Credit-scoring fintech player CreditVidya has on-boarded the largest public-sector bank in the country as a client, founder and chief executive officer Abhishek Agarwal told Shritama Bose. The company, which recently raised $5 million in Series B funding, is set to launch a service to reduce the turnaround time for loan disbursal to under 30 minutes from a couple of days now, Agarwal added. Excerpts:
What are the funds from this round going to be used for?
Mostly they are funds that we’ll use to build our proxy in fraud industry segment and also to build our capabilities and technology insight, mostly in big data.
The last time we spoke, you had said you are working with 14 financial institutions. Has that number risen?
Yeah. So right now, the number is 20-plus leading lending institutions in India. We work for them. To give you a little more detail on that, we specialise mostly in unsecured debt, whether it’s a personal loan, two-wheeler loan or a consumer-durable loan. Also, we have done credit assessment of more than five million consumers till date.
Do you plan to venture into products beyond risk assessment?
The core belief is that as and when India goes digital, fraud risk is going to be much bigger than the credit risk. As things move more to digital, there is no manual intervention to check a transaction or an identity. So our focus in the last six to nine months has been to build our fraud and identity product suite. CreditVidya is going to specialise mostly in fraud and identity and credit assessment.
Are you working to explore the secured loans segment as well?
No, I think the unsecured market space is huge enough for us. About 350 million people in India do not have traditional bureau scores. The first purchase that they make – a two-wheeler or a TV – needs credit assessment. Our product has been built for the masses and not the top 50 million who can afford a house. We’ve done some bit of affordable housing, but not in the traditional mortgage segment.
So this means that for you to assess any borrower, they must have a digital presence, right?
Digital can be classified in a lot of different ways. Having an email address is also having a digital identity. You don’t need to necessarily need to have a Facebook (account) to have a digital presence. Even having a bank account and doing a transaction on that bank account is a digital identity or if you have made a payment through a Paytm or a Mobikwik, you have a digital presence.
The borrowers that you typically profile, would they be mostly from urban areas?
Mostly from tier-II and tier-III cities. Very limited numbers from urban areas. There is enough and more information on population from urban areas, where people actually have rich banking data or rich bureau data. Where people use us most effectively is for first-time borrowers.
What is your average turnaround time?
You will soon hear about a launch with one of our leading partners where we will be cutting down the disbursal time from a couple of days to under 30 minutes across smaller ticket-size loans. That entire process will be digitised. The risk assessment is one part, but after you have done that, you have to verify things like income, employment, contact information, etc. On all of this, we are jointly building a case study with one of our leading lender partners.
What kind of growth do you expect in terms of the number of consumers you will assess in FY18?
We do not necessarily look at the number of clients that we want to underwrite. We also want more lending partners to be on board. We will on-board at least one or two lenders every month. Our proposal has been accepted by the largest public-sector bank. We are in the process of doing requirement-gathering and design for them. We should have 40-plus lending partners by the end of FY18.
We are also seeing interest from wallet companies, payment companies, insurers and rental companies. Even if it’s not about credit and I am only shipping an appliance to someone, is there risk in it? So we have seen huge interest from the BFSI (banking, financial services and insurance) sector as well. In the next two-three months, we should be able to on-board at least a couple of them, if not more.