The dominant narrative around India’s Fintech sector has mostly revolved around payment and mobile wallets, with today many B2C and B2B players competing in these categories having already achieved brand status. However, amid the entire deafening chorus around payment and mobile wallets, digital credit startups like LoanTap are enacting an unlikely success story that is steadily catching investors’ fancy. LoanTap itself is a big beneficiary of investors growing affiliation towards personal credit space, after it recently raised $12 Mn in a series B round.
LoanTap offers wide-range of personal loans catering to lifestyle needs and demands of its consumers. From home & two wheeler loans to wedding and holiday/vacation loans. It also offers other unique credit products like advanced salary loans, rental deposit loans, EMI free loans and credit card takeover loans. The company claims that these products have found significant traction among urban consumers and now it is setting eyes on Tier 2 cities. The decision to shift its focus on smaller towns is obviously propelled by its desire to increase loan book and boost its top line growth.
To know more about these and prospective challenges and future plans, Techpluto caught up with Mr. Satyam Kumar, co –founder & CEO of LoanTap – in an exclusive interview.
Q) There is no doubt that India is currently going through a Fintech revolution and this has only led to intense competition in the space. What makes LoanTap stand out in this highly competitive environment?
LoanTap was founded in 2016 with absolute focus on customer needs, and has changed the retail asset distribution model by eliminating the information gap between lender and consumer. LoanTap brings to customer transparency of solutions and helps them choose the best suitable product depending upon the customer’s need. Most of our customers appreciate our transparent processes and how we have been able to reduce their EMIs up to 40% by offering unique solutions like EMI Free Loan, Personal Overdraft as well as by helping them understand power of building better credit score by consolidating their debt through Credit Card Takeover Loan. A combination of convenience, pocket-friendly loans and low Turn Around Time (TAT) helps us stay differentiated.
Q) LoanTap recently raised $12 Mn in a series B round. Can you please enlighten how does the company plans to use the latest capital infusion?
The funding that we received will be utilized to uplift the retail segment loan and expand our loan-book. We are eyeing 3x growth for current financial year
Q) Interestingly, LoanTap has managed to raise funds when the NBFC industry is facing huge liquidity problem. What is your opinion about the ongoing liquidity crisis that is currently plaguing the industry?
The liquidity crisis is cyclic in nature. We have seen the industry go through the turmoil every 5-6 years and at the end, we recuperate with consolidation. It is important that we stay sharp towards credit profiling, keep NPA under control and at the same time do not loose customer centricity.
Q) Going forward, which key factors will prove to be growth drivers for LoanTap?
There are many factors – internal as well as external that contribute towards driving our growth. Internal factors like – seamless digitalization and customization of loan products to meet customers’ needs and being able to deliver complex product like Personal Loan in seamless manner to internet savvy customers who believe in instant gratification.
External factors are – millennial working population who are driving Indian economy. They comprise more than 40% of Indian population. They are internet savvy and have different lifestyle as compared to their previous generation. Hence, with internet penetration, and changing lifestyle, we see much higher potential in the segment as a whole.
Q) But the challenge of expanding your loan book and still remaining profitable won’t be an easy task. How do you plan to cope and overcome this challenge?
LoanTap has become profitable within first five quarters of its operation. We use technologies at all facets to keep our sourcing, delivering as well as retrieving costs under control.
Q) Where does LoanTap currently stands in terms of profitability and revenue. Can you please share some stats and figures with regard to the same?
LoanTap is one of those FinTech that has become profitable within first five quarter of operations. We have grown 4x since inception and aim to grow 3x this financial year
Q) Your future predictions about LoanTap. Where do you see LoanTap in 2-3 years from now in terms of overall growth?
LoanTap has started venturing into tier 2 cities as we see demand for retail loans coming from there as well. With usage of technology, we are now looking at even faster and more customized loan solutions to the end users. Consumers are adopting faster than what companies can actually innovate and therefore, continually listening to customers and delighting them is what we aim at.
Q) Do you think that LoanTap and all other Fintech companies should be really concerned about all the talks about economic slowdown?
No. The slowdown is temporary and we have just seen how the festive season brought the zing back to the market flavor.
Q) Your thoughts about how should NBFC companies should go about in keeping their NPAs under control?
It is making right credit decision at the first step. A robust credit profiling by not only checking ability to pay but also intention to pay with technology orientation helped us keep our NPAs below 0.5%. So, the FinTech is not about marrying finance to technology but more about deploying technology to financial sector so as to achieve the best of both worlds.
Q) Lastly, any piece of advice that you would like to give to all the budding as well as professional entrepreneurs out there?
One should look at few basic measures like, one must build business for long term need. No short-term need gaps but a long-term solution for every changing environment and the fast adopting customers. One should be ready for market fluctuations. A clear roadmap of at least 5-7 years is important for entrepreneur to follow. This must be based on value-creation and sustainable growth, – not for immediate gains. Evolving with customers also remains one of the main aims of business. The core or any business is never about what one can do, but how fast we can adopt to what customer wants us to do.
And extremely important, one should aim to become cash-positive or profitable as early as possible.