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In Conversation With Mr. Ashwin Bhambri, CEO, PhoneParLoan

In An Exclusive Interview With BW Disrupt, Mr. Ashwin Bhambri, CEO, PhoneParLoan talks about the company's inception, competitors, funding status and more.

Founded in 2018, with headquarters in Delhi, PhonePar is present in Tier 2, 3 & 4 cities. The platform has served over 1 million customers and aims to build a top-line recall lending BRAND for Bharat and will be Indias largest lending platform by 2022

1.Brief us about your business model like how did the idea come to being and how does it work (step by step procedure)?

Catering to thin-file customers in India and Bharat alike, PhoneParLoan is a mobile-first credit platform that extends loans to ‘New to Credit’ (NTC) customers. It provides ‘Quick Loans’ and ‘2-Wheeler Loans’ worth up to Rs. 5 lakhs for 48 months or less.

PhoneParLoan has today simplified the lending activity for both lenders and their end-customers. It has done it using its state-of-the-art, tech-driven approach that is both user-friendly and transparent. PhoneParLoan provides all types of consumer loans including micro-loans, personal loans, car loans, house loans, white loans (for TV, refrigerator, laptops, etc.), and livelihood loans involving credit for e-Riksha, Sewing Machines, Tractors, Delivery Bikes, and so forth.

The loan process involves a quick in-app loan application, KYC submission, instant approval, and easy repayments. 

2.What are the unique key points of your company?

Today, there is a major void prevailing in the credit assessment process, something that adds to the woes of first-time borrowers in India. Their limited financial data bars them from availing credit services. It is the central pain point that we solve. We empower thin-file credit applicants to enjoy credit services seamlessly via our partner lenders. PhoneParLoan leverages advanced technologies and alternate data repositories. The approach analyzes the creditworthiness of loan applicants accurately even if they are thin-file customers hailing from tier II and tier III cities or beyond. The effectiveness of the platform can be gauged by the fact that we have a success rate of 96% for salaried individuals who complete their KYC process.

3.How are you different from the existing competitors?

To begin with, the retail credit gap in India is too enormous to be solved by a single entity. At PhoneParLoan, we believe in healthy competition. It not only paves the way for targeted innovations but also ensures that the customers receive entire value for their money. 

Still, several differentiators set us apart from our closest competitors. The biggest of them is our all-encompassing approach to serve thin-file customers in India. We have covered nearly every use case of a personal loan that an individual can come up with. Our customer-friendly and tech-driven operations are some of the reasons why we have more than 1 million happy customers.

4.What is the funding status, and the monetization model? 

I started this company in January 2019 with the support of my long-term friend, Mr. Anand Kumar, who is also the Founder & Managing Director of Pier Counsel. He operates as a Silent Partner in the business. PhoneParLoan has received the pre-seed funding to establish the business. 

We have a commission-based model wherein we connect creditworthy applicants with our lending partners. Our lending partners pay us a small fee for each approved application.

5.How PhoneParLoan has come across the hurdles in running the business?

Phoneparloan became profitable in its first year of operations. In 2020, due to lockdown, the entire segment was impacted as many lenders went down. However, PhoneParLoan decided to expand the business using alternative routes. We maintained a lean team with a razor-sharp focus on the mobile app front and its constant development. We also introduced additional services such as insurances to help our customers cope with the COVID times. Innovation has been our cornerstone for horizontal business expansion.

6.What are your upcoming projects?

We provide loans in various categories. Our current service portfolio includes Vehicle Loans, Home Loans, Personal Loans, Education Loans, and so forth. Now, we are going to introduce new loan products soon for our consumers.

7.How do you look at expansion?

With the aspiration to support unserved or underserved people from rural regions, we plan to extend more services through our application in addition to money lending.  

8.What have been the biggest learnings so far?

The whole journey with PhoneParLoan has been a great learning experience. It has taught us to deal with unique business challenges and intuitively gauge the new requirements of users. I believe that providing solutions in the simplest format always helps the fintech businesses, especially the ones targeting non-urban regions. It is because most of our non-urban population is not much tech-savvy.  

9.What is the market size, and opportunity? 

The global Fintech market reached a value of nearly $111.24 billion in 2019, having grown at a Compound Annual Growth Rate (CAGR) of 7.9% since 2015. It is now expected to grow at a CAGR of 9.2% to about $158 billion by 2023. This figure is further anticipated to reach $191.84 billion by 2025 and $325.3 billion by 2030, with respective CAGRs of 10.2% and 11.1% respectively.

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