The process of loan has seen its set of ups and downs in the industry in the past decades. With the developing fintech, the process of taking credit has grown to become an uncomplicated process with basic document requirements. The public has started to have faith in 3rd party loan providers and are steadily moving their financing preferences from banks to financial institutions providing better interest rates and credibility.
RevFin, founded by Sameer Aggarwal, is one such digital lending startup with its main objective being financial inclusion. The platform aims at providing loans to individuals irrespective of their education, geography, past credit performance, or language fluency. RevFin uses biometrics, psychometrics, and gamification as an alternative tobanking transactions and credit bureau data to make decisions.
How was the idea of RevFin formed?
Sameer Aggarwal, an alumnus of IIT Kharagpur, has worked in the consumer lending industry for 13 years and has spent his major professional life in the UK, with expertise in the field of credit risk management, analytics/data science, and lending product management. The ex-HSBC employee, while transitioning from a prime bank to a sub-prime lender in the UK, realized that the traditional methods of underwriting using the credit bureau and banking transaction data do not work on the sub-prime population. To create a method for digitally underwriting sub-prime customers, he experimented with many ideas like psychometrics, machine learning algorithms, and gamification.
During a holiday in India, he researched the consumer lending market of the country and realized that it had similarities with the sub-prime customer base in the UK, despite having a prime customer base in India. He then decided that a truly scalable lending platform must rely solely on data generated by a user through engagement with the lending platform. Thus the idea of biometrics, psychometrics, and gamification was born. Any user can create data specific to them during a loan application journey irrespective of where they are.
Hurdles
RevFin, launched in October 2018, provides loans to retail consumers for financing clean technologies through their iOS and Android apps. An example of clean-tech is electric rickshaw financing, which, by far, has been done in Haryana, Punjab, Rajasthan, Uttarakhand, Delhi, West Bengal, Uttar Pradesh, and Bihar. The firm uses two forms of ID documents for KYC. They apply a combination of psychometrics and biometrics for user authentication and assessing their intention to repay.
The biggest challenge faced by the firm was to teach an unenlightened Tier III citizen on how to apply for a loan through a smartphone app.
They have collaborated with multiple partners, including EV manufacturers, payments banks, insurance companies, and debt recovery agencies, a major one being a tie-up with PNB Metlife. The company has financed over 500 customers with no credit history within ten months of initiating its operations.
Sameer, in a statement, said,
“Our vision is to become the world’s most admired brand for Financial Inclusion. We would like to disburse Rs 3,000 crore in the Indian market with Return on Equity > 20%. At the same time, scale internationally to over 50 markets.”
