In an exclusive interview with BW Disrupt, Mr. Ashwin Bhambri, CEO of PhoneParLoan, talks about the founding of the company, its competitors, the state of funding and more.
Founded in 2018, headquartered in Delhi, PhonePar has a presence in Tier 2, 3 and 4 cities. The platform has served over a million customers and aims to create a premier reminder loan BRAND. order for Bharat and will be India’s largest lending platform by 2022.
1.Describe your business model to us, e.g. how did the idea come about and how does it work (step by step procedure)?
Serving end customers in India and Bharat, PhoneParLoan is a mobile credit platform that provides loans to “New on Credit” (NTC) customers. It provides “quick loans” and “two wheeler loans” worth up to Rs. 5 lakhs for 48 months or less.
PhoneParLoan has now simplified the lending business for both lenders and their end customers. It did so using its state of the art approach, which is both user-friendly and transparent. PhoneParLoan offers all types of consumer loans including micro loans, personal loans, car loans, home loans, white loans (for TV, fridge, laptops, etc.) Delivery bikes, And so on.
The loan process involves a quick in-app loan request, KYC submission, instant approval, and easy repayments.
2.What are the unique key points of your business?
Today there is a major void in the credit assessment process, something that adds to the woes of first-time borrowers in India. Their limited financial data prevents them from using credit services. It is the central pain point that we resolve. We enable thin-file credit applicants to seamlessly enjoy credit services through our partner lenders. PhoneParLoan relies on advanced technologies and alternative data repositories. The approach analyzes the creditworthiness of loan applicants with precision, even if they are small clients from cities of Level II and Level III or above. The effectiveness of the platform can be measured by the fact that we have a 96% success rate for employees who complete their KYC process.
3. How are you different from existing competitors?
For starters, India’s retail credit deficit is too huge to be solved by a single entity. At PhoneParLoan, we believe in healthy competition. This not only paves the way for targeted innovations, but also ensures that customers get their money’s worth.
Yet there are several differentiators that set us apart from our closest competitors. The most important of these is our comprehensive approach to serving end customers in India. We’ve covered almost every personal loan use case that an individual can offer. Our user-friendly, technology-driven operations are just some of the reasons we have over a million happy customers.
4. What is the funding status and monetization model?
I started this company in January 2019 with the support of my longtime friend Mr. Anand Kumar who is also the founder and CEO of Pier Counsel. It operates as a silent partner in the business. PhoneParLoan has received pre-seed funding to establish the business.
We have a commission-based model in which we connect creditworthy applicants to our lending partners. Our lending partners pay us a small fee for each approved request.
5.How did PhoneParLoan overcome obstacles in running the business?
Phoneparloan became profitable in its first year of operation. In 2020, due to foreclosure, the entire segment was affected by the decline of many lenders. However, PhoneParLoan decided to expand the business using alternative routes. We have maintained a lean team with extreme focus on the mobile apps front and its constant development. We have also introduced additional services such as insurance to help our customers cope with the COVID period. Innovation has been our cornerstone for horizontal business expansion.
6. What are your next projects?
We offer loans in various categories. Our current service portfolio includes auto loans, home loans, personal loans, student loans, and more. Now, we will soon introduce new loan products for our consumers.
7.How do you see the expansion?
With the aspiration to support the unserved or underserved people in rural areas, we plan to expand more services through our app in addition to money lending.
8.What have been the biggest learnings so far?
The whole trip with PhoneParLoan has been a great learning experience. He taught us how to face unique business challenges and intuitively assess new user requirements. I think delivering solutions in the simplest format always helps fintech companies, especially those targeting non-urban areas. This is because most of our non-urban population is not very tech savvy.
9.What is the market size and opportunity?
The global fintech market reached a value of nearly $ 111.24 billion in 2019, growing at a compound annual growth rate (CAGR) of 7.9% since 2015. It is now expected to grow at a CAGR of 9.2% to reach about $ 158 billion by 2023. This figure is further expected to reach $ 191.84 billion by 2025 and $ 325.3 billion by 2030, with respective CAGRs of 10 , 2% and 11.1% respectively.