Fin-tech company Mobikwik is expanding its services by offering instant micro loans to wallet users running short on balance as part of its efforts to boost digital payment usage in the country.
The company, which competes with Alibaba-backed Paytm, started pilot on the project a few weeks back and has already given loans to about 25,000 users.
“These are micro loans, about Rs 500-2,500, given to users when they are running short on balance while making a purchase. We are happy with the product, the repayment rates are around 97 per cent. We are now looking at expanding this,” MobiKwik co-founder Upasana Taku told PTI.
She added that the company has partnered consumer-lending marketplace, CashCare for the service.
MobiKwik is in process of adding 10-12 other similar banks and non-banking finance companies for the service.
“Over the next few months, we expect to give out credit to 2-3 lakh users,” she said.
Asked about the process of selection, Taku said the company assesses the credit worthiness of the wallet users based on the previous transaction history.
“Based on how much money the user loads on to the wallet and his purchase history, we determine the credit worthiness. These small loans is a way of boosting the user’s confidence in using digital payments,” she said.
The company aims to drive a gross merchandise value(GMV) of $ 1 billion by financial year 2016-17.
Apart from loans, Mobikwik is also working on bringing board users that do not have cards or bank accounts.
“We are building a network of cash pick-up services in Delhi, Mumbai, Bengaluru and Jaipur. We already have 80,000 outlets where consumers can go and deposit cash on to the Mobikwik wallet,” Taku said.
She added that Mobikwik also gives users an option to request cash pick ups.
“We are already seeing about Rs 7-8 crore worth of such transactions and expect this to see a 10X growth in the near future,” she said.
Mobikwik, which has about 30 million wallet users, had recently raised $ 50 million in funding, led by Japanese payments firm Gateway and Taiwanese chip maker MediaTek. Its other investors include players like Sequoia Capital and Treeline Asia.