OpenTap is for blue-col­lar work­ers

Banking Frontiers - - Altfin Companies - Mo­han@bank­ingfron­

OpenTap is an early stage AltFin com­pany, serv­ing the mid­dle to low in­come groups and aim­ing to fi­nan­cially in­clud­ing blue col­lar work­ers. Senthil Natara­jan, co-founder and CEO of the com­pany, speaks about his vi­sion and plans:

N. Mo­han: What dif­fer­en­ti­ates OpenTap from other mar­ket play­ers in this do­main?

Senthil Natara­jan: OpenTap has a 3-point dif­fer­en­tia­tor from other play­ers in the mar­ket – the tar­get pop­u­la­tion, the prod­uct and the busi­ness model.

Which seg­ment of the pop­u­la­tion is your main tar­get au­di­ence? Why?

The un­der­served blue-col­lar work­ers are our main tar­get au­di­ence. This seg­ment of the pop­u­la­tion is not only un­der­banked, they are un­der­served as well. Within this pop­u­la­tion, we find that the salary range varies vastly. At present, the up­per / higher range un­for­tu­nately is the ba­sic criterion for sev­eral play­ers to de­ter­mine eli­gi­bil­ity and dis­burse loans. And of­ten­times, when this sec­tion of the pop­u­la­tion ap­plies for a loan, they get side­lined or re­jected. This is pre­cisely the pop­u­la­tion OpenTap is ad­dress­ing. We have de­vised a method­ol­ogy to an­a­lyze their cred­it­wor­thi­ness and we are in­tro­duc­ing them to the world of al­ter­nate fi­nance – start­ing off with short­term per­sonal loans.

What is your or­ga­ni­za­tional struc­ture to cater to the needs of this tar­get au­di­ence?

OpenTap has very au­da­cious goals to be­come the one-stop-shop for this seg­ment of the pop­u­la­tion for all their fi­nan­cial needs. The or­ga­ni­za­tion struc­ture has been de­signed to cater ex­actly to that re­quire­ment. We fol­low a hub and spoke model – satel­lite of­fices in tar­get mar­kets with all the cru­cial sup­port func­tions at the head of­fice. We have also de­ployed tech­nol­ogy to en­sure that we as an or­ga­ni­za­tion work to­wards dig­i­tally in­clud­ing this pop­u­la­tion, which is cur­rently vastly off-line. We be­lieve fi­nan­cial in­clu­sion will pave the way for dig­i­tal in­clu­sion.

How cru­cial is tech­nol­ogy’s role in shap­ing P2P land­scape in In­dia?

I strongly be­lieve tech­nol­ogy will play a very crit­i­cal role in shap­ing the al­ter­nate fi­nance land­scape in In­dia. This is mainly to ad­dress the scale – be­cause the pop­u­la­tion need­ing to be fi­nan­cially in­cluded is that large. While tech­nol­ogy will ad­dress scale, it will also help in­crease turn­around times, re­duce chances of er­ror and make the en­tire process from ap­pli­ca­tion to col­lec­tion user friendly and ob­jec­tive. All that said, tech­nol­ogy will also has­ten the pace of dig­i­tal adop­tion / in­clu­sion – which then will cer­tainly open a whole new world of prod­ucts and ser­vices to this tar­get pop­u­la­tion.

How is risk mit­i­ga­tion taken care of? What about NPAs and their man­age­ment?

OpenTap fol­lows a unique strat­egy of pre-se­lect­ing a group of cus­tomers based on their em­ploy­ment to re­duce risk. The first point of en­try for them is a short-term per­sonal loan, which helps the cus­tomer tide over a cri­sis or any other press­ing re­quire­ment. The na­ture of the prod­uct and the rea­son­ing re­duce the risk of de­fault and our track record def­i­nitely proves that point. We try to avoid NPAs and when they do oc­cur, it is solved by ed­u­ca­tion and peer pres­sure.

Do you con­sider the re­cent reg­u­la­tions as help­ful for P2P play­ers?

The seal of ap­proval and the cred­i­bil­ity it brings is use­ful for P2P play­ers, no doubt. That said, the `10-lakh limit for lenders, if ap­plied for in­sti­tu­tional lenders also, is cer­tainly an is­sue. As is the pre­ven­tion of any cross sell­ing. It doesn’t help end cus­tomers at all - un­se­cured per­sonal loans is only one part of the story.

What will be the es­ti­mated size of the In­dian P2P mar­ket in next 3 or 5 years?

As per a KPMG / NASSCOM re­port, the In­dian P2P mar­ket would be any­where be­tween `4-5 bil­lion by 2023.

How sus­tain­able is your busi­ness model in the years to come? Who are the com­peti­tors and how evolved are the sys­tems that can take on this com­pe­ti­tion?

Frankly, com­pe­ti­tion does not oc­cupy too much of our mind space. When we are talk­ing about fi­nan­cial in­clu­sion, I be­lieve the more com­pa­nies there are in the mar­ket, the mer­rier. There is just so much to do. That said, there are sev­eral com­pa­nies that ad­dress sim­i­lar re­quire­ments that OpenTap does, but they are not ex­actly in the same bucket. So, OpenTap oc­cu­pies a po­si­tion that is uniquely ours – from a tar­get seg­ment and ser­vices per­spec­tive.

As far as our busi­ness model goes, it is not static. It will evolve and adapt with the mar­ket and the re­quire­ments of our cus­tomers over time. And mind you, only play­ers who are able to adapt will sur­vive to make an im­pact.

Senthil Natara­jan has a sim­ple so­lu­tion to con­tain NPAs - avoid NPAs in the first place and when they do oc­cur, solve it by ed­u­ca­tion and peer pres­sure

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.