Excerpts of the interview with Team FatakPay regarding challenges, possibilities, and future of fintech and virtual credit facilities in India.
1. FatakPay focuses mainly on providing credit to a large number of individuals in the way of small ticket credit facilities , which works using UPI and QR Code systems.
Being a relatively new company in the Indian fintech market, what makes FatakPay different from other businesses which offer similar services?
When compared to other fintech companies, FatakPay stands out because of its distinctive offering and particularly distinctive target market. It gives employees access to small credit limits during the month when they are short on cash to cover their regular expenses. Fatakpay is aimed at the real India, where most people make less than INR30K a month on average, don’t have access to a formal credit system, and depend on expensive moneylenders to get by. With a high engagement platform that meets all of these customers’ financial needs, Fatakpay aspires to be their partner in financial wellness.
2. For the last many decades, the Indian financial system, in general, has been operated and controlled by established commercial banks. Then NBFCs came into the picture and changed the entire game.
Now with the introduction of fintech companies and startups with huge funding available from the international market, What do you think are the possibilities of FatakPay in the Indian financial system?
By serving as the customers of Bharat’s go-to partner for all of their financial needs, FatakPay hopes to promote financial inclusion. It stands out from other fintech due to its unique approach of onboarding customers through their employer as well as its unique credit availability and payment functionality. Customers can use Fatakpay to access monthly revolving credit with options for UPI Transfers, bank transfers, bill payments, and more in addition to scan and pay.
A holistic financial wellness destination, FatakPay also offers a number of benefits, including free insurance coverage from ICICI Lombard and access to more than 150+ national brands and 2000+ hyperlocal merchants offering basic necessities like healthcare, essentials, and more. Customers can take advantage of discounts, offers, and rewards every month.
3. Outside cities and towns, in rural regions of the country, the instant credit market is mainly dominated by self-help groups and cooperative societies of various kinds.
How is FatakPay planning to gain the trust of borrowers in rural areas?
Although self-help organisations and cooperatives are a solution, there is still a problem with turning to them when the cost or interest is high. With a focus on the real Bharat, Fatakpay offers a fully digital workflow for credit access as well as the ability for users to manage and track their spending through an app. With the widespread use of smartphones, internet access, and digital payments, FatakPay is able to connect with customers in the last mile and become their go-to partner for all of their daily financial needs, regardless of where they are located.
4. According to the FatakPay website, financial products are specifically for low-income people who cannot afford the mid-month expenses.Â
What is the reason behind selecting this specific target group for your financial services, and how well do you think it is going to impact the finances of a low income individual?
The explanation was straightforward: Because of their low salaries and poor credit histories, this target group is the most in need of credit to cover daily expenses. Additionally, this market segment lacks significant savings, and any unanticipated expense (medical, household, educational, etc.) places the consumer under a lot of financial stress and forces them into a debt trap. In addition to almost free credit facilities, FatakPay works to partner with this market segment throughout their financial life cycle and provide them with all the support they need to achieve financial wellness. The monthly revolving credit line for Fatakpay helps them maintain day-to-day liquidity throughout the month and bridge the gap between one payday and the next. As the customer advances in their financial journey, Fatakpay is also able to provide larger EMI-based loans or savings and investment products.
5. According to FatakPay, how significant is access to instant credit in a post-pandemic economic situation?
Post COVID, banks and NBFCs cut loan distribution and as a result, NPAs rose. Lenders were forced to cut back on new loan disbursements and tighten risk controls as a result of rising inflation, unemployment, and consumers’ inability to pay back debts. On the other hand, this made getting credit for this section even harder at a time when it was really needed.
Fatakpay is working hard to aggressively address both of these issues and be available to the customer in their times of need as a result of the increased demand and decreased supply that make access to credit more important while highlighting the importance of financial discipline in times of crisis.
It is reasonable to assume that, if not after COVID, then at the very least during the pandemic, digital lending will see an increase.
6. Has the pandemic in any way affected how people look up to Fintech firms in India?
Many different fintechs now have more opportunities due to COVID-19. For instance, the use of digital financial services and e-commerce has significantly increased as a result of social distance becoming widely accepted throughout the world. With greater adoption of digital payments, digitization has been significantly accelerated across the nation.
In order to address the crisis, a sizable number of financial technology firms have sprung into action. Through a simple onboarding process, quicker loan disbursals, and a larger customer base than traditional lenders, these new-age lending platforms assist in extending credit to borrowers.
Collaborations between conventional and contemporary lending platforms have aided in broadening financial inclusion in the nation. Recent government programmes have also contributed to the sector’s expansion. The widespread use of digital lending is due to the low cost of the internet. Digital lending has made significant progress in recent years, with customers now able to apply for loans with just one tap on their smartphones. Growing industry participation indicates future expansion.
7. By 2030, India will add 140 Mn middle-income and 21 Mn high-income households. What are the long-term objectives of FatakPay, and how do you plan to achieve them?
The long-term objectives of Fatakpay are to improve financial inclusion by giving everyone quick and simple access to credit, and in the process, to become their partner in financial wellness throughout the customer lifecycle.
The expanding target market in the upcoming years will give fatakpay’s initiatives more momentum and uphold its core values to keep providing opportunities to those without access to a formal credit system. Through our monthly credit line, we will continue to give our top priority to Real India (those with average monthly incomes below Rs. 30K), assisting them in getting from one pay period to the next. By providing a full range of financial products, such as credit, savings, micro mutual funds, and micro insurance as they advance in their careers, we also hope to serve as the segment’s financial support system. Most importantly, Fatakpay will make it possible for them to access the formal financial ecosystem and build credit scores, both of which would otherwise be very challenging for them.
8. Other than instant credit, what are the other fintech products offered by FatakPay?
The only base product offered by FatakPay is monthly revolving credit lines. Along with free insurance, a sizable rewards and offers programme, it also offers a variety of services like utility bill payments, UPI-based scan and pay, bank transfers, etc. to its customers. As it deepens its engagement with the customer it will provide higher ticket size EMI based loans, personal loans, 2-wheeler / affordable housing finance, micro-insurance and micro – investment products to be able to cater to all their financial needs.
