Our Users Can Just Consider Us As Their Pocket Money Alternative: Gaurav Jalan, Founder & CEO, mPokket
In an interview with BW Businessworld, Gaurav Jalan, Founder & CEO, mPokket, talks about the company and its goal
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What was the idea behind launching mPokket? What gaps were you trying to fill and have you succeeded?
The idea behind the inception of mPokket is simple: we wanted to address the need-gap when it comes to the credit woes of the otherwise unserved segment of college students. To put this into perspective, college students in developed countries can get credit cards and personal loans from banks as and when they need one, but this option is not available in India.
When a college student in India falls short of money and needs a small amount for a temporary period, they have no access to any formal sources of credit. Therefore, when in need, a student can only borrow from friends or ask their parents for more money. But these alternatives might not always work or be a preferred route in certain circumstances. This, precisely, is where mPokket comes in the picture. We strive to fill this gap by providing a college student their own pre-approved credit line via the mPokket app. Further, we provide credit instantly on convenient repayment terms. At present, we have more than 1.5 million registered users on our app and the numbers are growing rapidly. This indicates how mPokket is succeeding in meeting the needs and demands of its users and in empowering them.
What differentiates your offerings vis a vis your competition?
Our biggest differentiating factor is probably the fact that we do not push our users to take a loan. We do not force the ‘need’ for credit on them, portraying ourselves as the only way out. We are simply there whenever our users require instant money. Our users can just consider us as their pocket money alternative for that one recurring instance of emergency cash crunch!
Further, customer satisfaction is our priority at mPokket and we work extensively towards ensuring that our users are not facing any issues during both disbursement of credit as well as the repayment. We also have a team of trained customer care professionals at the disposal of our users whenever they need help. Through such facilities, mPokket strives for an enhanced user experience at each part of the customer journey.
Is mPokket lender or a marketplace? How do you manage default risk among what is essentially a high-risk segment?
Currently, mPokket does not have a NBFC license. We partner with NBFCs who provide the loans to our users. Risk is inherent in lending, as there will always be borrowers who do not repay on time or at all. So, the business model has to be built around that, considering all the risk factors associated. However, it would be incorrect to say that college students are inherently a high-risk segment. Defaults can be reduced to a great extent with good underwriting that effectively screens the borrower base. In fact, our default rates at mPokket are significantly lower than those generally seen on unsecured loans.
What’s your average and ceiling disbursal amount?
Our loan offerings start from as low as INR 500 and can even go up to INR 20,000. The amount varies depending on our user’s need and on our proprietary algorithms like demographic, social, behavioural, financial, and transactional factors. The amount disbursed may also be impacted by factors such as whether the borrower is working to earn supplemental income, etc. The borrowing limit may also go up over time with thoughtful usage.
Lastly, what are a few of your business goals for the next two years?
At present, mPokket has succeeded in extending its reach to about 1% of the total college student population in India, addressing their urgent credit needs. Our goal over the next two years is to expand our reach to cater to over 10-20% of this segment. Additionally, we also plan to expand our product portfolio, extending support to the segment of young professionals as well. Since they are embarking upon their professional journey at this point and have no credit history, it becomes hard for them to avail loans through formal sources as well. Through mPokket, we plan to reach out to them by launching a loan product for career starters who have recently graduated from their respective colleges and got a job. Therefore, over the next two years, mPokket aims at expanding its reach in the segment of college students that it already caters to, and address the need-gap that exists for formal credit in the segment of young professionals as well.