Amid the ongoing concerns being raised by the Reserve Bank of India (RBI) regarding unsecured loans on digital platforms, MobiKwik, a digital banking platform, is planning to tap into the ‘new to credit’ customer base. MobiKwik is also planning to extend its financial products to the 4 million merchants on its platform.
Upasana Taku, Co-Founder, MobiKwik, said, “RBI is doing its work of protecting the consumers. The concerns are being raised because for a number of banks, ‘unsecured loans’ and ‘NPAs’ (Non-Performing Assets) are growing at concerning rates, simultaneously. What we should take out from this is that the banks and fintechs need to choose their partners more carefully.”
She said that MobiKwik is planning to raise less than Rs 1,000 crore in the IPO that is expected to come out in the next financial year. “We had decided against we decided coming out with our IPO of Rs 1900 crore in 2021 though we had obtained Securities and Exchange Board of India (SEBI) approval in view of prevailing market conditions. Instead, during this period, we adequately focused on increasing profitability. In FY23 we had a revenue of Rs 560 crore with negative Rs 50 crore EBITDA. This year, in the first half of FY24, we have touched a revenue of Rs 385 crore with approx Rs 8 crore PAT. We are confident that we can end this year with positive Rs 50 crore EBITDA.”
Speaking about the future plans, Taku said, “We are a country with 850 million bank accounts and only 50 million credit cards. This means that there are 400 – 500 million middle income group customers who do not have any accessibility to any kind of credit products. These “new to credit” customers are those who are not getting any services from private banks because their ticket size is small, which makes the business less profitable. While given the size of the market, public sector banks are not able to service all of them. MobiKwik wants to tap into that customer base and we are planning to do so in the coming years.
“MobiKwik aims to become a full scale digital banking application with all the possible banking services solutions at the platform. In the coming months we are planning to replicate all our financial products in accordance with the needs of the merchants on our platform. We are confident about our growth because we are one of the first fintechs to get a Prepaid Wallet License from RBI. We also have other licenses like Insurance Distribution License, Retail Investment Advisor License and Payment Licenses”, said Taku.
She further said, “Credit is not a giving thing, credit is a collecting thing. You should know whom you are giving money to and whether you will be able to collect it or not. There is no doubt that some players have made mistakes but that does not mean that everyone is doing it wrong.”