Startup Dunya Interview Series: KreditBee

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KreditBee logo
KreditBee logo Courtesy: KreditBee

Looking for quick, convenient, and hassle-free Personal Loans? KreditBee is a personal loan platform offering flexi-personal loans, personal loans for salaried, and online purchase loans to young professionals. Startup Dunya Interview Series – in Conversation with Madhusudan Ekambaram, Co-Founder and CEO.

FOUNDER’S JOURNEY

When did you form the company? We initially started as KrazyBee in 2016, which was essentially a lending platform for college students. Within 6 months of inception, we became the market leaders. Reflecting upon the greater issue of the credit gap faced by the young professionals, we decided to scale up our operations. To do so, we concentrated on building a full-stack digital lending platform, which led to the inception of KreditBee in 2018, a platform for New-to-Credit (NTC) and young professionals to avail loans online.

Who are the Co-Founders? There are 3 of us. I’m the CEO, Karthikeyan Krishnaswamy is the CTO, and Vivek Veda is the CFO.

Madhusudan-Ekambaram-Co-Founder-CEO-KreditBee
Madhusudan Ekambaram, Co-Founder & CEO, KreditBee

Karthikeyan-Krishnaswamy-CTO-KreditBee
Karthikeyan Krishnaswamy, Co-Founder & CTO, KreditBee

Vivek-Veda-Co-Founder-CFO-KreditBee
Vivek Veda, Co-Founder & CFO, KreditBee

EAR TO THE GROUND

Which vertical are you operating in?

  • Industry – Financial Services (FinTech)
  • Micro-industry – Lending (FinTech Lending)
  • Target Market Size – 300 Million NTC users

What is the complete range of products you’re offering? KreditBee is a FinTech Platform which offers instant personal loan to professionals, where they can avail loans up to a limit as per their requirement. We have a very balanced portfolio in terms of our monthly disbursement. The Flexi-Personal Loan is a short-term personal loan product with tenure ranging from 2 months to 6 months and smaller ticket size. This is the most popular loan product in our overall portfolio. We also have significant disbursements of Personal Loans for salaried professionals. The tenure ranges from 3 months to 15 months and the ticket size is larger. Then, we also have e-Voucher Loan, a loan product with disbursement in the form of e-Vouchers across various partner platforms like Amazon, Flipkart, Myntra, and MakeMyTrip, among others. We have a base interest rate, although for certain e-voucher loan products, we disburse at zero-cost EMIs as well. With these offerings, we aim to become the first choice when it comes to quick and convenient personal loans.

Who gave you the initial launchpad? KreditBee is a brand of Finnovation Tech Solutions Pvt Ltd, funded by some key VC firms and investment entities like ICICI Bank, Alpine Ventures and Arkam Ventures, among others.

What prompted you to enter the FinTech business? Personal finance and lending system have always been the subjects of great interest to me. For an economy like India to prosper, its citizens should possess easy access to responsible credit at their disposal. However, there lies a significant portion of the population in the new to credit customers, which find it strenuous, when it comes to credit access. The major reason for this credit gap being the inability of the traditional credit models to effectively assess them. To promote holistic financial inclusion, a lending firm should possess the ability and agility to utilize alternate data points, enabled by technology. Hence we focused on building a fintech platform in KreditBee. I am fortunate enough to lead this organization from a stage when digital lending itself was nascent and unheard of in the Indian ecosystem. Today, I feel proud to say that KreditBee is one of the largest digital lenders in the country disbursing INR a significant amount of loans on a monthly basis. 

Which problem are you trying to solve? When it comes to financial inclusion, there is a significant portion of customers who face a high degree of complications. These range from the lack of formal credit for the urgent purchase requirements to the process-oriented complexities like the large time required to process the applications and the amount of paperwork involved, yet a looming uncertainty of disbursals actually happening. With KreditBee, we aim to render the entire lending experience convenient and effective. KreditBee’s full-stack digital lending platform helps consumers get loans from their smartphones directly into their bank account at any given point of time with no paperwork or branch visits. The entire procedure is online, right from eligibility check, application, disbursement, and repayment. We look at alternate lending data points apart from salary and bureau score, and thus we are able to disburse to young professionals who are new to credit, and to those who are non-salaried like the gig workers including part-timers, freelancers, and self-employed.

What is your Business Model? KreditBee’s business model is based on standard digital lending, wherein the interest income from the consumers serves as a profitability metric in the Unit Economics sheet. We have also collaborated with multiple partners like Flipkart, Amazon, MakeMyTrip, and Myntra, among others, the partner income from which becomes an additional source of income, some of which we give away to our end customers. We aim at acquiring a good number of NTC (New to Credit) or self-employed customers and then migrate them to our higher loans product. 

Who are your debt partners? We have various debt partners like AU Small Finance Bank, HSBC, Fullerton, and IIFL.

Where do you see your organization heading down the line? With our meticulously designed offerings, we aim to become the first choice when it comes to quick and convenient personal loans. Along with the expediency of applying for a loan, we ensure that our clients build a strong credit history in this duration and become eligible to take bigger loans from the banks.  

FOCUS ON CUSTOMERS

Who are your target customers? We aspire to help the NTC (New-to-Credit) population become a part of the Credit Bureau system in India to enable them to borrow from banks and traditional NBFCs and become a one-stop solution for digital lending in the Indian ecosystem. The being said, we serve the relatively underserved young professionals and non-salaried like the gig workers including part-timers, freelancers, and self-employed.

What is the value proposition you are offering your customers? KreditBee utilizes a very robust underwriting system. This enhances the platform’s effectiveness in evaluating a significant portion of the new to credit customers, towards our bid to promote financial inclusion. This is done by integrating parameters and alternate lending data points beyond salary and bureau score. The effective data collection is complemented by our decision making scorecards, utilizing traditional regression models as well as nuanced ML neural net models, while our strategies are regulated through the usage of decision trees. Already a pivotal platform in KreditBee, we are focused on strengthening the utility of AI, ML, and the inculcation of more data sources, towards boosting its efficacy. Furthermore, the collection practices at KreditBee utilizes an effective integration of robotics, automation, and other technological facets, moving away from traditional agent calls, which significantly scales up the reach of the customers and offers various measures for collections. This leads towards building a comprehensive digital life cycle of the loan – from origination to application to disbursement and repayment being entirely online, and this is our value proposition.

How long does it take for your team to process the application process of a customer who wishes to avail a personal loan with you? Our documentation is very minimal. The entire process starting from registration to disbursement does not take more than 15 minutes. The application process is completely online, and on approval, the cash is immediately transferred to the bank account of the user.

What is your customer base? Currently, KreditBee has 5 million loan customers, out of which over 2 million are active loan customers. 

Repayment of loans has been a universal and major concern with financial lenders. What happens if a person who avails a loan does not repay KreditBee? For every day that a customer defaults on the payment, they will have to pay a hefty penalty over and above the principal and interest amount. They will automatically be ineligible for availing quicker personal loans of a much higher value from KreditBee in the future. 

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What has been the impact of COVID-19 on the digital lending segment and initiatives undertaken by KreditBee for your customers? When it comes to personal financing, COVID-19 brought to surface two basic demand variances, wherein, a portion of customers resorted to responsible buying, thus reducing the demand. On the other hand, a significant portion of customers felt the need to infuse capital, to tackle pandemic-induced liquidity crunch. Cumulatively, the demand has only increased. However, the circumstances posed for digital lenders, a need to revaluate their lending capabilities, with regards to their technological abilities to evaluate the customers’ repayment capabilities, and an overall attempt to promote financial inclusion.

An organization like us, possessing the technological agility, resorted to improvise our lending practices and evolve underwriting by utilizing profound alternative data points, towards accurate disbursal decisions. KreditBee’s initiatives focussed primarily on the stakeholders’ benefits. That being said, we concentrated on imparting the fundamental knowledge to the customers to ensure effective utilization of the initiatives. For instance, when it came to double moratorium decisions, we found it imperative to first educate the customers about the pros & cons of availing of the moratorium, followed by enabling it for the ones, who opted for it. Our manual efforts have gone into understanding & empathizing with the customer on the cash flow constraints while ensuring constant upgradation of the tech has been upgraded to enable customers to avail moratorium responsibly with the help of National Automated Clearing House (NACH) based payment scheduling.

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What is the core strength that sets you apart from other companies offering similar services? Our core strength is our business model. It combines our technological expertise enabling agility in the facets of the credit assessment and underwriting model and the digitalized overall loan process, across the range of specialized products. 

REGULATIONS

Is KreditBee RBI registered? KreditBee is not an organization registered with the Reserve Bank of India and does not hold any license to engage in any activities relating to lending or borrowing. However, the platform is backed by a Systemically Important NBFC Krazybee Services Private Limited, registered with RBI since May 2017, as well as various debt & platform partners. As an internet platform, we host multiple non-banking financial companies (NBFCs) who have a license from the Reserve Bank of India (RBI). This includes KrazyBee Services Private Limited and other platform partners.

What is the role and contribution of digital lenders towards Financial Inclusion? Financial inclusion is the availability and equality of opportunities for both individuals and businesses to access appropriate, affordable, and timely financial products and services. These include banking, loan, equity, and insurance products. 

WEARING THE HAT

Any recognitions that you wish to highlight?

  1. Identified as Top 100 Emerging Market Inclusive Fintech Lending Startups in 2017 by World Economic Forum
  2. Disbursed over 1 Million New Loans in a single quarter
  3. Disbursed over 1 Million Loans in a month

TEAMING UP

Employees-at-KreditBee1
Team KreditBee

How big is your team? We currently have an extensive team of 1200+ employees.

What are the key elements that guide your hiring process? Our hiring fund is to identify someone who believes in the vision of the company, understands the company culture, and is willing to stick around for the long term.

What are the qualities that you see in your team which reflect the unique culture of your company? At the core, our team is output-driven & execution-oriented. That being said, we are a very tight-knit team. We have all worked together at some point in our past careers and have known each other from the previous organizations. I feel it is very important to trust and respect your peers when you work together, especially in a start-up setting, which requires the team to have a good understanding to build the company from the ground up and see ourselves through rough times. We share that rapport of trust within and outside work.

Three words of advice to other entrepreneurs who wish to embark on their startup journey. Based on my journey as an entrepreneur, I would other budding entrepreneurs these three aspects:

“Possess awareness towards identifying key treadles for the business growth at key moments, while focusing on team building.

concentrate your efforts and time on fewer key metrics rather than adulterating them by trying too many things at once.

recognize the real value which the user is willing to pay a premium. The fact is that you never lose as an entrepreneur. You either win or you get to learn from each experience. The mantra is to keep at it.”

Madhusudan Ekambaram, Co-Founder and CEO

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