Why This Entrepreneur Has a Deep Faith in India's Consumer Lending Space
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Growing up as Delhi boy, Gaurav Chopra always wanted to be an entrepreneur. He was inspired by his mother, who runs a boutique in the capital city and his uncle, who manages a listed company.
But in India, passion comes after education. Soon after completing his higher education in the UK, Chopra joined CapitalOne and worked extensively in the credit industry. In 2013, he quit his job and moved back to his homeland with a suitcase full of dreams to be an entrepreneur.
Chopra knew being an entrepreneur in the country is not an easy task. He had to understand the current social and economic situation at the ground level. Hence, he took up a job as a co-founder at i-lend and helped the company build its infrastructure and making their product live. During this time, he also learnt there is a huge gap between the demand and supply of loans. And hence, the idea of starting IndiaLends came up to him.
Working with JioMoney as freelance consultant deepened his knowledge further in the area and also, helped him bootstrap the company. In 2015, the entrepreneur started IndiaLends, a credit underwriting and analytics platform for unsecured consumer lending, with his co-founder Mayank.
Not Just a Marketplace
Even though IndiaLends is essentially a marketplace that connects lenders and borrower, Chopra says the uniqueness of the platform comes in two parts.
“We are not a full spectrum marketplace where we are supplying everything from a mutual to insurance to home loans to car loans. Our focus is on the biggest demand-supply gap area which is a personal unsecured loan. From that standpoint, we are a monoline that is focused on this sector,” he shared with Entrepreneur India while adding that, “Secondly, we are not doing a lead generation job here. There is a lot of focus on the technology that we have built whereby the entire process of taking a loan is through our platform. There might be an NBFC or a bank lending the customer but the entire process happens at our platform as supposed to transferring our customer to a third party.”
While for some being a monoline product might seem an opportunity loss considering India’s grand financial inclusion plans, Chopra feels this distinguishing factor is their strength.
“We have a lot of insights on the customer, a lot of risk analysis is done at our side which helps us to provide a better customer experience at the cheapest possible loan interest rate while meeting their requirements,” he claimed.
Most of the fintech startups in lending space have heavily focused on the SMEs but consumer lending is yet another hot space in the country. The entrepreneur opines that instant gratification is moving to India - where individuals prefer buying their desired items by taking a loan as against saving for.
However, more the merrier proverb doesn’t work well in the consumer lending space and there are times, where IndiaLends has to decline the consumer request based on the financial repaying profile.
Explaining the scrutinizing process of the startup, Chopra says, “Apart from the credit score number, we look at the borrower's profile and see where we can fit him into our credit policy. The credit score is not just a credit score number. There is a full underlying report with it. So, two people can have a score of 750 but they could have a different financial background behind it.”
Furthermore, even though IndiaLends has tied with almost 50 financial institutions including banks, NBFC and new-age lenders, the marketplace has shied away from P2P lenders as the Chopra believes the present regulation is not enough for the lending model to scale up and cater to the masses.