Karthik Prabhakar, Director, IDG Ventures India Advisors said, “We believe fintech firms are changing the way India will bank and EarlySalary’s capability of using social media-based underwriting decisions will help many young, working professionals get access to credit which is otherwise not possible. This, over a period of time, will create a wealth of information on credit-worthy customers, to offer more diverse products through partners.”
Related Article: Fintech Startup EarlySalary Raises $15.7 Mn Series B Funding
The startup will use the funds to leverage on capital deployed for building products and lending book, expanding the team. The company is also aiming to grow its customer base and providing 200K loans in this year.
As per an official statement, more than 80% of its customer base are in their first career roles and are first-time borrowers. Over the past year, the company has developed its ‘Underwriting System’ which is a self-learning, algorithm-based decision making system. The system reviews social media in real-time as well as Credit Bureau data of customers and helps approve the loan.
EarlySalary provides a short-term, small amount loan to a salaried individual on a mobile app. These loans are similar to salary/cash advances or credit card cash withdrawal. Users can get a loan approval within minutes and instantly get money transferred to their account. The credit scoring is done coupled with social profiling which gives a better risk assessment and helps go beyond financial underwriting and IndiaStack.
As per an official statement, the company has distributed 15,000+ loans to customers borrowing between INR 8,000 to INR 1 Lakh. The money is lent at a cost as low as INR 9 per INR 10,000, per day. The company also partners with corporates as well as SMEs across the country to give salary advances to employees.
In February 2017, Bengaluru-based online lending platform Capital Float raised about $2.5 Mn (INR 17 Cr) from IFMR Capital Finance and its alternative investment fund. Other players in this segment include Lendingkart, FlexiLoans, KredX, etc.