Fintech startup MobiKwik has converted around 23% of its total 130 million registered user base into monetisable customers by selling credit products, including buy now pay later (BNPL) and peer-to-peer (P2P) lending, a top company executive told FE. However, out of the 30 million pre-approved customers, only around 3 million were active credit users as of March 2022.
In FY21, credit transaction volumes on MobiKwik’s platform stood at 4 million which went up sharply to around 20 million as of FY22, Upasana Taku, co-founder and COO, MobiKwik, said in an interview.
“Credit (products) are currently fetching highest growth. In the last financial year, we have grown our credit business more than 10X in terms of revenue. And today, credit products contribute more than 50% of the monthly revenue,” Taku said.
Founded in 2009 by Bipin Preet Singh and Taku, MobiKwik currently offers payments, credit and financial services products on its mobile app. Though it started off as a payment wallet, it diversified into BNPL, P2P lending, insurance, mutual funds for consumers and payment gateway for businesses.
Recently, the company launched an industry-first P2P lending product named ‘Extra’ that offered investors (or depositors) up to 12% interest annually with a minimal investment of Rs 1,000.
MobiKwik believes a low minimum deposit rate will remove the barrier to entry for users looking to save or invest cash digitally. Taku added that the P2P lending platform already has an asset under management (AUM) of Rs 110 crore currently. It also claims almost 90% of its credit repayments are made through automatic eNACH mandates and through recurring UPI transactions done manually by users. Only the rest 10% are made via other means.
RBI has recently come down heavily on digital ledgers that rely solely on partnerships with banks and other financial institutions for offering credit products. One of the aims of RBI’s guidelines for digital lending, issued on August 10 this year, is to check the unbridled engagement of third parties by regulated entities.
However, Taku pointed out that MobiKwik’s payments business is still a growth driver for the platform as it offers a bird’s eye view into a user’s transaction behaviour which can later be used to underwrite credit offerings for each user. “Payments business still continues to get us millions of users organically and we get to analyse users’ online spends, bill payment data, and other e-commerce related transactions which is a goldmine for us,” Taku said.
The company also claims to have reduced its customer acquisition costs significantly in the ongoing financial year. Taku told FE it acquired 22 million users in FY22, of which 85% were acquired organically. Yet the company faces substantial competition from existing fintech players, including Paytm, PhonePe, GooglePay, and other digital lending operators.
India’s fintech space which is mostly led by neobanks and digital lenders is now a crowded space with billions of dollars in venture capital invested into the space. According to a Boston Consulting Group report in August, India currently occupies a significant space in the global fintech landscape with a 14% share of funding. The number of fintechs in the country rose between 2014 and 2021.
Though the funding was low till 2015, the sector has received a rapid funding boost since then.
MobiKwik reported a revenue of Rs 540 crore for FY22, registering an 80% y-o-y growth over the previous financial year. In July last year, it had filed draft papers to raise up to Rs 1,900 crore through an IPO.