'Our Advisory Service Is For The masses, Who Depend Heavily On Credit'

Tell us a bit about your recently launched Credit Advisory Service. Is this going to be a free or paid service for your customers?
The credit advisory service is the next step in our endeavor to make India more credit aware. We already run India's biggest credit awareness initiative, by providing consumers their free credit report every month for life. While we have been enabling consumers to know their credit score via our platform at zero cost, there is still lack of awareness around what determines this credit score and how can one improve it. The credit advisory service addresses this need gap.
 
It involves our team of credit experts explaining a consumer his credit report, reasons behind his low score and the steps required to improve it - All this in an extremely easy to understand language, without the usual jargons that often confuses consumers. We will also provide full assistance in rectifying errors in the report and closing outstanding loans.
 
While the credit report feature is absolutely free for life for consumers, we are charging nominal fee for the advisory service, as our team of credit experts would need to deep-dive and analyze each customer's credit report and offer tailor-made solutions.
 
Is your Credit Advisory service going to be an automated DIY process, or one that involves a high degree of engagement with and counselling from an Advisor?
Currently, it's an one-on-interaction based counselling, in which we address all concerns a consumer with a low credit score have, along with providing him with an action plan that will help him in building a strong credit score. In the time to come, we may evaluate digitising a certain part of this service.

Who do you view as your biggest competitors in the Credit Advisory space? Do you think there's potential volume in this space, or do you view it as a more niche service?
Our biggest competition here is inertia. While a consumer today has various options to get access to his credit report, no one is educating him on the reasons behind a low score and how to improve it over time. Over 26% of consumers, who have taken their free credit report from Paisabazaar.com, have a 'low' to 'very low' score, which is a big roadblock in purchasing a lending product like any kind of loan or credit card. With access to credit easing and more people getting on the bureau, awareness around credit score will gain even more relevance.
 
In a market as big as India, I don't think there will be dearth of volume. Our advisory service is for the masses, who depend heavily on credit to meet life goals like buying a house or taking care of their child's higher education. The service will help them build a healthy score, which in turn will not only increase their access to credit, but also help them buy these products at a lower cost.
 
With AI based models opening up unsecured retail lending in a big way, do you foresee the potential risk of a credit bubble forming here, if things keep moving ahead unchecked?
Unsecured lending is all about credit assessment. Most banks and NBFCs have robust underwriting models. AI is just helping them automate this process and make decisioning a lot faster. So, AI may not necessarily be correlated with any credit bubble. What will matter is how judicious lenders become with their model in the future. While innovating to make credit more accessible is a move in the right direction, we need to ensure there are no adverse long term repercussions.
 
What was the rationale behind launching this service at this time? Do you see this as a natural extension of your value chain - as in, do you see customers who avail this service eventually going on to buy products from Paisabazaar?
The credit advisory service is a natural progression in our credit awareness initiative. As a business, we know we'll grow only when we are able to help consumers coming on our platform avail the product they were looking in the most seamless and convenient manner possible.