Sunil Agarwal, Managing Director, Paisalo Digital Limited,
who possesses a rich experience of 29 years in the small finance business and holds the position of Managing Director of the Company since 1992. Paisalo is a leading Systemically Important Non-Deposit-taking NBFC registered with the Reserve Bank of India, in operation since 1992. His experience, efforts and active involvement in the business operations have ensured that SEIL has grown to be a listed, well-governed NBFC with footprints in rural and semi-urban areas in North and West India. The company offers loans in various ticket sizes ranging from Rs10,000 to Rs2cr as business loans, SME loans, and other income generating loans.
Other than individuals PAISALO also extends loans to corporates, partnership/proprietorship firms and aims to empower society with greater financial freedom by making lending affordable and convenient. The company’s main thrust is on small finance to ensure rural development, self-employment and women-empowerment. The small credit division offers loans from Rs15,000 to Rs1,00,000 through the individual lending model providing unsecured loans to individual entrepreneurs for agri and non-agri purposes and the group lending model provides unsecured loans to borrower groups for dairy, poultry, farming, handicrafts etc.
In an interaction with Shweta Papriwal, Editor, IIFL, Sunil Agarwal, Managing Director, Paisalo Digital Limited
said, “We are targeting anyone and everyone from any demographic who is willing and working to create an entrepreneurial opportunity for herself/ himself, and is in need of small loans to kick-start the process.”
What was the driving factor behind the concept of easy, simple and hassle-free loan?
The Finance needs of 125 crore people (Non-Income Tax Payers) is covered by only 6% Regulated Entities. Customers repeated visits to the banks, first for borrowing and then for re-payment along with slow and lengthy loan sanction process adds to borrowing cost. PAISALO App uses the Trio of Measures i.e. Jan Dhan, Aadhaar Card and Mobile (JAM Yojna) introduced by Honourable PM Narender Modi. Together with Artificial Intelligence, Machine Learning and current data analysis provide – Smart, Easy and Legally Eligible Loans to the customers. The loan that is Available, Aware and Affordable and directed directly into the customers Bank Account, along with Electronic Clearing House facility for ensuring repayment.
What is the maximum limit of borrowing with PAISALO?
Currently, maximum loan principal that can be borrowed is Rs. 50,000 and for 1 month, 3 months, 6 months, 12 months, 18 months or 24 months.
What kind of security is required against availing a loan from your company? What are the factors that you consider for loan application like credit score, etc.?
Since, the PAISALO App services the Small Loans Sector and is expanding in small loan sector only, the loans through the app are unsecured. We have an Internal Credit Algorithm that works to identify and check the Credential, Character and Credit Check (fetched through multiple bureaus and then data points available through PAISALO Digital Limited 27 years of industry experience are applied). PAISALO is High Tech and High Touch.
How are you creating awareness regarding your products?
PAISALO has yet to start the Digital Marketing Campaign, but the awareness has generally been through organic methods and very little advertising in print media, mainly for the announcement of the product in the states and change of name of the company.
Your existing customer base is skewed towards urban or rural? What is the income segment that you are targeting?
Our current customer base consists of mainly rural and semi-urban areas, we are also serving loans in certain remote areas through our network of Customer Service Points.
We are targeting anyone and everyone from any demographic who is willing and working to create an entrepreneurial opportunity for herself/ himself, and is in need of small loans to kick-start the process, that is, we through PAISALO App are willing to serve anyone with a loan for Income Generation Purposes.
How do you tackle the issues relating to defaults or late re-payments?
KYC (Know Your Customer) process gets authenticated through GoI (Government of India). Aadhar database and documents digitally get signed. All disbursements of a loan are routed through the Bank Account of the borrower and installments collection is done through eNACH (National Automated Clearing House) mechanism. We have a strong recovery backend, which helps us to keep our defaults in check.
What is the ratio of timely re-payments to defaults/ late re-payments?
Currently, the delinquency rate stands at 2% of the entire loan portfolio.
In which geographies do you have maximum presence? What are your plans for expanding your footprints and reach?
Currently, we are serving loans in 7 states, Haryana, Uttar Pradesh, Maharashtra, Gujarat, Rajasthan, Delhi, Uttarakhand. And we are in the planning stage of going Pan India in the next 16 quarters.