How credit startup Money View grew fourfold in one year and became profitable

In 2014, Puneet Agarwal and Sanjay Aggarwal launched View of money as a personal financial management solution for its customers. The idea was to educate people and introduce some financial discipline into their lives.

Over time, the founders saw greater opportunity in lending and in 2016, the Bengaluru-based startup shifted to offering credit to its customers as its core offering.

And successfully.

Last week, Money View reported that it had become profitable, but did not share the exact amount of profit. The startup reported an annualized revenue rate of Rs 600 crore ($80 million) for the financial year (FY) 2022.

“One of the key reasons for Money View’s growth and profitability is the strong risk management capabilities that allow us to serve a wide range of users across the income spectrum and desktop scores while maintaining a positive economy for our loans,” Puneet said in a statement.

Between March 2017 and March 2021, financial inclusion in India increased by 24%, according to a report by the Reserve Bank of India (RBI). But while 80% of Indians have a bank account and the use of digital payments is also increasing in the country, “For wider access to financial services, they still struggle,” Puneet said. Your story.

More importantly, very few have access to formal credit.

“It’s hard for them [customers] to get a credit card, access unsecured loans and create insurance products or wealth management solutions,” he adds.

The 2021 Financial Inclusion Index, a quantifier introduced by the RBI to measure financial inclusion – on factors such as ease of access, extent of use, inequality and lack of services , the extent of financial literacy and consumer protection – was at 53.9 out of 100 for India.

“What we’re trying to do is build a platform that gives access to world-class financial products to anyone who has a smartphone,” Puneet says.

What it offers

Money View is one of about a thousand startups offering credit products to customers, such as instant personal loans, cards, BNPL (buy now, pay later) and personal financial management solutions for people who have bank accounts and access to smartphones.

“He’s the everyday Indian. The large middle class is basically our target segment,” says Puneet.

The startup aims to reach beyond the top 10% of the country’s economy class. And to do this, it has partnered with more than 15 financial institutions.

On the Money View app, a customer can fill out an application, with details such as their credit score, income and age, and check their eligibility for a loan in minutes.

They can then select the repayment term, upload the necessary documents to complete their KYC (Know Your Customer) process and verify their income, and the borrowed amount is paid into their bank account within 24 hours.

Usually, a client needs to provide proof of identity, address and salary for salaried professionals while bank account statements suffice for self-employed users.

Money View app has more than 10 million downloads on Google Play Store. The startup claims it gets more than 1 million downloads each month, and reaches over 200 million total underserved customers who are often ignored by banks and other formal financial institutions.

The platform supports eight languages, including Gujarati, Bengali, Tamil and Telugu, which allow it to cover a wide range of customers, 75% of which are from Tier II and III areas.

Money View derives its revenue from sharing agreements with its lending partners and bears the cost of acquiring and serving customers. In case a customer is unable to repay the loan, this is reflected as a default in the books of the lender and also in the credit rating of the customer.

Solve the credit problem with technology

Although a lack of credit history is a factor that makes it difficult for this segment of users to qualify for loans, Money View solves this challenge with its “proprietary technology-based underwriting capability,” says Puneet.

Money View collects anywhere between 100 and 1000 data points from the information it receives from users and their actions. It then uses artificial intelligence and machine learning to better understand the risk profile by drilling down into credit and other data provided by users during the application process.

“We create a personalized product for the user based on risk assessment and affordability,” Puneet explains.

This works well for Money View because its low-income customers can benefit from smaller loans instead of having no loans at all. Loans can be as low as Rs 5,000 and can go up to Rs 5 lakh. The startup charges an annual interest rate of 16-39% for a term of 3 months to 5 years.

“Our cost structure is very low. So even for a small loan of tickets, we can approve users. Most other banks cannot allow users to take out very small loans because their cost structure is very, very high,” he explains.

Moreover, banks also prefer to lend to low-risk customers.

Growth and projects

Over the past year, Money View has grown 4x year over year in credit disbursements. The startup claims to disburse loans at an annualized rate of $850 million. Puneet says that number is increasing by 15-20% each month.

Earlier this year, Money View raised $75 million in a Series D funding round from Tiger Global, Winter Capital, Evolvence India and Accel, as well as existing investors such as South Park Commons, Trusted Insight and Dream Incubator.

“The new funding will be used as growth capital to grow the core credit business, grow the team and expand its product portfolio with services such as digital bank accounts, insurance and wealth management solutions” , the startup said at the time.

Money View is now valued at $625 million and competes with CASHe, MoneyTap, KreditBee, and Lendingkart.

But the competition does not worry the team.

“India is such a big market, and it’s such an untapped market. There is room for several large companies to be there and co-exist,” says Puneet.

In fact, India’s consumer credit market is expected to grow at a faster rate than most of the world’s major economies, according to a report by Experian-Invest on India’s credit ecosystem. The report further adds that it grew at an average rate of 15.1% from March 2000 to March 2021.

Over the next year, Money View aims to reach $1 billion in assets under management. In terms of number of customers, it aims to increase tenfold over the next three years.

In the statement shared last week, Puneet had said, “We expect to end the financial year 2023 with over Rs 1,500 crore in revenue rates.”

Edited by Saheli Sen Gupta

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