scorecardresearchLenders must focus on educating borrowers on disciplined credit behaviour,

Lenders must focus on educating borrowers on disciplined credit behaviour, says Anil Pinapala of Vivifi India Finance

Updated: 03 Apr 2023, 09:09 AM IST
TL;DR.

In an interview with MintGenie, Vivifi India Finance’s Anil Pinapala shared how most payment solutions are focused on making transactions simpler and faster.

Anil Pinapala, CEO and Founder, Vivifi India Finance

Anil Pinapala, CEO and Founder, Vivifi India Finance

Despite the expanding Indian consumer market, a sizable portion of the population still struggles to obtain credit. According to Anil Pinapala, CEO and Founder, Vivifi India Finance, lenders must focus on educating borrowers on disciplined credit behaviour.

In an interview with MintGenie, Pinapala said that consumer credit in a credit card format should be made available and as most Indians are not credit-hungry but just credit-starved.

Edited Excerpts:

Q. What are the most common reasons borrowers cite while seeking loans?

They seek loans for emergencies/school fees/building credit profiles/medical expenses/purchasing consumer products, etc.

Q. Credit availability to customers has increased, thanks to the rise of lending companies in India. Do you think this will turn the coming generation credit hungry compared to millennials?

Currently, the market's financial products primarily cater to prime customers, leaving over 300 million credit-deprived individuals in India's subprime and non-prime segments outside the formal credit network. Digital lending companies recognised the need to make credit available to these unserved and underserved customers and successfully onboarded a small percentage of them into the credit ecosystem. Despite the expanding Indian consumer market, a sizable portion of the population still struggles to obtain credit.

To address this issue, lenders should focus on educating borrowers on disciplined credit behaviour and the positive impact of regular repayments on their future creditworthiness. Furthermore, the needs and expectations of current and future generations will play a crucial role in shaping superior financial products.

In a developing country like India, I believe that consumer credit in a credit card format should be made available and as most Indians are not credit-hungry but just credit-starved.

Q. How do you customize loan products for interested customers?

While payment solutions have been focused on making transactions simpler and faster, we have focused on increasing the user base for digital payments when the users are out of cash. FlexPay offers on-demand credit.

The customer requires one-time approval to avail of credit for a lifetime. FlexPay is designed with a customer-centric approach and therefore flexibility is the most important service we offer. While the stressed customers we cater to may have a fixed income, their expenses vary and so does their cash requirement. Hence, FlexPay can allow them to select the repayment amount based on their cash flow and needs.

Whenever they need credit, it can be accessed upon prior approval irrespective of what the requirement may be. We would like to use our unique underwriting process to help borrowers generate income while also contributing to the economy as a whole by ensuring financial inclusion in the country. They can use FlexPay to make purchases at any store that accepts UPI payments by paying with credit.

Q. There is still a huge segment unable to take loans due to poor credit profiles. On what parameters do you decide whether to accept their loan applications?

Flexpay gives an instant credit line to individuals who are under-served or unserved owing to the barriers of their location, literacy, livelihood, or credit score but have the ability and intent to repay.

Our cutting-edge technology stack is micro-service driven and built with an understanding to provide credit access to the next 300 million people who may or may not be digitally savvy. It comprises a mobile-first application that supports multiple languages to help salaried or self-employed customers understand our service over video or voice in their native languages to be able to complete their application and allow us to evaluate them for credit.

It is powered by a sophisticated AI-ML-based underwriting and credit assessing system that enables real-time credit decisions and leverages a sophisticated payment infrastructure to make real-time payments. Python, .Net, etc. are among the plethora of technologies we utilise.

Q. Among the vast sea of online lenders in India, how do you stand out from your peers?

Our greatest strength is in underwriting unserved and underserved customers with incomes as low as 4000 per month, regardless of whether they work in formal or informal employment. That includes catering via mobile phones to customers who may be semiliterate or lack digital knowledge and belong to non-metro cities. Flexpay is India's first and only personal emergency line of credit that offers sachet-sized credit in a credit card-like structure.

The most remote users can experience credit card-like facilities and avail of EMI-free solutions for their offline and online purchases or needs. Our customers may require credit in small amounts for a short period and they may need it repeatedly.

There is not a single product in the market that caters to their credit needs. FlexPay is the only product that allows its customers to use their credit repeatedly without falling into a debt trap. It offers them the freedom and flexibility to repay their loan even after a day of sanction without levying any prepayment penalties. Our state-of-the-art technology enables us to identify customers, offer them credit and manage their transactions.

 

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First Published: 03 Apr 2023, 09:09 AM IST