Monish Anand | Shubh Loans | Start Up Story | The IndianPreneur
Name:Monish Anand
Company:Shubh Loans
A simple research into India’s lending system brings to light the prevalence of archaic and traditional assessment methods to judge the creditworthiness of an individual. The current credit system, with its severe drawbacks, is keeping millions of loan seekers from getting their applications approved. What is worse: A large number of Indians are applying for loans to meet their emergency financial needs including education, medical and others. Until now, loan applicants did not have an easy mechanism to assess their application approval chances. While this problem is recognized by all, not many have chosen to address it. Monish Anand, Founder & CEO of Shubh Loans, with his experience of over 20 years in both technology and banking helped him think through a viable solution. His brainchild – Shubh Loans, which happens to be India’s leading mobile lending platform, is already making the loan process simpler and more transparent for people in India.
Monish’s understanding of the lending sector and of technological advancements can be traced back to his stint at national and international organizations such as Citigroup, Standard Chartered Bank, Infosys and British Telecom. Such roles gave him exposure to consumer lending as well as banking technology. He also founded a BFSI focused BPO in Bangalore, with an employee strength of 650 people.
Monish realized that millions of people have been left out of the purview of formal lending due to lack of relevant data points. It was his desire to change this scenario and find a way to financially include the underserved and unserved segments in India. His effort is being recognised across industries and also earned him the Ashoka Fellowship in 2017. Monish felt that with the proper adoption of technology a large national problem could be put to rest. With this intention, he founded Datasigns Technologies that launched its innovative mobile lending platform – Shubh Loans.
Based out of Bangalore, Shubh Loans is a vernacular app that is helping a growing number of salaried employees (starting from 12K) in getting a loan of up to 5 Lacs with a long-term (up to 4 years) EMI tenure. The smart credit model deviates from the traditional model (where the individual’s repayment capacity is the sole criteria), and replaces it with the Shubh Loans credit model (which analyzes repayment capacity as well as intention-to-pay of an individual). The traditional credit scoring method keeps 80% of India’s populace from getting loans. Shubh Loans brings a new approach to credit score reports by helping the applicants understand their credit standing holistically and take better financial decisions!
Links
Website: https://www.shubhloans.com/
Facebook: https://www.facebook.com/ShubhLoansApp/
LinkedIn: https://www.linkedin.com/company/shubhloans/
1.What gets you out of bed in the morning?
The nightmare of getting stuck in Bangalore traffic!
2.Why should people choose your product/service?
The target market of Shubh Loans is the next billion – people with an annual household income between INR 1.4 Lacs and 4.5 Lacs. This segment is largely ignored by traditional lenders, leaving them with the only option of borrowing from the loan mafia. The loan mafia charges high rate of interest which often leads people into delinquent cycles. Shubh Loans is a compelling alternative to loan sharks.
Shubh Loans is also enabling people to adopt healthier financial habits by giving insights into an individual’s credit profile and providing financial tips via Shubh Loans Credit Report. The Shubh Loans app is available in vernacular languages – English, Hindi, Tamil, Telugu, Kannada and Marathi – making it easier for people to understand their credit report and apply for a loan.
3.What inspired you to start Shubh Loans?
23 years of experience in banking, technology and telecom gave me a unique perspective towards lending and also enabled me in directing my desire to create a larger impact in this space.
Access to credit is essential for every individual. With lack of formal lending to the blue/ grey collar segment, the informal channel is flourishing. The interest rates start at 4-5% a month and go up without any limit. The perils of borrowing from this channel are harrowing. From debit cards being used as collateral to the harassment from the lenders, the borrowers are led into a spiral from which they can never recover. Banks and NBFCs wouldn’t even touch this segment.
More than a Eureka moment, Shubh Loans was waiting for the opportune market time.
Fintech companies like Shubh Loans are harnessing and optimizing the power of mobile phones to enable credit to all. Strong governmental support for financial inclusion, the introduction of India Stack, increasing Aadhaar adoption, and expanding digital footprint has made the environment more conducive than ever before.
4.How much capital do you have and when do we expect cash flow break even?
Shubh Loans is a tightly run, capital efficient business. We have eschewed raising a large amount of money early on in our journey. Shubh Loans raised $1.6 million Pre-Series A funding in 2017 from SRI Capital, Bee next and Pravega. Prior to this, the company raised an undisclosed amount of angel funding from V. Bunty Bohra (Managing Director and India CEO of Goldman Sachs), Sanjai Vohra (former MD of JP Morgan) and Peeyush Misra (Ex-Partner and MD at Goldman Sachs). We are in advance discussion with some marque funds for our next round of funding.
The company is now raising Series A round of funding.
5.Who are the biggest competitors and how are they doing? If there are no competitors, why?
Our direct competitors are actually private money lenders who are operating at a grassroots level and charge exorbitant interest rates. Their way of lending is informal and unregulated. This further fuels the debt → borrow → debt cycle and has severely damaged the financial well being of families. For us, the solution was not only to provide friction-free credit but access to credit to our segment itself.
6.What comes first for you money or emotions?
Leading a company that is for-profit and is creating impact, all at the same time has taught me that money and emotions can go hand in hand. We need not choose one over the other.
7.Where do you see yourself in 5 years?
In 5 years, we hope to expand our reach across segments that people could not have imagined before – from domestic workers to Kirana store owners. The Shubh Loans Credit Score is accepted by all financial institutions to assess the risk profile of individuals.
8.If you had the opportunity to start this business again what would you do differently?
We seem to be hitting the right milestones. Even the mistakes that we made in the past have been a great source of learning for us. Without those learnings, we wouldn’t be here.
9.If you sold your company today, what would be the tone of the conversation? What would you want to gain? What would you want to avoid losing?
The question of selling the company does not arise since the larger goal is not met.
10.What advice would you give to someone starting out?
I will like to suggest two things:
– Build a great team
– Experiment a lot. Embrace your fear of failure.
