Every Fintech must have multiline product strategy to ensure sustenance: Akshay Mehrotra, Co-Founder and CEO, EarlySalary

Akshay Mehrotra, Co-Founder and Chief Executive Officer, EarlySalary

Covid-19 pandemic which originally showed up at the end of 2019 and the induced lockdown during March 2020, brought several unseen challenges for industries across the globe and the uncertainty seems to continue with the new wave where the infectious spread of the virus is yet again disrupting the smooth running of businesses and the economy. As the COVID-19 pandemic continues to create uncertainty, several fintech came under stress and are finding out ways to leverage unique assets and skills to seize new opportunities and maintain continuity. To understand, how fintechs are dealing with the challenges and finding opportunities within the crisis to maintain continuity and onboard new customers, Elets News Network (ENN) spoke to Akshay Mehrotra, Co-Founder and Chief Executive Officer, EarlySalary. In an exclusive discussion hosted during the 5th BFSI Leadership Summit, Mehrotra spoke about the significance of multi-line product strategies.

Excerpts of the conversation:

In the last 18 months, the BFSI sector has seen two NBFC crisis, two banking collapses, and then covid, so we are hardened as a business model.  We saw hyper-growth last year. As accompany we grew by five times. And, we were able to cater to 80, 000 customers a month. Post covid outbreak, two things happened-one is uncertainty in the business and we had to ensure that our business operations are done in a very cleaned manner. We continued to lend during the entire covid crisis and offcourse our norms were much higher.

 So, the 120 crores came down to 60 crores. And also our balance sheet de-grew as we controlled the customer services quality etc. During covid, our losses were one and a half billion dollars and that is quite low for someone who does business of our volume. The second was the comeback. Within this, one was the impact of moratorium, where for classic banks and NBFCs, 25-30 percent of the customers were on the moratorium. For us, 13 percent of the people went on the moratorium and 85 percent of the people came out of it in the moratorium itself. This suggests that we have 2 percent of the portfolio going into the DBT cycles, so we can go back to focusing on growth again.

When we talk about the crisis, I would like to say that we have come out much stronger. In the month of December 2020, we did 120 crores and in January 2021, we are back at pre covid number.  We have started accelerating the balance sheet again. We are adding almost 130-140 crores to the balance sheet.  This suggests that both supply-sides are available once we are able to add 35-45 crores to the debt and grow as a company.

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 Another important aspect is portfolio quality. We are witnessing 30 percent better portfolio quality as compared to pre covid scenario.  The customer quality now coming in is better. Customers are now conscious about their loans and do not want to over-burden themselves and it is very important to run businesses like that.  I think

The crisis also taught us two things, one is you cannot be monoline focused and you must have a multiline product strategy. We also launched two new products and we were incubating card business in pre-covid times. So, we launched it properly with the digital video KYC stack.

 Currently, we are doing 5,000 cards monthly which is quite good in the new business and we launched edtech on EMI and checkout. Together that business is doing three to four thousand new customers a month. So, if you look at the trajectory growth levels, we are doing upwards of 20,000 new customers a month which is amazingly large.  We are clearly demonstrating hyper-growth trajectory and I think the market is looking quite positive.  All covid provisioning losses are over and we are back to net positive business and we are hoping next year it will be the year of fintech which can really evolve and make it much larger.

Watch the session here: 

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