At a time when the fintech lending sector is facing stress due to the COVID-19 pandemic, EarlySalary is in the growth phase and planning to expand its loan book during the festive season
Pune-based lending platform EarlySalary is doubling down on issuing fresh loans and targeting strong growth as the country prepares for the festive season amid the COVID-19 pandemic.
The company, which was going at a run rate of disbursing credit worth around Rs 140 crore per month before the pandemic, has now reached the monthly run rate of loans worth Rs 80 crore.
Further, 80 percent of its borrowers did not halt their loan repayments during the pandemic.
“Our extreme focus on good quality customers within the salaried segment has ensured that we did not suffer much due to the moratorium and the pandemic, our collections have come back on track,” said Akshay Mehrotra, cofounder, EarlySalary, during a conversation with Moneycontrol on October 14.
Mehrotra did point out many fintechs will have five times worse asset quality than banks after the pandemic, mainly because of their exposure to risky credit segments like students and blue-collar workers, among others.
The startup also launched a new digital card in partnership with RuPay to enable a new form factor of payments for its customers who can apply for the card through its mobile app.
The digital card will have flexible credit lines for different forms of purchases across categories like shopping, education, consumer durables and others.
“Consumers can also adjust their loan tenure through the app and make the purchase,” Mehrotra added.
EarlySalary has set a target to grow their balance sheet by five times over the next one year and is hoping to get 25 percent of the loans from the consumer and personal loan segment. Since these will be longer tenure loans, the book will grow faster on the back of these credit lines.
Buoyed by its efficiency of collections and strong asset quality even during the pandemic, EarlySalary has pushed out its check out finance business, card business, and the edtech credit product over the last few months, when the lending sector hunkered down.
“We had gone down to doing around 20,000 loans during April to May, which has now come back to 35,000 and by January 2021 we are looking to get back to 75,000 loans per month which was our pre COVID number,” he said.
Mehrotra believes the country will bounce back from the economic downturn, consumption will come back during the festive season, and EarlySalary will be able to leverage that opportunity and get good customers going forward.“Our scorecards have been really helpful, we have a dedicated 20-member team working in machine learning, these investments have helped us,” he said.