True financial empowerment can only be achieved when access to financial opportunities is extended to every community and individual in India, shared Ajay Chaurasia, Vice President: Marketing, Product & Business, RupeeRedee in an exclusive interaction with Srajan Agarwal of Elets News Network (ENN).
In your role, how do you perceive the transformative impact of Digital NBFCs and Fintech apps on the digital lending space, and what unique contributions does RupeeRedee make in this evolving landscape?
Over the past few years, the digital lending landscape has undergone a significant transformation, driven by digital NBFCs and fintech innovations. This transformation has gained even more momentum in the wake of the COVID-19 pandemic. One of the key factors contributing to this acceleration is the enhanced accessibility to consumers and the faster processing enabled by embedded finance and technological infrastructure. RupeeRedee has been primarily dedicated to serving the underserved segments of the market, setting us apart in this domain. We provide loans to individuals who are underserved by traditional other conventional lending channels. Our focus is on providing small ticket loans to cater to the monthly and emergency expenses of an audience that may not be well-versed in managing bank statements, might not file income tax returns, and often lacks a fixed salary.
Risk management is a crucial aspect of lending, especially in the fintech sector. Could you elaborate on the significance of risk management when borrowers opt for loans from fintech companies like RupeeRedee, and what measures your organization takes to ensure prudent lending practices?
Lending goes beyond simply extending loans; it’s about ensuring that loans are provided to the right individuals. In today’s changing landscape, it’s evident how shopping behavior in India has evolved over the last few years, with many people opting for EMI payments, loans, and credit cards. For a lender, effective risk management is crucial, and it impacts several key areas:
1. Offering Loans to Creditworthy Consumers: It’s imperative to extend loans to consumers who have the means and willingness to repay. This ensures that borrowers don’t feel overwhelmed by financial pressure, promoting a healthier lending ecosystem.
2. Controlling Non-Performing Assets (NPA): Managing and minimizing NPA is critical. Controlling losses by reducing the number of loans that turn into NPAs is a key focus, as NPAs can significantly impact a lender’s financial health.
3. Providing Competitive Interest Rates: Offering attractive interest rates benefits both consumers and the lending company. When consumers can access loans at better rates, it reduces the lender’s need to increase credit costs, making it more sustainable for the long term.
To effectively manage these risks, our measures encompass the entire lending process:
1. Customer Sourcing: We meticulously source customers, ensuring that they meet the criteria for creditworthiness. This initial step sets the foundation for responsible lending.
2. Credit Evaluation: Our rigorous credit evaluation process helps in assessing the financial stability and repayment capacity of potential borrowers. By making well-informed decisions at this stage, we reduce the likelihood of defaults.
3. Efficient Collection: We prioritize hassle-free collection processes to make it easy for consumers to repay their debts. This approach not only benefits borrowers but also minimizes the burden on our end. We avoid cash collections to prevent potential issues and ensure a smooth repayment experience.
By adhering to these principles and practices, we aim to provide financial solutions that benefit both consumers and our lending operations. Responsible lending ultimately contributes to a healthier and more sustainable financial ecosystem.
With the increasing popularity of Buy Now Pay Later (BNPL) services in India, what role do you see the fintech industry playing in this booming trend, and how is RupeeRedee positioning itself to cater to the demands of consumers looking for such payment options?
Buy Now Pay Later still remains a topic of debate on a global scale. Although consumers are happy to use it, the associated risks have hindered its growth and made it slow, hence, RupeeRedee currently has no plans to enter this segment and will continue to focus on the personal lending space.
What is RupeeRedee’s vision for financial empowerment, and how does the company strive to achieve this vision by providing accessible and inclusive financial solutions to a wide range of customers?
True financial empowerment can only be achieved when access to financial opportunities is extended to every community and individual in India. At RupeeRedee, we are committed to this vision. We currently provide loans ranging from 2,000 to 25,000 INR, and we have plans to soon expand our offerings to include loans up to 50,000 INR.
One of the distinguishing features of our service is the flexibility we offer. We understand that the financial needs of individuals can vary widely based on their specific circumstances, and so we allow customers to choose the loan amount that best suits their requirements. Furthermore, we provide flexibility in terms of the loan tenure, which can range from 2 months to 12 months. This flexibility is determined based on the customer’s risk assessment and credit score, ensuring that the lending process is tailored to their unique financial situation. RupeeRedee is accessible to every Indian, regardless of their location. We take pride in having served customers from Andaman and Nicobar Islands to Lakshadweep, showcasing our extensive reach across the entire country.
Are there specific digital lending products or loan types that you believe have high growth potential in the near future, and how is RupeeRedee planning to tap into these opportunities to expand its market presence?
In our rapidly expanding economy, loan products have become omnipresent across various sectors, from e-commerce and hyper-delivery apps to traditional brick-and-mortar stores, all offering the convenience of pay-later options. Lending, a practice as old as human history, evolves to meet consumer demands. Despite this diversification, personal loans are still the top choice for consumers. Their enduring popularity is attributed to the flexibility they offer, enabling individuals to manage a wide range of daily expenses, from unexpected medical bills to home improvements or debt consolidation. In an ever-changing financial landscape, personal loans stand as a steadfast and adaptable solution for individuals seeking to navigate life’s financial challenges.
Looking forward to the upcoming financial year, could you share RupeeRedee’s growth plan and strategic initiatives aimed at achieving its objectives and maintaining a strong position in the digital lending market?
Our growth journey has been truly impressive. With disbursals exceeding 1000 Crores and an AUM of 250 Crores, we’ve established a solid financial foundation. Having provided over 1 million loans, we’ve demonstrated our ability to meet the diverse financial needs of our customers. Furthermore, our successful fundraising efforts have secured us a total of $11.6 million in equity until now, which will fuel the company’s growth plans, allowing it to scale operations, expand its product offerings, and further its efforts in driving financial inclusion in emerging markets. These milestones reflect our dedication to financial empowerment and our commitment to delivering accessible financial solutions.
Elets The Banking and Finance Post Magazine has carved out a niche for itself in the crowded market with exclusive & unique content. Get in-depth insights on trend-setting innovations & transformation in the BFSI sector. Best offers for Print + Digital issues! Subscribe here➔ www.eletsonline.com/subscription/
