mPokket started back in 2016 with the vision to improve the lives of those who need quick cash for an urgent need but do not have access to credit cards or other means of formal borrowing. The entire process is online and usually takes thirty minutes from downloading the application to the disbursal of the loan amount as long as the information provided by the user is correct.
Unlike other instant loan apps, we do not restrict our services to a limited set of cities or colleges. One can be from any college or be working in any city or village in India and we will provide you with a loan as long as you provide valid documentation. Our ease of use is what sets us apart and has helped us become the best instant loan app in India. Our goal is to increase financial inclusion by making financial services available to the underserved and new to credit population.
- What are your views on the digital lending segment in India? How did Covid-19 impact the sector?
Traditional lenders do not cater to the needs of low-income people and those that are new to credit or with limited credit history. New-age digital lending platforms have done a fantastic job of bridging this gap. These new-age lending platforms help provide credit to these people, with a simple and intuitive onboarding procedure and faster loan disbursals, helping them reach out to a much wider customer base, that was not served by the traditional lenders.
However, strategic partnerships between the traditional and new-age lending platforms are the major growth driver for digital lending, which has obviously helped improve financial inclusion across the nation as a whole. The initiatives taken by the government have also helped in the growth of the sector in the past few years. Primarily, cost-effective internet availability is what has led to the rising adoption of digital lending across the nation. The entire wave of digital lending, which started as web portals giving out loans, has come a long way now in a span of just a few years, with consumers being able to get loans with just a tap on their phones. The rising numbers of players in the sector in itself is testimony to the growth potential of this sector in the times to come.
With banks and NBFCs tightening their purses for giving out fresh loans, and rising NPAs, the sector is not doing particularly well post COVID. Rising unemployment has led to consumers being unable to pay back their existing loans and most lenders drastically curtailed fresh disbursements as they hardened their risk controls. However, despite everything, we are happy to share that mPokket has been one of the few lenders in the industry that has still been onboarding new customers and giving out fresh loans, and that lending from our end never took a pause, despite all the market conditions.
- What opportunities do you see in disguise for the sector during the pandemic?
The sector needs to adapt to changing consumer preferences and demands and mold their products to suit the consumers’ requirements, to really find an opportunity in this pandemic. It is the right time to invest in product expansion and provide value added services to our consumers.
The pandemic has greatly accelerated the adoption of digitization across the nation. With daily reports of increasing digital payments, I think it is safe to presume that digital lending too will see a boost, if not during the pandemic, surely post COVID. With the disruption in incomes and cash flow seen during the pandemic, people are now more conscious that they need to have access to credit in times of such situations, which is leading them to explore digital lenders.
- What innovation is mPokket bringing to streamline the options for consumers?
At mPokket we continuously strive to make ourselves more valuable and relevant for our users. We have introduced multiple disbursements and repayment options and features overtime to make the lives of our customers easier by delivering a solution that is as customized to their requirements as possible.
Furthermore, we do not depend on external Credit Information Bureau scores to determine the credit worthiness of our users. Instead, we have developed our own Proprietary Algorithm which incorporates hundreds of variables based on alternate data. This approach has helped us disburse money to a large segment of users who are neglected by other lenders, while at the same time maintaining low NPAs.
5. Which technologies, in your view, will help the expansion of the sector on near future?
AI, ML and data analytics are going to reshape the entire lending space. AI helps detect fraud and onboard customers quickly and seamlessly by reading and interpreting the information submitted by borrowers. This helps increase conversion rates and reduces customer acquisition cost.
Analytics and NLP based algorithms also allow lender to provide better customer support through more customized responses. Newer technologies enabling self-learning chatbots, can help improve the customer experience even more, by making interactions with these chatbots more human like than before.
ML based credit underwriting algorithms help digital lenders analyze alternate data (other than the bureau credit score) to lend to people with almost no credit history, helping us to bring financial inclusion to a large segment of the population.
- What are your plans for 2021?
Despite having grown very rapidly over the last few years, we are still only serving a tiny fraction of the addressable market. In 2021 we look forward to continuing to add new customers in order to serve a larger section of the population. We are also working to introduce more options for our users like pay via EMI checkout at popular shopping destinations. Our goal is to make our users more financially independent and we will be launching multiple initiatives towards this goal in 2021.