Technology has touched nearly every aspect of commerce and transaction these days. It’s no different when it comes to borrowing and loans. With Non-Banking Financial Companies (NBFCs) coming to the fore and offering loan products to underserved audiences, the lending market in India has taken a whole different shape in the past 2-3 years. Fintech startup MobiKwik was one of the first digital payments companies to emerge in India, and has also branched out into lending after beginning life as a digital wallet service. The company recently announced an ambitious target of clocking 70,000 fully-digital loans in May, after disbursing 55,000 loans in April 2019.
According to MobiKwik, about 1 Mn users apply for a digital loan on its platform every month. These loans are made available to MobiKwik users in partnership with leading NBFCs. Since the launch of its lending service in 2018, the company claims to have disbursed over 5 lakh loans and is growing at 25% month on month.
Founded in 2009 by Bipin Preet Singh and Upasana Taku, MobiKwik has raised four rounds of funding from investors including Sequoia Capital, American Express, and Net1 of close to $120 Mn. The company offers, booking and payments, lending, wealth management, and insurance services, and its user base comprises over 107 Mn users, 3 million merchants, and 200+ billers.
Speaking on the growth of the credit business, Upasana Taku, cofounder and chief operating officer, MobiKwik, said, “We started out with the objective of providing affordable and accessible financial services to billions of Indians. Over the last one year, our loan products have been well received by customers across tier 1, 2 and 3 towns and cities. With our simple products, easy user journeys and robust payments ecosystem, we have made it possible for lakhs of Indians to get access to digital credit in their mobile app in 90 seconds.”
MobiKwikoffers an extensive portfolio of lending products, which cater to various use-cases and audiences.
Boost: MobiKwik’s personal loan product that offers instant loan disbursal to users and do not require any security. These digitally-processed loans make it possible for users to get the amount in their mobile wallet in just 90 seconds. MobiKwik disburses instant loan amounts as low as INR 1000 going up to INR 100K.
MobiKwik Money Solutions: Under this B2B2C model, MobiKwik empowers small and medium merchants to instantly furnish digital loans to walk-in customers in their stores. This approach allows MobiKwik to extend the distribution network of its ‘Boost offering to customers, who have not signed up with MobiKwik directly.
MobiScore: Over the years, MobiKwik has amassed data on user transactions, payment Using this data,MobiKwik has created a proprietary credit score platform called MobiScore, which is used to finalise loan eligibility for applicants. The loan amount is payable through equated monthly instalments and the customers can either repay through the MobiKwik app or can choose to let MobiKwik’s NBFC partner auto-debit due amount from their bank account every month.
Digital Lending: The Road Ahead
India witnessed a true fintech wave after the demonetisation drive in 2016. Over the next five years digital lending in India is set to become a $1 Tn market. The total funding in digital lending startups between 2014-2018 has been $1.58 Bn across 138 deals, according to Inc42 DataLabs. This growth is spurred on by the increasing penetration of lending services to rural users in India.
With the lending landscape featuring a long list of players including the likes of Lending Kart, Razorpay, Instamojo, PayU India, Rubique, Loan Tap and others in addition to MobiKwik, the segment is expected to witness huge growth in the coming years, especially with the greater digital and financial inclusion across India’s rural and urban audiences.