How this Fintech startup is pivoted to full-stack digital lending platform for New to Credit (NTC) and young professionals to avail loans online.
16th, November 2020 - FinTech
SJ: Please tell us about yourself, family, and education (all co-founders details)
KB: At KreditBee, we are a very tight-knit team. We have all worked together at some point in our past careers and have known each other from the previous organizations. It is very important to trust and respect your peers when you work together, especially in a start-up setting, which requires the team to have a good understanding to build the company from the ground up and see through rough times. We share that rapport of trust within and outside work.
Madhusudan Ekambaram, Co-Founder & CEO
o BE in Information Technology from NITK Surathkal
o 16+ years of experience in Product Portfolio Management prior
o Winner of the coveted Rasthrapathi Puraskar (President’s Award) & Rajya Puraskar (Governor’s Award)
Karthikeyan Krishnaswamy, Co-Founder & CTO
o Bachelors of Computing (Honors) in Computer Science from National University of Singapore
o Masters of Computing in Computer Science from National University of Singapore
o 12+ years of experience in Technology & Products
Vivek Veda, Co-Founder & CFO
o CA from ICFAI
o 14+ years of experience in Investment & Retail Banking
o Director of KrazyBee Services Private Limited, a Systemically Important NBFC with a Loan Book of over INR 1000 Crore
Other core members are:
Ajeet Kumar, COO
o BTech in Mechanical Engineering from Indian Institute of Technology, Delhi
o PGDM (MBA) from Indian Institute of Management, Bangalore
o 15+ years of experience, primarily focused on consulting & building businesses
Sidharth Vishwanathan, Founding Team Member & CRO
o BE in Information Technology from NITK Surathkal
o PGSEM (MBA) from Indian Institute of Management, Bangalore
o 12+ years of experience in Data Analytics, Management Consulting & Business Development
Ishan Bose, Founding Team Member & CMO
o BE in Computer Engineering from Delhi College of Engineering (currently Delhi Technological University)
o PDGM (MBA) from Indian Institute of Management, Indore
o Awarded Young Marketer of the Year 2018 by World Marketing Congress, powered by CMO Asia
o TEDx Speaker
Rachit Agarwal, Founding Team Member & CPO
o BTech in Computer Engineering from Manipal Institute of Technology
o 5+ years of experience in App Development & Product before starting up
SJ: Can you tell us how the KreditBee idea conceptualized?
KB: Being in the personal finance space for about five years before starting up and having followed this industry diligently over the last couple of decades made me realise that an average consumer has to face a lot of difficulties while applying for personal loans. It not only takes a lot of time, effort but a lot of paperwork is involved. Even then, there are delayed decisions and no warranty that the loan will get sanctioned or disbursed.
Besides, there is no facility at all for quick loan requests in places where the banking system is yet to penetrate enough and past the banks’ working hours. The major challenge to break-through this need gap was to recognize a tech platform that could digitally underwrite customers based on data points that can be derived from the users via their smartphones.
So, we started with KrazyBee. It was a lending platform for college students. Within six months, we became market leaders. However, the challenge in expanding was because of the physical nature of KYC that was involved as there is no consolidated database of college students. Hence, it could never become a complete digital lending platform in the current ecology. Hence, we concentrated on building a full-stack digital lending platform, which led to the inception of KreditBee, a platform for New to Credit (NTC) and young professionals to avail loans online.
SJ: How KreditBee is adding value to the customer and what is the differentiating factor?
KB: KreditBee has a very strong underwriting system that involves different traits of the customer, comprising but not restricted to their personal profiles, social media thumbprints, spending habits, etc. This helps in eradicating the prospective fraud customers at the beginning itself. Our USP is our business model which is based on standard digital lending, wherein the interest income from the users serves as a profitability metric in the Unit Economics sheet.
Our decision-making scorecards are based not only on ordinary regression models but also on ML neural net models. We also use decision trees to regulate the strategies. With more usage of AI and ML and inculcation of more data sources, our system will become better in segregating the good customers from the bad in the long run. Even the collections practices in KreditBee boast of using robotics, automation, and many other techniques besides calling agents that immensely expands the reach of the customers and offer various measures for collections.
We are an instant personal loan platform for self-employed and salaried professionals, where they can apply for a personal loan starting from INR 1,000 up to INR 2 Lakhs as per their requirement with no paperwork or bank visits. We are a complete digital lending platform, with the comprehensive life cycle of the loan - from origination to application to disbursement and repayment being entirely online. This is the major differentiator which makes us unique.
SJ: Being in the Fintech segment, how do you see the present market and future scope
KB: Every facet of BFSI, especially the fintech segment, from customer onboarding to the collection has been witnessing a significant change from the past six months. Within this context, fintech in the country are improvising in sync with the various developments that are occurring on the socio-economic front and trying to meet the demand of the ever-evolving need-gaps. The innovation-focused fintech players are dedicated to solving all the holdups constraining a smooth positive conversion within the country’s financial ecosystem. I believe, this progressive outlook will unlock a safer, more accessible and inclusive fintech ecosystem in the near future.
SJ: How do you manage the value chain of your business?
KB: At KreditBee, from digital disruption to innovation, we are constantly working towards being different in a market that never ceases. We are trying to be the differentiators who leverage technology to build scalable, personalized digital financial solutions to provide cost-effective value to our customers without the need for face-to-face relationships.
Our 100% digital lending platform is an entry-level loan product that has a very competitive interest rate and one of the lowest in the market for the customers to whom we are serving. And, we want to keep it very easy for the customers to avail of our offerings. Since most of our customers often get back to us again, the lifetime value of the customers is very high.
SJ : What are the initial challenges you faced and how did you overcome?
KB: We constantly had to evolve our digital underwriting mechanism to help customers avail easy loans on our platform while helping the NTC and self-employed customers with loans. We still keep trying to constantly identify parameters which are a good indicator of not just the repayment competency, but also their intent. Currently, we have over 6500 data variables identified from over 120 data sources based on which we take our credit decisions.
Due to the pandemic, the biggest challenge right now is to reassess the credit scoring mechanism of customers pertaining to the new normal. It also means ascertaining the intent of the consumers considering the changing dynamics where the demand for loans is now driven by needs rather than wants.
SJ: How do you see the future for the Startup ecosystem in India in the Fintech segment?
KB: Given the COVID-19 environment, there are a lot of queries and uncertainty about the fintech startup ecosystem. However, I feel that if a startup can navigate these times, where everything about their business model is being tested, the future can be promising. The next step should be building amenities for the niche segment with a strong Software as a Service (SaaS) platform as the current fintech startups are looking at hurtling their digitization drive.
SJ: What is the advice you have heard or you want to share with it with our readers?
KB: What I have learned in my journey as an entrepreneur is how to identify the right treadles for the business growth at key moments, viable team building, concentrating on a few key metrics rather than adulterating it by trying too many things at once, and most notably, recognizing the real value for which the user is willing to pay a premium. The fact is that you never lose as an entrepreneur. You either win or you get to learn from each experience. The mantra is to keep at it.
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