Indian financial institutions have been witnessing a massive transformation over the past year. From an increasing focus on online banking, bad debt provisioning, the cash crunch post demonetisation and the spike in mobile transactions. Triggered by the e-commerce and smartphone growth, the traditionally cash driven Indian economy, now has lowered inhibitions towards the fintech opportunity. Customers now have a myriad of options at competitive rates and need not rely on banks alone to take care of their financial needs.
One particular financial need affecting individuals and the SME segment is loans. It is a complicated product and has various parameters to it, from the financial institution's willingness for risk, customer’s eligibility and requirement. Different banks have different products and varying risk appetites Though a customer could use online aggregators to view the various options, there was a lack of an all-encompassing end to end solution for the customer. After working with HDFC, Reliance Capital and Yes bank, Manavjeet Singh saw a clear disconnect between lenders and borrowers and sensed an opportunity.
Founded in 2014, Rubique is an online marketplace for loans, credit cards, and insurance. Till date, the company has disbursed more than Rs 1250+ crores in loans, issued 31,000+ credit cards and has a tie up with more than 65+ financial institutions in the country. The company also raised Series A funding in 2015 led by Kalaari Capital. Like many other fintech players, demonetisation proved to be a boon for Rubique, as reports state that the company saw a huge spike in loan disbursements to the tune of Rs 150+ crores in the immediate aftermath.
Singh believes that demonetisation pushed a lot of fence sitters who earlier did not buy into the idea of online loan disbursements to sit up and take notice. He says, “As a company, we have seen a lot of changes post-demonetisation, as we deal with loans and financial services. A whole lot of financial institutions didn't really believe it was possible online. Post 8th November, a whole lot of them have reached out. In the entire ecosystem, from the customer to the financial institution and channel partners, everybody today is convinced that the future is digital.”
What differentiates Rubique is that they are a blend of online and offline. Approving a loan online by itself means nothing as the customer has to finally sign an agreement. Many customers need to be appraised of the KYC process and the relevant documents required. Once the application is underway, the customer’s credit score is analysed after which they are matched with the right financial institutions. Rubique has its own proprietary matchmaking algorithm which is directly integrated with financial institutions’ systems to ensure a seamless process both for the lender and borrower. With technology at the core of Rubique’s vision, it is the newly launched Rubique Advantage feature that is making the entire loan application procedure faster, easier and paperless with eKYC, PAN validation, checking credit bureau score in real time and real time processing & online in-principal approval by direct integration with financial institutions’ systems.
While individual’s borrowing needs can be satisfied with online options, Singh believes that the story is a tad bit different for an entrepreneur. In his experience, many entrepreneurs do not go online looking for loans. According to him the biggest problem for them is that they are not aware of the different options available or where they can avail a loan from as they vary depending on the business and the size of the loan. Many are also unaware about the different documentation required for the loan proposal.
This is where Rubique steps in to provide an end to end solution with technology. Rubique disburses loans from amounts as small as Rs 10,000 to Rs 10 crores which depending on the size will typically take around 45-60 days to get the final approval. For an entrepreneur, this is a long wait and generally, entails multiple follow-ups with the financial institution. Singh says, “I personally feel, the biggest advantage is the Rubique tab. Customers are aware of the current status of their application, whether it's approved, declined or whether additional information is required. This helps save 10-15 days for the customer and we're trying to crunch this number further down.
While with the Startup India initiative, the government has laid out a framework to encourage entrepreneurship, eliminate red tape and most importantly promote bank financing to potential startups. For any aspiring entrepreneur, funding and fundraising are pain points. So this beckons the question; what role can Rubique and the fintech industry at large play in aiding entrepreneurship. For Singh, the industry has barely scratched the surface. Talking about loans he says, “This is a $500 billion market growing at a CAGR of 20%. But when you look at retail or SME (segment) not even 2% is done digitally. I believe that fintech is going to have a collaborative approach with the financial institutions and is definitely going to help the customer. It is going to change the industry in a big way.”
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