Harsh Roongta, CEO, ApnaPaisa.com, is one of India’s foremost personal finance experts in this country. A Chartered Accountant, Mr Roongta joined ICICI in 1985 where he did stints in the leasing and investment banking departments. After successfully setting up ICICI’s retail lending business, he started ApnaLoan—a major distributor of credit cards and home loans in India—in 2000. In 2007, ApnaLoan metamorphosed into a new company called ApnaPaisa in 2007 which has become India’s leading online marketplace for financial products like loans and investments today. Mr Roongta has been a columnist in the leading Indian and international mainstream and business Indian newspapers, answers queries/advices viewers on personal finance related matters on mainstream channels like Star, Zee, CNN IBN, NDTV and is associated with many programs on business channels like CNBC, UTV Bloomberg, Zee Business, NDTV profit etc. He has also written a book ‘The Complete Home Loan Guide’.
ApnaPaisa Pvt Ltd is India’s leading online market place for financial products like loans and investments which empowers consumers to take informed decisions by providing a comprehensive comparison facility thus simplifying their research process. Consumers save substantial time and money by using ApnaPaisa's comparison engine for a wide range of products like home loans, personal loans, car loans, education loans, credit cards and investment products.
Speaking to Dolly Mirchandani of IIFL, Harsh Roongta says, “Financial planning is a bigger decision and the fees are reasonable.”
Indians usually don’t prefer to go to a financial planner and pay a fee. Many of them still think financial planning means to save and invest more and stop unnecessary expenses. Will this attitude change?
Financial planning is has recently started in India. But people have started realizing the importance of it and the need of financial planners to meet their financial goals. Financial planning is necessary to make sure that you are investing in a planned way to lead a comfortable retired life, to beat inflation and meet other requirements such as children’s education and their marriage.
Many a times, we come across clients who don’t know what they want. They have money and earn well but they don’t know which financial product is good for them or where to invest their money. At this point, a financial planner, who has accurate information about the products and client’s needs, gains importance. So definitely, we see the attitude of people changing and they are seeking the help of financial planners.
How does ApnaPaisa service people?
At ApnaPaisa, we help consumers take informed decision related to their investments and financial goals. Through our website, we provide them information about different types of financial products such as insurance, home loans, gold loans, fixed deposits (FDs), credit cards, etc. Our website aims to provide competing offers from the market to customers that will help them meet their specific needs. The information provided on the website is mentioned in simple English and user-friendly language.
Consumers save time as they don’t have to search multiple websites of various financial institutions and banks for product features and price comparison. Our website is regularly updated and provides pricing and feature information of almost all financial products.
After going through our website, customers call or email us if they need to apply for a loan or buy an insurance policy. We verify their information, like their phone numbers, address details and income levels, to make sure that they are genuine and then forward it to the financial institutions.
We take care of the privacy of customers’ information and it remains confidential with us.
So do you help customers in getting a loan from the bank?
We don’t co-ordinate between the customers and the financial institutions. Our job is to help them take informed decision. We guide them for what they need or what they are looking for. For instance, we let them know how much loan they are eligible for, which banks can lend them and what are their interest rates and finally how can they get their loan quickly.
Do you help them negotiate for interest rates for loans?
We don’t help them negotiate for interest rates for loans but we guide them get the best loan deals in terms of interest rates by comparing market multiple offers. Here, they can save a lot of money by just getting a loan at low interest rates.
Do you charge customers for providing this service?
No, we don’t charge our customers for this service. Our revenue comes mainly from referrals to various banks, housing finance companies and insurers across the country. This is our main business also called lead generation business. About 70% of our revenues come from our lead business, while remaining 30% from advertisements.
On an average how many visitors visit ApnaPaisa.com?
We have around 1.5 million people who visit our website every month. Over 50,000 people enquire about the different types of financial products.
What are the common mistakes people make when making investments?
As said earlier, many times people don’t know what they want to buy or what they are looking for. They have money and want to invest but lack knowledge of about financial products or what is good for them. For instance: Someone, who has a family that is financially dependent on them, needs to buy an adequate life insurance policy as a life insurance policy would secure their family’s financial future in case of an untimely death of the primary earner of the family.
However, if there is already adequate financial protection available for your dependents and your primary need is long-term savings for capital appreciation, then available options under savings-oriented plans should be considered.
Investors are often confused between putting money in a bank FD and investing in a mutual fund. Those who have invested money in MFs have mostly seen the NAV dip and this has discouraged them from making further investments in MFs. What should be the strategy here?
FMPs (fixed maturity plans) probably offer good post-tax returns than bank FDs for most classes of investors. They are debt-oriented instruments like FDs but could be theoretically riskier.
Both FMPs and bank FDs are close-ended products and have a definite maturity period. For example, FDs have maturity period ranging from six months to five years. Similarly, FMPs have a definite end date that could range from a month to a few years.
FMPs typically offer an ‘expected’ rate of return, while bank FDs have a ‘fixed’ rate of return. Unlike a bank FD, the rate of return promised by a mutual fund for an FMP is not guaranteed, but is typically close to the targeted return.
In the current scenario, it is difficult to say whether investors should invest their money in bank FD or FMPs, as each investors risk appetite and financial goals are different. So, you cannot give a standard advice that all investors should invest in bank FDs looking at the current market situation. Each investor’s case is different hence their investment strategy differs depending on their financial goals.
In the present circumstances what kind of asset allocation would you advise?
As mentioned earlier, it is difficult to give a standard advice as everybody’s requirement is different. If you are not well, you just can’t take an aspirin tablet and think that it will treat your illness. You need to go to your doctor who diagnoses you and gives the right prescription.
Similarly, some investors may have a high-risk appetite and can invest more in equity, while some may be conservative and do not want to take risk. They would prefer to invest more in debt instruments. Again age of the investor matters. Recommendations for a youngster would be different from what you would suggest to a person in his early 40s who is planning to send his children abroad for education.
At the same time, advice for senior citizens may vary. We can’t recommend them to invest more in equity. Hence, it is almost impossible to give a standard solution to everyone.
What kind of service do you offer senior citizens?
We do have senior citizens as our clients. We generally advice them on estate planning and Wills.
What are the top things people should keep in mind before buying a home?
Home is a place where you want to stay in. It is a one-time investment for which you need to have sufficient savings. Of course, you can take a loan to buy a home. But before that you need to make the down payment of your home—that is 20%-30% of the home value.
The balance amount can be taken as loan from a bank depending upon how much loan you are eligible for. You also need to decide the type of interest rate -fixed or floating interest rate - you want to pay to the bank and what are the competitive interest rates available so that you can get the best deal.
Loan is just a means to meet your final end i.e. home. The right time to take loan is when you are committed to stay in a city. You have sufficient investment to make the down payment, enough income to pay your EMI (equated monthly installments) on time. Once all these factors are in place you can plan to buy your home.
Tell us something more about your financial planning business
Our financial planning business is relatively new. Here we charge our customers a reasonable fee annually for our service. Our team consists of eight members, which is a mix of CAs (Chartered Accountants) and CFPs (Certified Financial Planners). We aim to give personalized service to our clients. We provide them guidance over phone, by email, chat and face to face. We also have some NRI clients.
Financial planning is a bigger decision and the fee is reasonable. Through our financial plan our clients have saved lakhs of rupees. We assess their current situation and future needs, based on that prepare a financial plan and implement it. We constantly review and monitor their investments and goals.
Who are the key shareholders besides WestBridge Capital?
Apart from WestBridge, ApnaPaisa is backed by JAFCO Asia and me. JAFCO Asia is one of the leading brands in the venture capital industry in the Asia Pacific region.
Currently, JAFCO has registered entities in Singapore, Hong Kong, Taipei, Seoul, Beijing and Shanghai. Private equity firm WestBridge focuses on partnering for the long-term with market leading Indian companies. It has offices in Mauritius, California and Bengaluru.
How are you competing with other players in the market?
Financial planning is still at a nascent stage in India. In this situation, there is hardly any competition as the industry has just started. Our purpose is to provide comprehensive service to our customers. We give them honest feedback on the basis on the information provided by them.