CASHe attempts to deal with the problem of restricted credit access with its opportunity credit rating machine developed in-house
To help millennials in Tier 2 and Tier three cities, the fintech startup invests in financial literacy and attention drives
Marketing automation company WebEngage enables CASHe discover new opportunities to boom its product stickiness and retention fee
cft & WebEngage present — “Decoding Hypergrowth” — a sequence capturing tales of successful groups, the importance of sensible engagement, and their method to developing the equal.
Financial inclusion, one of the key parameters indicating a country’s financial sustainability, has come a protracted manner in India. Compared to 2011, when 35% of the Indian populace had get admission to to formal banking and held bank accounts, the trendy facts from the World Bank’s Global Findex document shows that the range of account holders has reached eighty%. But owning a financial institution account is only a unmarried metric, and it's far unrealistic to anticipate that one such parameter or maybe some of them can reveal the genuine state of the large and varied landscape of economic services. For instance, one of the urgent problems is credit inclusion, where India still fares poorly.
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Despite the sizeable availability of cell and digital banking across the country, a big bite of the Indian population does not have get entry to to formal credit score. As the majority do now not personal residences or big property to put up as collateral for ‘secured’ loans, they fail to get assistance from financial institutions. In truth, in step with a World Bank document, less than 10% of the Indian populace have get entry to to formal credit. (Of course, there are unsecured loans with out collateral, but few ought to raise it, given the stringent due diligence of the organised region and the general loss of economic footprint inside the atmosphere that makes people eligible for those loans.) All these prompt human beings to searching for assist from the unorganised quarter and non-institutional assets, compelling them to pay sky-excessive hobby costs. Eventually, they fall into the debt trap.
Given this situation, economic inclusion stays a complex topic even these days. However, numerous fintech startups are developing with a slew of digital lending answers to cope with this issue. Understandably, every organisation has its unique selling factor and works on a specific aspect of the problem. The attention areas vary a lot. It may be the loan quantity (from small-ticket to huge-price tag lending) or the tenure (various from 15 to a hundred and eighty days) or specific demographics or every other pain point that wishes decision.
One of the virtual lending startups completely focussing on credit score get right of entry to is CASHe. Set up in 2016, the Mumbai-based fintech enterprise aimed to create an opportunity to present credit structures in order that people excluded from conventional sources can get entry to credit.
“We wished an answer that gave a fresh attitude to the lending enterprise. Hence, CASHe became launched with a clear cause to offer India’s urban running millennials with a path to higher monetary fitness with the aid of generation thru their smartphones,” says Riddhi Chakrabarty, Chief Growth Officer, CASHe.
When Social Lending Quotient Replaces CIBIL Score
CASHe presents brief-term personal loans (unsecured, similar to the banks’ personal loans), ranging from INR 7K to three Lakh, for a duration of 2-365 days. But there is a fundamental difference. Instead of the use of the CIBIL (Credit Information Bureau India Ltd) rating to measure a prospective borrower’s loan eligibility, the startup has evolved its own credit score rating gadget. CASHe calls it the Social Lending Quotient (SLQ). Simply placed, it's far a credit score evaluation framework/engine that makes use of AI-primarily based algorithms (huge statistics and system getting to know are the key additives right here) to evaluate traditional inputs and a person’s digital footprint to degree his/her creditworthiness.
The SLQ differs from conventional credit score scores because it measures a borrower’s propensity to pay off primarily based on present day information as opposed to ancient monetary behaviour. It is a complete device that elements in more than one elements of an character’s financial behaviour to decide the credit score. As a result, even an character without a credit records can get an inexpensive credit score line in this platform.
According to Chakrabarty, building the machine became now not an smooth project because it required heavy studies and multiple experiments with the algorithm to get it proper. As the fulfillment of the platform absolutely depends on SLQ scores, the crew spent a long time building and perfecting the engine.
The company has kept the hobby price at 2.75% a month, which is same to or decrease than the interest charged by way of most traditional lending organizations.
CASHe ordinarily target Gen Y or the millennials, the ones elderly between 22 and 38. It also seems at younger specialists from Tier 2 and Tier three cities as they're basically new to the credit machine and may not be capable of get right of entry to formal credit score. However, this demographic is regularly credit score-averse and lacks the level of tech literacy required to apprehend the platform’s nitty-gritty.
Therefore, to increase its user base, CASHe initially had to redevelop the complete credit score engine to deal with different models and assess their creditworthiness. The startup additionally invested in those clients’ economic literacy and cognizance as part of a long-time period plan to show them into repeat clients.
Watch CASHe’s Chief Growth Officer, Riddhi Chakrabarty, Talk About The Startup’s Journey And Growth:
How Marketing Automation Helped In CASHe’s Upward Journey
Like most fintech companies, CASHe had to address a challenging 12 months in 2020. Although it turned into operational during Covid-induced lockdowns, the enterprise had to noticeably cut down credit disbursals and restrict the range of customers. It caused a fall in daily disbursals, and the startup’s purchaser acquisition took successful. In the quick term, CASHe had to reduce down its new loan approvals via 50%.
In spite of the setback in the quick time period, the business enterprise knew it would need to fast get returned to its complete operational capacity as quickly as the lockdowns were comfy. To make this take place, it had to rely upon its advertising automation accomplice WebEngage.
Chakrabarty explains how WebEngage, a marketing automation enabler that facilitates organizations concentrated on the B2C section, provided critical guide in 3 key regions — decreasing the quantity of drop-offs within the consumer adventure, increasing funnel conversion, and reactivating dormant customers. WebEngage enabled the startup to reach out to its customers with customized communication through multiple channels. And this nurturing and hand-keeping had been duly contemplated inside the purchaser retention price.
Marketing automation is now not a unique concept for tech-savvy startups and other businesses due to the blessings this techno-enterprise model gives as compared to the conventional advertising techniques. According to a studies by Nucleus, a platform specialising in ROI case studies, advertising automation improves commercial enterprise productiveness by using a median of 20%.
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“For us, WebEngage saves the time required for execution, which may be successfully used at the product. It enables force higher ROI and also allows with scalability in quantified measures. Early-level startups can particularly gain from advertising automation,” says Chakrabarty.
As of now, CASHe’s overall credit score disbursal stands at INR 2,100 Cr, and the organization is progressively developing its credit lending capability. It clocked a revenue of INR 4.5 Cr in FY2018-19, recording regular upward increase.
The startup has ambitious plans because it wants to perform globally and input new sectors to increase its bouquet of lending services. The first global destination is Sri Lanka, where its operations are already in motion. CASHe is also eyeing Bangladesh as its next commercial enterprise stop and plans to cater to the MSME region in the coming days.
Although 1,263 lending startups are presently running in India, Chakrabarty isn't always too concerned approximately competition. He says that digital lending is a big area wherein multiple startups can efficaciously perform in the event that they stay devoted to their USPs and cater to their target clients. Moreover, with era being the important thing differentiator these days, it all boils right down to proper implementation and its final results. As CASHe offers a completely unique product built on tech-based due diligence, the fintech startup will manage to seize the market proportion it is after, he adds.