While speaking with TechGraph, Gaurav Jalan, Founder & CEO of mPokket said, “Like other instant apps we do not restrict our services to a limited number of cities or colleges.”
Here is a full expect:
TechGraph: What makes mPokket different from other lenders who are already in this business?
Gaurav Jalan: To begin with, we are entirely focused on disbursing loans to college students and young salaried professionals, with an emphasis on those that are new to credit. There are very few other lenders focusing on these segments.
The bigger players cater to people with proper credit history with a minimum credit score. But mPokket lends to borrowers with almost no credit history or bureau score. Even if our borrowers have begun working barely two or three months ago, we will give them a loan.
Our second unique quality – we are entirely digital. One simply downloads our app. Only basic documents, our app, and a smartphone are needed. It’s a seamless, automatic process. If all the documents are in order, we approve their KYC quickly. Thereafter, we offer them instant personal loans in their bank account or digital wallet. Our ease of use sets us apart from other lenders in this space.
Unlike other instant loan apps, we do not restrict our services to a limited number of cities or colleges. Our borrowers can be resident in any city or village in India. We will offer them a loan as long as they can provide us with valid documentation.
To give you a broader perspective, we have more than 5 million registered users on our app and have already disbursed 11 million-plus loans to borrowers. In the current fiscal, we expect to disburse more than Rs1200 crores.
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TechGraph: What are the industry challenges you have observed that concerned you to jump into this space?
Gaurav Jalan: College students and new-to-credit salaried professionals often have temporary cash needs that exceed cash inflows. No organized credit product is available to these 50 million college students and 780 million adults.
They currently rely on friends and family for stop-gap credit due to lack of credit score, small borrowing needs, etc.
Even as a foreigner and a fresh college student in the USA in 1997, I could obtain a credit card. This allowed me to manage my finances better and overcome temporary cash shortfalls.
In contrast, speaking to college friends in India it was obvious that access to any sort of formal credit was not available to them and remains unavailable even today. When they needed money, the only option was borrowing from friends and family.
The idea behind establishing mPokket was to address this gap. I founded mPokket in 2016, with the vision to improve the lives of those requiring quick cash for urgent needs but lack access to credit cards or other means of formal borrowing.
The market potential is immense. Figures peg the opportunity at Rs30 billion-plus and Rs5 trillion-plus loan disbursals for student and new to credit salaried professionals. We have only scratched the surface since our penetration rates are as low as 0.3%.
TechGraph: Could you please shed light on the mPokket products portfolio?
Gaurav Jalan: Through our Instant Loan App, college students and young working professionals can avail of loans ranging from Rs 500 to Rs 20,000. The amount is instantly credited to their bank account or digital wallet. Borrowers can choose to repay the loan within three months with nominal interest. The user’s borrowing limit keeps increasing over time, based on multiple factors, including timely repayments.
The entire process is online. It usually takes 30 minutes from downloading the application to the loan disbursal – as long as the information provided by the user is correct.
TechGraph: Most of your customers are students and young working professionals. What is the reason behind this?
Gaurav Jalan: India is a young country with a large Gen Z and millennial population. Unlike earlier generations, they are far more independent and engaged. However, this generation needs to be enabled with the right tools and feel empowered in making certain decisions themselves.
Here, short-term finance from mPokket can help. Any urgent cash needs that students or young professionals have – ranging from taking an online course to buying a smartphone or even going out for a movie or a meal with friends – mPokket is always available to fulfill their needs instantly.
The idea is to help these new-to-credit students and young professionals fulfill their needs and at the same time build a credit history by offering small-value loans.
At mPokket, our goal is to increase financial inclusion by making fiscal services available to the underserved and new-to-credit population. Students and young working professionals can then become financially independent in the long run.
TechGraph: The past few months have been challenging for many businesses. How did you deal with collecting and disbursing loans during the pandemic?
Gaurav Jalan: Unlike many companies that decided to stop lending during this challenging period, at mPokket, we continued lending. We realized that it was particularly during the pandemic that many people needed the money as their source of cash or income had stopped or been interrupted for varied reasons.
Therefore, mPokket continued to lend but at reduced levels to balance our risks.
With regard to collections, given the stress on borrower cash flows, we deployed a calibrated case-by-case approach. We tried to understand where each borrower was and the precise situation they were in.
Accordingly, we attempted to find the best way for them to repay their loans and allowed deferment of payments where necessary, considering their current cash constraints.
TechGraph: What kind of growth has mPokket registered in the last six months?
Gaurav Jalan: We expect to disburse more than Rs.1200 crore in FY20-21, which will be a growth of >70% YoY. The growth rate in FY20-21 is subdued due to the impact of COVID. We expect to grow at significantly higher rates going forward.
TechGraph: Is there any plan to enter new verticals too?
Gaurav Jalan: Recently, mPokket has diversified its offerings by venturing into small-ticket loans for salaried individuals. We are also working on introducing more options for users such as pay via EMI checkout at popular shopping destinations. We are focusing on multiple initiatives to make students and young professionals more financially independent.
