Mortgage-Tech Startup Easy Partners With ESAF To Drive MaaS Adoption

Kerala-based ESAF Small Finance Bank and Mumbai-based mortgage tech startup Easy have entered into a strategic partnership to provide digital-first affordable home loans to home buyers. 

Founded in 2018 by Rohit Chokhani, Easy offers mortgages to underserved customers via mobile. The startup operates across the country in a phygital model and claims to offer instant decisions on home loans. The startup is registered under the National Housing Bank and recently raised $15 Mn in its Series A round led by Xponentia Capital Partners. 

The partnership aims to provide loans to consumers within industry-leading turnaround time. The bank will use Easy’s technology to strengthen its offering of secured lending in overlapping territories operated by both the institutions. ESAF has almost 4.7 Mn customers across 550 branches in the country.

From Mortgage-As-A-Service To Building A Neo-Mortgage Bank

Easy claims that this is the first Mortgage-as-a-Service (MaaS) deal in India and is the first step to Easy’s long term goals of a neo-mortgage bank. Easy’s proprietary in-house artificial intelligence (AI) enabled technology will be utilised to ensure ESAF Small Finance Bank’s operational costs remain low and maximum market coverage through the phygital model, it claims. The startup is also in talks with another leading Indian bank for a similar MaaS partnership, said Chokhani speaking to Inc42.

“While lenders provide the financial product, we underwrite and acquire these customers for a long term, as is the case for mortgage customers,” said Chokhani.

As a neo-mortgage bank, Easy aims to provide mortgage-based credit products to customers which will be co-branded with banking partners. Chokhani stated that it is possible for such credit products to be provided at lower interest rates and better EMI terms than what is currently available in the market. The basic idea is to build a suite of B2C fintech credit offerings on top of loan against property.

“India is still at a very nascent stage when it comes to digitalisation in the mortgage space. Mortgages amount to only 10% of India’s GDP and there is a long process of underwriting a home loan. With this association, we aim to make the entire process smooth for the end consumers and are confident that they will have a great experience and faster access to capital in fulfilling their dream of owning a house,” said, Praveen Agrawal, CEO, Easy.

Talking about the recent funding announcement, Chokhani stated that the company is well-placed to grow for another 2-3 years with the current funding. It will be utilising the fresh capital to achieve $150 Mn assets under management in the next 24 months. The company also wants to expand its network to more than 100 locations across the country.

The startup is also working on some new credit products that its mortgage customers can avail, said Chokhani.

 “We are glad to partner with Easy to offer proprietary in-house AI enabled technology to our customers and facilitate them with the ease of digital services. We believe that this partnership can bridge the financial inclusion gaps that are left to be addressed, through better and faster home loans,” said Paul Thomas, managing director, CEO of ESAF Small Finance Bank.

Mortgage-tech has been an emerging segment globally with several unicorns such as Blend and Better. In terms of India, firms such as Steadview, Sequoia Capital, LGT Lightstone and Blackstone have already invested in companies present in the real estate sector. 

For instance, Steadview, Sequoia Capital, and WestBridge have already invested in IPO-bound Aptus Value Housing Finance. LGT Lightstone has invested heavily in a Gurugram-based affordable housing financier – Umeed Housing Finance. In 2019, investment firm Blackstone had acquired a majority stake in Aadhar Housing.