Personal loan platform KreditBee aims to function as a neo bank, a change from the current lending platform avatar, the company’s Co-founder and CEO Madhusudan Ekambaram said in an exclusive interview to Moneycontrol.
“Where we are heading is to really become a leading neo bank. For that, we have multiple services we are working on, one is the current personal loan business. We will also be entering the Buy Now Pay Later (BNPL) space this year, we are integrating with multiple partners for the same,” he said. The BNPL space has gained widespread traction over the past few months with multiple financial services companies vying to grow in the segment.
The company also entered the card segment through a RuPay pre-paid card in partnership with RBL Bank. With a focus on Tier-II and Tier-III cities, the card allows customers to avail credit limit up to Rs 10,000 that can be repaid within a single billing cycle not going beyond 45 days.
Ekambaram said that the company hopes to issue one million of these cards by the end of FY22. “Credit card penetration in India is only two to three percent. Meaning 97 percent of Indians don't have the same access. Democratizing credit to the masses is what we intend to do,” he said.
The company is currently providing personal loans up to Rs 2 lakh and also providing bite-sized medical insurance with coverage of Rs 10,000 to Rs 15,000. Currently, Kreditbee disburses 20,000 loans per day and issues around 5,000 medical insurances per day. Ekambaram says that these numbers can grow by over two times by the end of FY22.
“By the end of this fiscal year we should be disbursing about 40,000 loans per day and anywhere between 10,000 to 15,000 insurances per day. These numbers are not just estimates but are based on our growing geographical footprint. Increased vaccination penetration is going to help us open up in more PIN codes,” he explained.
He further added that KreditBee’s aim is to bridge the gap in access to credit and insurance and 86 percent of its customer base is from non-metro cities. Besides loan disbursal and selling insurance, the company sells credit score reports and offers its Software as a Service (SaaS) to other banks and NBFCs.
Ekambaram also has an ambitious target to grow the current customer base in the next few years, currently the company has a customer base of five million. “My aim is to grow the current number of customers having access to our credit line to 10 percent of India’s population. This may be possible in the next three to five years. So of course, we need to add multiple products because a single product cannot cater to all these people,” he said.
To fuel these plans, KreditBee will raise a fresh round of funds by the beginning of FY23, Ekambaram added. The company holds a Non-Banking Financial Company (NBFC) license from the Reserve Bank of India (RBI) and has raised cumulative funds of over $200 million after it raised $145 million in a two-tranche Series C funding round in March 2021.
The company is backed by Premji Invest, Motilal Oswal Private Equity, TPG-backed NewQuest, South Korea’s Mirae Asset Venture, and US-based Alpine Capital. Other marquee investors include ICICI Bank, Arkam Ventures and SIDBI’s investment arm IndiaSME Investments.
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