Redefining Credit Rating for SMB Loans

Can we have a one click checkout for all e-commerce transactions? We want to reach that next frontier of user convenience.
Gaurang Sanghvi, CEO, Instakash

Lack of innovation on the financial services front led Gaurang Sanghvi to set up Instakash, a Non-Banking Financial Company (NBFC) committed to offering loans to people with low or no credit scores.

Gaurang decided to launch a mobile data analytics organization that applies Artificial Intelligence and Machine Learning to create new financial products. Focused on consumers and Small and Medium Businesses (SMBs), the company is simplifying financial access for the next generation of users.

I felt there weren’t too many financial products in India and barely any innovation on the customer side. Financial institutions, I realized, were not looking at the user experience. Finance is not about capital only, Gaurang adds.

Instakash is offering loans to those in need, and also creating credit scores of its own based on the online activities of users including payment of utility bills, e-commerce purchases and social-media behavior.

The company has explored other relevant forms of data including a user’s banking history, behavior, social graph, background, etc. We said let’s create different risk models based on alternate data points and change the way consumers and businesses view loans. What we are doing is simplifying and automating the processing of loans approval by assessing at least 100 data points, Gaurang states.

Today, Instakash is trying to create a match between what banks are offering and what consumers want. The company is in discussions with some of the big banks to make online lending a normal procedure. Instakash’s lending meanwhile, is a totally on-line, end-to-end process.

Speaking about the challenges that Instakash faces, Gaurang says they include collecting and authenticating data. It is difficult to collect the right data points seamlessly and within a short time. Our USP is that we have the data points and are building credit models for them. This is what differentiates us and enables us to do lending at scale.

Another challenge for the company is working with the banks as getting them on board at scale remains a problem.

In Gaurang’s view is that in order to survive and thrive, every start-up needs to think mobile first and acquire good mentors. Finally, companies need to be at it continuously, even if everyone says ‘No’! he advises. 

Commenting on the role that NASSCOM has been playing to catalyze the start-up revolution, Gaurang  says the association is creating a unique eco-system that is not even seen globally. It has become a true evangelist for start-ups and is connecting these companies with the government and industry. This is the need of the hour, he says.

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