MoneyTap pro­vides credit line on mo­biles

Banking Frontiers - - News - Mo­han@bank­ingfron­

It is like get­ting a loan sanc­tioned on the go. The app fa­cil­i­tates sanc­tion­ing of small ticket loans in min­utes

It is like get­ting a loan sanc­tioned on the go. The app fa­cil­i­tates sanc­tion­ing of small ticket loans in min­utes

Here’s an app that of­fers you a credit line. MoneyTap is the first of its kind app that of­fers funds on de­mand with zero col­lat­eral for salar­ied and self-em­ployed per­sons. There is no need for bank vis­its, phone calls and what is re­quired is just 4 doc­u­ments and 4 min­utes to file the ap­pli­ca­tion. And the el­i­gi­bil­ity is as­sessed in­stantly and eval­u­a­tion is done real-time. And the loan ap­proval is avail­able al­most the next minute.

“A credit line for con­sumers with ac­ces­si­bil­ity through an app is a new con­cept in In­dia and we are ex­cited about the op­por­tu­ni­ties it can bring to thou­sands of mil­lions of In­di­ans,” says Ku­nal Verma, co-founder of MoneyTap, the startup that is head­quar­tered in Ben­galuru. “MoneyTap is like a friend who gives you money when in need, be it mar­riage, birth, sud­den death in fam­ily, school fees, hos­pi­tal bills or sud­den cash crunch dur­ing the month-end. MoneyTap wants to make credit avail­able for de­serv­ing and el­i­gi­ble can­di­dates with­out the has­sles of pro­ce­dures and for­mal­i­ties,” he adds.


Verma says MoneyTap’s mis­sion is make credit ac­ces­si­ble to those who de­serve it. He main­tains that the app is a truly pow­er­ful and dis­rup­tive fi­nan­cial in­stru­ment fa­cil­i­tated by the ubiq­ui­tous pres­ence of smart­phones and ini­tia­tives such as Aad­haar. The fa­cil­ity is pro­vided as credit line for con­sumers, of­fered in part­ner­ship with lead­ing banks and NBFCs. “Given In­dia’s low credit card pen­e­tra­tion and fast-grow­ing smart­phone pop­u­la­tion, In­di­aS­tack (UPI, Aad­haar) and other changes in the land­scape, our goal is to rein­vent qual­i­fi­ca­tion, dis­burse­ment and col­lec­tion as­pects of con­sumer credit us­ing tech­nol­ogy and smart­phones. It’s a joint of­fer­ing with fi­nan­cial in­sti­tu­tions where we bring in dig­i­tal cus­tomers through the app, qual­ify them, share risk (par­tially), help un­der­write them cost-ef­fec­tively and dis­burse the money in the form of a credit line, all on the app backed by cloud-based credit and trans­ac­tion servers. Since the launch in Septem­ber 2016, we have at­tracted over 400,000 users and launched the app in Kan­nada in Ben­galuru,” says Verma.

He sees MoneyTap as a fa­cil­i­ta­tor, help­ing con­sumers to get credit eas­ily and quickly through rec­og­nized bank­ing in­sti­tu­tions with the power of mo­bile tech­nol­ogy. Mid­dle in­come cus­tomers (salar­ied and self-em­ployed) mak­ing `20,000 per month or more and fac­ing fre­quent cash crunch for reg­u­lar needs like ed­u­ca­tion, med­i­cal, birth/death, etc, are not ser­viced by fi­nan­cial in­sti­tu­tions with­out put­ting up col­lat­er­als. Dur­ing pi­lots, the founders were told by po­ten­tial cus­tomers they needed such a fa­cil­ity. And to­day, they can have ac­cess to credit with a sin­gle tap on the mo­bile phone. It is also in­tro­duc­ing the con­cept of credit line in part­ner­ship with banks.


Verma ex­plains credit line: “Credit line means a bank will is­sue a limit of up to `5 lakh with­out any col­lat­eral or charg­ing any in­ter­est. Against this limit, us­ing the MoneyTap app, cus­tomers can bor­row as lit­tle as `3000 or as much as `5 lakh and re­pay it as EMIs in 2 months to 3 years. The in­ter­est is paid only on the amount bor­rowed and the rates can be as low as 1.25% per month. The limit also gets au­to­mat­i­cally re­plen­ished as soon EMIs are paid back. Any salar­ied or self-em­ployed pro­fes­sional can down­load this free An­droid app and in a few min­utes, us­ing a patent-pend­ing chat­bot in­ter­face, pro­vide all the in­for­ma­tion typ­i­cally re­quired by the banks. The app se­curely con­nects with the bank­ing sys­tems to give them not only an in­stant ap­proval but also a credit limit, de­pend­ing on in­di­vid­ual credit his­tory.”

He ex­plains that once a credit line is sanc­tioned with an up­per limit, one can choose to with­draw spe­cific sums from the credit line. This con­trasts with ob­tain­ing a per­sonal loan would force one to take the en­tire sum sanc­tioned even when the re­quire­ment is spread over a pe­riod. The in­ter­est would be charged only on the small amounts with­drawn and not on the en­tire sanc­tioned amount. This ac­tu­ally makes a whole world of dif­fer­ence to a per­son’s monthly cash flows and over­all fi­nan­cial con­di­tion. The flex­i­ble bor­row­ing

op­tions also come with the con­ve­nience of de­cid­ing pay­back pe­ri­ods for the sep­a­rately bor­rowed amounts. Thus, for an amount of `5000 bor­rowed from the credit line, one could choose to re­pay in 2 months and pick a longer ten­ure for `50,000, say any­where be­tween 12 months. In con­trast, a per­sonal loan ten­ure would be fixed up­front with lit­tle or no flex­i­bil­ity in most cases. An­other ad­van­tage is that as soon as EMIs are paid back, the credit line gets re­plen­ished au­to­mat­i­cally and one can con­tinue the cy­cle of bor­row­ing and re­pay­ments with­out need­ing to ap­ply again.


Varma be­lieves there is some­thing niche about MoneyTap. Says he: “MoneyTap not only qual­i­fies a cus­tomer but stays in his pocket to give a bite-sized loan when­ever he needs it. Our data-backed re­search re­flected that peo­ple are not com­fort­able go­ing to banks for loans for min­i­mal amounts - say from `3000 to `50,000 to `1 or 2 lakh. On the other hand, ask­ing for money from fam­ily and friends al­ways has an em­bar­rass­ment fac­tor. Thus, for even the sim­plest of credit needs, peo­ple are put un­der high scru­tiny. This is where we thought that an in­no­va­tive, peo­ple-friendly credit prod­uct would be a friend one could reach out to in times of need and get in­stant help.”


How is the cred­it­wor­thi­ness of a bor­rower as­sessed? Verma says on av­er­age, it takes 8 min­utes for a cus­tomer to qual­ify af­ter open­ing the app. The ap­proval is in­stant, on the app. Af­ter that, the KYC for­mal­i­ties are com­pleted. And there are no charges levied at all.

There are of course some qual­i­fy­ing stan­dards. Firstly, an in­di­vid­ual needs to qual­ify the MoneyTap el­i­gi­bil­ity cri­te­ria: 23 years and above in age, salar­ied in­di­vid­u­als with min­i­mum salary of `20,000 pm, cred­i­ble KYC doc­u­ments and res­i­dents of Delhi, NCR, Mum­bai, Ban­ga­lore, Hy­der­abad, Chen­nai, Pune, Ahmed­abad, Vado­dara and Bharuch (will be launch­ing in other cities soon).

“Our tech­nol­ogy plat­form, along with those of our part­ner banks, does a se­ries of checks on the ap­pli­ca­tion be­fore the funds are made avail­able to the cus­tomer. If at any stage the in­for­ma­tion fur­nished by the cus­tomer or the ver­i­fi­ca­tion(s) ini­ti­ated by us are found to be in­com­plete, fraud­u­lent or un­ver­i­fi­able, then the ap­pli­ca­tion will be ter­mi­nated. No fees will be charged. Our part­ner banks check the cred­it­wor­thi­ness of the ap­pli­cant based on their credit his­tory. The ap­pli­ca­tion is ap­proved/ dis­ap­proved ba­sis all the steps. Once ap­proved, the credit limit is set ac­cord­ing to the credit his­tory,” Verma ex­plains fur­ther.

MoneyTap gets a small por­tion of the trans­ac­tion fee from the bank. It does not charge the cus­tomer. There is no fee for down­load­ing the app and get­ting the ap­proval. An amount of `499 + taxes is charged as an An­nual Line Setup Fee to avail the MoneyTap fa­cil­ity. “This amount al­lows us and our bank­ing part­ners to ‘block’ the amount of money so that one can with­draw money 24 hours a day, 7 days a week. The fee also in­cludes the ini­tial home vis­its and pro­cess­ing of one’s KYC.


MoneyTap’s full stack tech­nol­ogy plat­form in­te­grates deeply with its bank­ing part­ners’ sys­tems and cov­ers the full cus­tomer jour­ney and prod­uct life­cy­cle. Verma elab­o­rates: “On one side, we have our mo­bile app for cus­tomers that is cur­rently avail­able on An­droid plat­form. The app it­self has a pro­pri­etary, chat-based in­ter­ac­tive de­sign that pro­vides an in­tu­itive, con­ver­sa­tional ex­pe­ri­ence like chat­ting with a friend. Then, there is the back­end, which en­com­passes the full credit life­cy­cle right from qual­i­fy­ing and se­lect­ing a cus­tomer to man­ag­ing com­pli­ance re­quire­ments and trans­ac­tions. The back­end server in­fra­struc­ture is largely AWS- based. There is deep API in­te­gra­tion be­tween fron­tend and back­end and be­tween MoneyTap and our bank­ing part­ners’ tech­nol­ogy sys­tems or des­ig­nated third par­ties. This al­lows for in­for­ma­tion move­ment and work­flow man­age­ment in real-time. Ad­di­tion­ally, we have an ex­ten­sive an­a­lyt­ics and data sci­ence in­fra­struc­ture that al­lows us to make in­tel­li­gent work­flow de­ci­sions and build and en­hance our al­go­rithms for of­fer­ing valu­able ser­vices to our cus­tomers. We’ve also filed for a few patents around the tech­nol­ogy that we’ve built.”


MoneyTap in­tends to reach one mil­lion In­dian cus­tomers in the next 3 years. It is cur­rently present in 14 cities in In­dia and to meet the goal, it aims to cover 50 cities by the end of 2017. “While we have a tie-up with RBL Bank at present, we will be part­ner­ing with a num­ber of other banks in the com­ing months. We are al­ready cater­ing to the salar­ied and self-em­ployed seg­ment with earn­ings above `20,000 per month and the goal is to in­clude those peo­ple earn­ing be­tween `20,000`15,000 and even­tu­ally reach out to the ones earn­ing `15,000 – `10,000 as well. We just launched the app in Kan­nada and have plans to launch it in other re­gional lan­guages soon,” says Verma.

Ku­nal Verma ex­plains how MoneyTap will ex­ploit the ubiq­ui­tous pres­ence of smart­phones to of­fer credit line to those el­i­gi­ble for it

Staff at MoneyTap in a dis­cus­sion ses­sion

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