Fintech startups are challenging the status quo and offering an alternative to traditional banking channels for accessibility to financial products. Agility and innovation have set FinTech startups apart from conventional banks and financial institutions. Such firms have “out-of-the-box” business models that leverage technology to deliver financial services in a cost-effective, swift and convenient manner. The potential of these companies operating in a digital world surpasses that of a high-touch bank model in terms of scalability. Within the digital sphere, fintech companies can reach the financially excluded population. This implies that financial inclusion can be bolstered through new channels such as mobile lending wallets. This opportunity to “uberise” financial services at high scale and minimal operating costs has formidable potential—expediting the economic development of middle-to-low-income communities.
CASHe, India’s most preferred digital lending company, recognizes such concerns and offers instantaneous short-term personal loans to young professionals without any hassle that a typical bank makes them go through.
The company provides personal loans based on the client’s social profile, digital footprint, merit and earning potential using its proprietary algorithm based machine learning platform. It is a new-age digital lending company which basically does lending based on a sophisticated algorithm. The mathematical algorithm finds out the risk of a borrower based on his social and mobile data footprints. It examines user’s phone usage and all data that is available in the public domain. Its model goes beyond traditional credit-risk metrics and assesses the goodness quotient in the borrower and the ability to repay. Hence, the company lends to younger people who are either near- prime or subprime borrowers with or without prior credit history.
Presently, CASHe is financing thousands of Young professionals across India – it has given loans to borrowers in all 37 states of India. Raman Kumar, Chairman of CASHe proudly said, “We are now two years old. We’ve got about 1.45 million millennials who’ve downloaded the app. We’ve got almost 180,000 customers who have approached us for loans. We’ve given loans to almost 60,000 of them. 70% of these people come repeatedly to us. So, we are one of the fastest Fintech lending companies in India in this particular segment. So that really is the background of the company.”
An Ingenious Leader of the Organization
An ingenious leader, V. Raman Kumar, Founded CASHe as a Fintech Company focused on lending to salaried millennials in 2016. After completion of his graduation from St. Stephens College, he was selected to Indian Revenue Service while still doing his Masters in 1984. He then attended Yale university for his MBA. He started his first company CBay Systems Ltd. in 1998 in the US in a city called Annapolis with offices in Bangalore and Mumbai. He started his journey with seven people in the US office and two people in India. His dedication has brought the company from there to a whopping 10,000 people. In 2011, he had 5,000 people in the US & 5,000 people in India as well.
“We were a global company with operations across geographies. We had a listing on Nasdaq as MModal Inc. And then, I sold the company to J.P. Morgan’s One Equity Partners for about 1.1 billion dollars in 2012 in one if the largest healthcare technology transactions of that year. Since then, I have invested in a bunch of businesses across the globe, including India. I’m also a private equity investor in private equity funds, as well as in my personal capacity.” Raman added.
Raman has won awards and accolades including Ernst and Young’s entrepreneur of the year award for 2007 for Maryland.
The Inspiration behind CASHe App
Raman muses about the current loan system and says, “The current scenario is that a majority of people falling in the age group 22 to 36 prefer to use digital banking than go to brick and mortar branch offices of a bank. Earlier, people used to routinely visit banks for all money and credit, but now technology has changed the entire delivery system. Another significant thing to note is that banks and other financial institutions approve loans based on people’s past credit performance. So, if one has a good credit rating and is above the decided threshold, let’s say if it is 750 as per CIBIL ranking system, the person will be eligible to get a loan. On the other hand, if one’s credit score is below 750, the applicant wouldn’t be able to get a loan.”
He also added, “The main issue here is young people freshly recruited in jobs have necessarily no past credit history. These are the people who hardly ever check their CIBIL Scores, and many of them are unaware of credit ratings. There are a lot of people who have never taken a loan and have been supported by their parents in the past. In most cases, they haven’t really taken any loan and have used their parents’ credit cards in their times of need. So how can these people get a loan in their times of emergency? For instance, if a young boy or girl gets into a job and shifts/relocates to Mumbai, and suddenly there’s an emergency where he/she needs 50,000 rupees. Well, the person has to ask a friend or seek help from the employer. This is the scenario that inspired me to introduce this innovative loan application – CASHe ”
An Inimitable Service that CASHe Provides Loans in Eight Minutes
When people requesting a loan from a bank require many essential documents such as multiple forms, signatures, credit rating, address proof and Security collateral or loan guarantors. Millennials view this as cumbersome and unnecessary. Most of the time they do not avail loans because of this dysfunctional nature of loan taking process. CASHe, after thorough market research realized that the present personal loan giving system required disruption – hence they introduced an app based lending platform using AI, Big Data and even Blockchain to digitize the entire loan giving process.
Empowering the Advanced Technologies to Enhance Clients Base
For any business to grow bigger and make a difference to the world, it needs to have a unique proposition. Technological leadership in the form of AI, big data analytics and Blockchain allows Cashe to predict behavior of borrowers beyond conventional metrics. The second most important thing for any business to be successful is to address a large market. So India, with an abundant young population, the huge contribution of services to GDP and a predicted growth rate of 8 percent with a disproportionate contribution from services sector all make the Indian market a compelling place for innovative fin-tech solutions like the one offered by CASHe.
Out-of-the-box Strategy Execution
In a digital world, winning and retaining young customers hinges on creating value for them that enhances the convenience and quality of their everyday lives beyond mere transactions
“The whole concept of new-age digital lending is quite unique in terms of giving a young borrower a wow experience by giving a loan in under eight minutes without any paperwork, collateral and the moment he requests for it over his app, anytime, anywhere. This is an unbelievable experience for first time customers.” Raman asserts.
For the young professionals who often find themselves in complicated financial situations, this easy-to-use application is the best way to get rid of the tedious paperwork and human interactions. CASHe simplifies their borrowing experience by taking out the complexities involved in the taking of a loan. The user experience is hundred percent app based, user friendly, flexible with multiple loan options, and totally digital. The 8-minute Turn-Around-Time for loan disbursal, without the user having to leave their home, is a unique feature of CASHe. Besides this, what makes it even more unique is the proprietary credit evaluation framework, the Social Loan Quotient (SLQ), which uses a combination of Big Data Analytics and proprietary Artificial Intelligence based algorithms to evaluate traditional inputs and the user’s digital footprint to measure their credit worthiness. The SLQ determines both the loan amount and the interest rate charged. SLQ is both dynamic and forward looking in nature as it measures a borrower’s propensity to repay based on currently available information, as opposed to traditional credit scoring systems which deliver a score based only on historical financial behaviour.
Money-making Ideas for Budding Entrepreneurs
“An aspiring entrepreneur who applies creativity to any money-making endeavour is almost sure to land on something profitable. They need to figure out carefully what is the size of the market they would be serving, what are the current gaps that needs to be fulfilled, how much investment will be needed to market their product. Most exhaust all their cash flows just by spending a lot of money to acquire customers. What they need to really strategize it how to make their product disruptive enough for them to grow exponentially without spending a lot of money on marketing”. states Raman.
Over the next month, CASHe will work towards a full implementation of its industry-first distributed ledger technology enabled smart contracts to support its loan transactions from origination to pay off, and will subsequently work toward its market adoption. CASHe is the first player in the Indian fintech industry to adapt this technology in its lending business. Further product enhancements will also include offering loans to professionals who don’t have a fixed income and also increase the loan repayment tenures to cover one and two years