Pepper Money India is planning to launch three-to-five co-branded cards in the next two years, chief executive officer and founding member Abhishek Kothari told Financial Express in an interaction.
The company will enter into co-branding arrangements with banks for co-branded credit and prepaid cards. But Kothari clarified that the cards will not be linked to pre-approved credit lines.
“The tier-2 market has many layers to it. The tier-2 young professional will operate very differently from a tier-2 business man. I think we will stay within the range of three-to-five cards for next two years,” he said.
On Monday, global consumer finance company Pepper Group announced that it will invest $150 million over next four years to establish a financial technology company in India under the Pepper Money brand.
Pepper Group has $21 billion in assets under management (AUM) of self-generated loans through the Pepper Money brand. It has a further $55 billion third-party loan assets through its Pepper Advantage brand.
“With an existing presence across Australia, UK, Europe, South Korea, Japan and South-East Asia, the launch of Pepper Money India signifies a long-term commitment to the Indian market,” the company said in a press release.
It has appointed former FlexiLoans co-founder Kothari to spearhead the financial technology company in India.
With plans to launch in August, Pepper Money India will target the 150 million households in tier-2 and tier-3 cities. The company plans to hire a team of over 200 members.
While Pepper Money India will primarily focus on co-branded cards, it will also offer personal loans. The average tenure of these loans will be 12-18 months and the ticket size will be Rs 75,000-100,000.
“We will have to tailor the personal loans to the tier-2 segment. We have to be synonymous to responsible lending in this market. We as a group believe that the product should be simple to understand and should create positive behaviour in the customer,” Kothari said.
“We are not in a rush. My rush is not to create the largest AUM in the shortest period of time. My rush is to understand the customer as much as we can so that we can build a good responsible lending business in the country.”