MoneyTap Resolves Need For Borrowing Money: Kunal Verma, Co-Founder
With the growing complexities of taking loans and borrowing money in India, Kunal Verma, Co-founder, MoneyTap explains how the latest technology and the first credit line application of the country is resolving the problems and helping many working class individuals borrowing money and returning it with a loan plan of their choice.
He explains about the product in an exclusive interview with BW BusinessWorld. Edited excerpts:
How did MoneyTap form and how does it ease the problem of borrowing money?
MoneyTap is India’s first application based credit line. It is a new financial product which is available to the middle class Indians which solves the problem of borrowing. Before starting MoneyTap we went out and spoke to over a thousand middle class employees across Indian cities and spoke to them about their borrowing needs and we figured out that a large segment of the people were not having what they really wanted. Either people had daily expense related needs or they would opt for loans from banks.
But the loans come in sizes of 5 lakh to 10 lakh and some people have credit cards but credit cards are an efficient way of payment but you can’t borrow money through credit cards and interest rates are high ranging to 40 per cent. Hence the core need of money borrowing was not available in the economic system of the country hence we went about creating a product in partnership with some of our banking partners such that people had the flexibility of borrowing money in a small or large amount, they could choose their EMI plans depending on their comfort level and their cash flows and the entire procedure could be accessible through a smartphone.
The company started back in 2015 where we spent 8-10 months in building up the product and launched the product in the September of 2016 in the Indian market where we started out in Bengaluru and have covered 14 cities in the country so far. Under three months there were about 1,00,000 downloads for the application.
What are the current consumer lending startups and how well are they performing with as compared to MoneyTap?
Fintech right now is known as the hottest sectors right now. Financial technology is only growing because of digitization and the government has been promoting this sector to empower more people of the country to adapt to cashless economy. There are a lot of companies that are trying to solve money lending issues in different ways, there are companies that create various payment methods and money transaction applications and other miscellaneous market place companies.
Hence broadly this space of fintech has companies that are based on 2 to 3 parameters such as; money lenders which is a peer to business, market places that serve as lead generators for banks and companies that work with banking partners and that is where we come in. Therefore we operate in a unique space where nobody has created something as different as we have in the market that involves an application based credit line. MoneyTap does not compete with banks and instead works with banks in lending money enabling the expansion for scale along with a profitable business model.
What kind of customers does MoneyTap seek?
We started out initially with salaried individuals with regular pay rolls and right now we are seeking monthly salaries from Rs 20,000 per month. The individuals should also be belonging to the cities our application is functional in and we are also adding more cities and expanding as we analyze more and more customers who demand a product like ours.
Most important is that all the customers we approve of should have a PAN number as well. Later we will reach out to people who earn less than Rs 20,000 a month as well so as to operate in rural areas and reach out to a larger audience of the country.
How does MoneyTap monetize its products being known as a credit line?
MoneyTap has strong business fundamentals and clearly money lending requires attention to detail. The way we make money is through a revenue share with our banking partners, every time a customer gets approved for MoneyTap for having access to a credit line for a lifetime there is a small fees of Rs 500 is charged. Once the customer spends some money over a period of 1 year, the money is recovered. In addition to that the usual interest that the customer pays and some normal processing fees that is charged every time a person borrows also increases profitability for the application.
Therefore we are designed to be a product company which is running on the backbone of data science, technology and product thinking. We are also finding solutions in a low cost tech friendly way which also enables us to profitability.
Will MoneyTap be partnering with multiple banks?
We would be working with multiple banks in the future, we announced our partnership with RBL Bank first but since then we have gone ahead and done integration and we are into the testing phases with other banks to seek partnership. We will make some formal announcements very soon with respect to our partnership with more banks. The idea here is to work with a handful of banks as possible that allow us at scale a pan India and where we don’t need to work with different banks to uplift this process. We can work with banks and non-banking financial companies as well.
What was the feedback MoneyTap received on launching the application?
People initially had a lot of questions because the application is a new brand in the market and we are not really a market place where you can visit our site and see listings of 20 different products. We offer a financial product and the curiosity people shared was about which bank are we associated with them, who lends the actual money and can I trust the application with my personal information.
The curiosity started to go away when we started becoming more transparent about our application and the whole process. The efforts we put in through design and technology in creating the application ensured that people had an unparalleled experience. The entire MoneyTap rounds up using a chat base platform where we file multiple patents as far as the technology aspect is concerned. In addition to this we have also been tied up with RBL Bank which is our banking partner and they have been supportive because they are contented with the work we have done over the last couple of years.
What are the expansion plans for MoneyTap in the following year?
We intend to expand both geographically and from a customer segment stand point. We are present in about 14 cities where our banking partners have contributed in extending the reach. They are also helping in working KYC formalities and in loan collection because the collection is undertaken by banks.
We hope that in the next six months we would reach out to 20-30 Indian cities and maybe by the next 12 months and from a customer stand point we would widen the salary base and accept customers with salaries lower than Rs 20,000 a month. We aim at developing the Unified Payment Interface and uplift paperless documents and develop MoneyTap in cashless transactions as well.
What updates can the users look forward to regarding the application?
Sometimes the users are not satisfied with the process by which they are charged tax upon a loan they borrow, they then have doubts in understanding the functionality of the application. Of course MoneyTap is an easy to understand and easy to function money lending application but it’s interface can get complex for many users, hence we are coming out with a transparency features.
We are also focusing on enabling UPI in the application which would empower customers to borrow and pay money through these gateways. MoneyTap other than that is a superior financial product which will also develop user interface in the coming months and the application will encourage other banks to speed up in partnering and developing unique financial products.
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