Mumbai: The Indian lending market is growing, without anything holding back the consumers. IndiaLends is an online marketplace/aggregator for credit products that include personal loans, credit cards, gold loans etc. Available on both web and mobile apps, it also offers its users free credit reports and other financial education tools. The company was founded by former UK’s Capital One banker Gaurav Chopra who has more than 15 years of domain expertise in driving innovation in digital finance, credit analytics and mobile payments in the Indian and global markets. He is also the founding member of Digital Lending Association of India (DLAI).
Putting things into perspective, IndiaLends, a marketplace for consumer credit products, is primarily focused on unsecured products, which have been the leading driver of consumer credit growth in recent years. According to the recent Lending Overview Report released by CIBIL, the number of inquiries for personal loans has increased 3.25 times between April ’21 and April ’23, whereas the growth in enquires for credit cards has risen 2.56X. Inquiries are representative of the demand in the market. Disbursals, on the other hand, take supply into account, including the amount and nature of demand that the supply is willing to fulfill. Between Feb ’22 and Feb ’23, over 2.2 lakh crores worth of personal loans were disbursed, marking a 30 per cent year-on-year growth. The corresponding growth for the preceding 12 months was 22 per cent, demonstrating a healthy appetite for credit. In the case of credit cards, over 1.17 crore new credit cards were issued in FY23, with credit card issuances consistently growing at a compound annual growth rate (CAGR) of 20 per cent over the past five years. Personal loans and credit cards have been the fastest-growing segments in the retail credit market, which is where IndiaLends positions itself.
IndiaLends is currently working with 55+ partners which includes major PSU and private sector banks, NBFCs, fintech and P2P lenders. The company also offers an open-API model for banks and NBFCs to partner with them through a plug-n-play approach.
IndiaLends also provides technology, data, and credit analytics solutions along with a loan management platform to financial institutions. The company is run by a team of credit risk professionals and data scientists with multiple years of experience in consumer credit. IndiaLends currently has a customer base of over 8 million and has disbursed loans worth Rs.2000 crore.
Founded in 2015, the Delhi-based financial technology startup has raised $25 million. Its investors include ACP Partners, DSG Consumer Partners, American Express Ventures, AdvantEdge Partners, and Ganesh Ventures.
Indiantelevision.com had a chat with IndiaLends chief marketing officer Ankit Khurana wherein he shed light on the journey and evolution of IndiaLends, millennials as their core target audience, the Wed-Spent report, and more.
Based out of Delhi, Khurana is an award-winning tech entrepreneur-turned marketer with over 15 years of industry expertise across diverse sectors.
Khurana joined IndiaLends, an online marketplace for credit products, as their head of brand and marketing in October 2021. At IndiaLends, he is responsible for building and executing brand and marketing communication strategies, customer life-cycle management, and consumer-facing product development. Khurana works closely with the founder on the other business imperatives.
Edited excerpts:
On the brand journey of IndiaLends since its launch – evolution of IndiaLends
IndiaLends began its journey eight years ago with the mission to improve access to credit for responsible borrowers by leveraging internet penetration and digitisation. Amongst the first issues we encountered in the journey was a lack of borrowers’ understanding of credit products and credit profiles. We were the pioneers in introducing a FREE credit report to our members to build awareness about healthy credit profiles and the importance of demonstrating responsible borrower behaviour.
Over the last eight years, digital lending has grown tremendously, and the regulatory framework has evolved. We have stayed true to solving the problem of digital distribution since we believe that in a diverse country like India, distribution is not simply a function of build, scale, and repeat. The diversity needs to be respected and customer expectations need to be managed with compassion. In the early stages, we observed inefficiencies in our ability to solve the problem through completely unassisted digital journeys, and we built our contact centres to ensure the customer borrowed with confidence.
The customer has matured over the years and the industry has grown manifold with newer entrants. Internet-based consumption is no longer a novelty. Therefore, we’re now bringing the focus back to strengthening digital journeys to complement our assisted approach. In addition to making borrowing a convenient yet transparent experience for the customer, we’re leveraging technology to have a continued focus on educating our customers about responsible borrower behaviour that will ensure they have capital available for growth or emergencies.
Over the past eight years, we’ve earned the trust of 15 million+ members to whom we present prequalified loan and credit card offers from a range of 70+ RBI approved lenders. Our scale enables us to be a default acquisition channel for new and old lenders in the market, at the same time our core of analytics helps us credibly participate in new product innovations in the industry. It is our current position and laser-sharp focus that we believe will allow us to continue to solve the pain points we identified as a business opportunity, and simultaneously build more trust and awareness within the eco-system where every responsible individual can access capital to achieve financial success.
On your maximum customers as millennials, and their attitude towards credit borrowing/lending
Millennials have a disproportionate representation in the consumer credit customer mix, with over 44 per cent of borrowing done by millennials, as reported recently. It’s safe to say that millennials are not only the most attractive super-segment for credit but also for most consumer brands. It’s important to find smaller segments on either boundary of the age grouping, as well as individuals living in metros and tier I cities vs tier II and tier III cities. Our observation reveals that the younger audience is more receptive to utilizing the power of credit for growth, unlike previous generations. The prevalence of hyper-connectivity and global exposure has led to the more deliberate use of financial tools, and credit has become a viable tool in the personal financial management toolbox for millennials and Gen-Z. In contrast to previous generations, millennials do not view debt as a symbol of financial mismanagement; instead, they seek to utilize it intelligently to achieve their financial and lifestyle goals.
On launching Digital Lending 2.0 and its evolution post – pandemic
Digital Lending 2.0 was focused on leveraging technology and enhancing access through 100% digital journeys. The initiative has worked better than expected and we see a 3X improvement in customer experience and time to disbursal for our customers. We are scaling up the project with the aim to generate over 70 percent of our revenue through Digital Lending 2.0 journeys in the current financial year. We are already working on the 3.0 version, and expect a pilot very soon.
On the 5th edition of the #WorkingStree study
The #WorkingStree Survey is an annual survey conducted by IndiaLends to identify and raise awareness about challenges faced by working women across the country. As a brand, equity is extremely important to us, but to create equitable solutions we need to understand the issues faced by different segments. #WorkingStree was started as an attempt to understand the challenges faced by working women. We believe that as a young brand, we have a role to play in nation-building, and the nation cannot achieve its true potential until 50% of the population has equitable access to opportunities. Currently, that participation lags at approximately 10%. We will continue to shed light on these issues to encourage greater participation and also strive to contribute towards solving some of these challenges. This year we partnered with SHEROES for the study to provide access to our female members to the Learn, Earn, and Grow Program, which received positive feedback and response.
On launching the Wed-Spent report jointly with BetterHalf.ai
We partnered with BetterHalf.ai to launch the Wed-Spent report, which provided valuable insights into millennials’ wedding expenses and their borrowing habits related to wedding loans.
Through our research, we discovered that millennials are increasingly choosing to finance their weddings through self-funding, and a significant percentage opt for wedding loans to cover their wedding expenses. Our survey revealed that approximately 54 per cent of respondents prefer mid-size loans ranging from Rs 1 lakh to Rs 5 lakh for their wedding expenditures. Additionally, we have noticed a growing interest among millennials in using digital lending platforms like IndiaLends as their preferred choice for obtaining loans.
A keen observation we had about millennials that sets them apart from previous generations is that a vast majority look at weddings as a more intimate affair. They’re inclined towards smaller events that are more personalised and close-knit. A significant number of respondents had dismissed the idea of a big fat Indian wedding.
Looking ahead, we are excited about the next Wed-Spent Report, where we anticipate uncovering further insights into millennials’ evolving preferences and behaviours regarding wedding expenses and loans. Our goal is to continue innovating and introducing new financial solutions that empower millennials to realize their dream of a memorable wedding while maintaining financial stability.
Overall, our collaboration with BetterHalf.ai and the insights derived from the Wed-Spent report has deepened our understanding of millennials’ wedding loan habits. We remain committed to innovation along with our lending partners that can support our members in celebrating this special milestone to their heart’s desire.
On the advertising and marketing strategy devised for IndiaLends for 2023
We are an ROI-obsessed marketing team and leverage all digital channels available that can help us achieve our target ROAS. Over the last 12-15 months, we changed our strategy which has resulted in a lower ad spend recovery period by 10X as well as improved our ROAS over a 90-day maturity of a credit active lead by 4X. We intend to continue with a proven strategy to now scale up. We are also looking to use these savings to invest in building a stronger brand and drive higher repeat transactions over the next few years.
On customer persona, their changed behaviour (pre and post pandemic), and the approach to cater to customers
As a marketplace with over 70 lending partners, we cater to a majority of the segments out there. We are able to provide competitively priced pre-qualified personal loans, and credit card offers equally well to the super prime customer as a near prime and subprime customer. Some of the major changes we’ve observed in consumer behaviour are in average ticket size, tenure, and frequency of borrowing. Ticket sizes and tenures have demonstrated a downward trend, whilst consumers are either borrowing more often or opting for multiple products. The primary reason for this change in behaviour is enhanced consumer awareness. Borrowing became a viable option for many during the financial insecurity inflicted by the pandemic. There is a negative connotation to the word loan or debt in India. The financial hardships of the pandemic nudged people to understand credit better and consider borrowing not only for the purchase of large items like cars and home appliances but also as a viable solution for temporary cash flow needs.
On the media mix, you are looking at utilising for IndiaLends
Our entire business model is digital. As a result, in order to assist our customers effectively, we rely on their ability to access digital solutions and their trust in digital platforms. Our preference has been digital channels so far, and we have acquired more than 15 Million members on our platform. We continue to add nearly 5-6 Mn new members each year without facing challenges in scaling up. Additionally, we are obsessive about ROIs and approach all spending with a clear ROAS target irrespective of the stage of the funnel we intend to target. Digital allows us to monitor our investment in customer acquisition with a higher degree of attribution accuracy. Platforms like Youtube and other short video content platforms are seeing exponential growth in adoption, and that provides us sufficient headroom for our 100 million member goal without relying on CTVs.
On data-driven decision-making
Data is at the core of our business, whether it’s risk modelling, understanding consumer behaviour, or planning marketing campaigns. My take on data-driven decision-making is that data is essential to validate hypothesis and remove biases that can creep into decision-making. However, in a world where data is in abundance, it can often lead to analysis paralysis. This is where I believe ‘Quantitative Intuition’ is becoming increasingly relevant. As decision-makers, we can continue to seek more data, but it may not be the most practical process of decision making especially when time is a critical variable. Therefore, it’s essential to develop the ability to ask precise questions and identify trends, so decisions can be made even when the information available is incomplete. Quantitative Intuition is a framework that was developed by Prof. Oded Netzer and his colleagues at Columbia University. I consider myself fortunate to have been a student in his CMO Program at Columbia University, which I recently completed.
On the challenges, lessons, and learnings through this journey
Challenges are a part of every journey, and that is what makes an engaging story out of the journey. As a marketplace, we position ourselves as an unbiased filter between the borrower and the lender. We have an equal commitment to improving access to quality credit at the lowest cost for our customers as it is to provide a steady, scalable flow of financially responsible credit-worthy borrowers to our lending partners. We leverage technology, data science, and good ‘ol educational content to bridge this gap. Our biggest learning from the journey has been that being empathetic towards customers is most crucial especially when we’re unable to help the customer secure the funds they need. It’s fashionable in the tech startup world to say we’re on an exponential growth curve, and there’s nothing wrong with it. However, our learning is that exercising discipline with a dash of conservatism can ensure longevity in our kind of business. That’s the reason we’ve been able to deliver a full financial year of net profitability along with a 3X growth in business in the last financial year.
On the trends and innovations that are expected to disrupt this category
Digital adoption has been the biggest boon for this category in the recent past. The regulator has been monitoring the segment with a keen eye, and we also see the government listing credit access as a key driver for economic growth. Technologies like blockchain, digital currencies, and more embedded financial products will drive innovation in the near future. Machine learning is already widely deployed for risk modelling, and we see AI playing a bigger role in the future to help personalise credit products for borrowers whilst reducing risk for lenders.
On your vision and way forward for IndiaLends as a brand
IndiaLends as a marketplace focuses on enhancing access through our expertise in digital distribution. As a brand, we will continue to uphold our brand values of Transparency, Choice, Empathy, and Mindfulness. Our vision as a brand is not only to make credit more accessible for the able but also to create awareness about responsible borrower behaviour in an edutaining manner to ensure credit always contributes to the financial success of our members.
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