Excerpts from the interview with Team FatakPay regarding the challenges, opportunities and future of fintech and virtual credit facilities in India.
1. FatakPay mainly focuses on extending credit to a large number of people in the form of small credit facilities, which work using UPI and QR Code systems.
As a relatively new company in the Indian fintech market, what makes FatakPay different from other companies that offer similar services?
Compared to other fintech companies, FatakPay stands out for its distinctive offer and its particularly distinctive target market. It gives employees access to small credit limits during the month when they run out of cash to cover regular expenses. Fatakpay caters to the real India, where most people earn less than $30,000 a month on average, don’t have access to a formal credit system, and rely on expensive lenders to get by. With a high-engagement platform that meets all of these customers’ financial needs, Fatakpay aspires to be their partner in financial well-being.
2. Over the past few decades, the Indian financial system, in general, has been operated and controlled by well-established commercial banks. Then NBFC came on the scene and changed the whole game.
Now, with the introduction of fintech companies and startups with huge funding available in the international market, what do you see as opportunities for FatakPay in the Indian financial system?
By serving as customers of Bharat’s go-to partner for all their financial needs, FatakPay hopes to promote financial inclusion. It stands out from other fintechs with its unique approach to 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 over 150 national brands and over 2,000 hyperlocal merchants offering products basic necessities such as health care, basic necessities, etc. Customers can enjoy discounts, offers and rewards every month.
3. Outside cities and towns, in the rural parts of the country, the instant credit market is mainly dominated by self-help groups and cooperative societies of all kinds.
How does FatakPay plan to gain the trust of borrowers in rural areas?
Although self-help organizations and cooperatives are a solution, it remains problematic to turn to them when the cost or interest is high. With a focus on real Bharat, Fatakpay offers a fully digital workflow for accessing credit 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 their day-to-day financial needs, no matter what. or where they are.
4. According to the FatakPay website, the financial products are specifically for low-income people who cannot afford the mid-month expenses.
What is the reason for selecting this specific target group for your financial services, and how do you think this will impact the finances of a low-income person?
The explanation was simple: due to their low salaries and bad credit history, this target group is the one who needs the most credit to cover their daily expenses. In addition, this market segment lacks significant savings and any unforeseen expense (medical, household, school, etc.) places the consumer in significant financial stress and forces him into the debt trap. In addition to nearly free credit facilities, FatakPay partners with this market segment throughout their financial lifecycle and provides them with all the support they need to achieve financial well-being. Fatakpay’s Monthly Revolving Line of Credit helps them maintain day-to-day cash throughout the month and bridge the gap between one payday and the next. As the customer progresses through their financial journey, Fatakpay is also able to provide loans or larger savings and investment products based on EMI.
5. According to FatakPay, how important is access to instant credit in a post-pandemic economic situation?
Post-COVID, banks and NBFCs reduced loan distribution and as a result NPAs increased. Lenders have been forced to cut new loan disbursements and tighten risk controls due to rising inflation, unemployment and consumers’ inability to repay debt. On the other hand, it made it even more difficult to get credit for this section at a time when it was really needed.
Fatakpay is working hard to aggressively address these two issues and be available to the customer when needed due to increased demand and decreased supply that makes access to credit more important while stressing the importance of financial discipline in times of crisis. .
It is reasonable to assume that, if not after COVID, at least during the pandemic, digital lending will see an increase.
6. Has the pandemic in any way affected the way people turn to Fintech businesses in India?
Many different fintechs now have more opportunities thanks to COVID-19. For example, the use of digital financial services and e-commerce has increased dramatically as social distancing has become widely accepted around the world. With greater adoption of digital payments, digitalization has accelerated dramatically across the country.
In order to weather the crisis, a significant number of fintech companies have swung into action. With a simple onboarding process, faster loan disbursements, and a wider customer base than traditional lenders, these new-era lending platforms are helping to extend credit to borrowers.
Collaborations between conventional and contemporary lending platforms have helped expand financial inclusion in the country. Recent government programs have also contributed to the expansion of the sector. 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 click on their smartphone. Growing industry participation indicates future expansion.
7. By 2030, India will add 140 million middle-income households and 21 million high-income households. What are FatakPay’s long-term goals and how do you plan to achieve them?
Fatakpay’s long-term goals are to improve financial inclusion by giving everyone quick and easy access to credit and, in doing so, to become their partner in financial well-being throughout the life cycle of the customer.
The expansion of the target market in the coming years will give more momentum to fatakpay’s initiatives and maintain its core values to continue to provide opportunities for those who do not have access to a formal credit system. Through our monthly line of credit, we will continue to give our top priority to Real India (those with an average monthly income below Rs. 30K), helping them transition from one pay period to the next. By offering a full range of financial products, such as credit, savings, micro-mutual funds and micro-insurance as they progress in their careers, we also hope to serve as a financial support of the segment. More importantly, Fatakpay will allow them to access the formal financial ecosystem and establish credit scores, which would otherwise be very difficult for them.
8. Besides instant credit, what other fintech products does FatakPay offer?
The only basic product offered by FatakPay is the monthly revolving line of credit. In addition to free insurance, a large rewards program and offers, it also offers a variety of services such as utility bill payment, UPI-based scanning and payment, wire transfers banking, etc. to its customers. As it deepens its engagement with the customer, it will provide EMI-based loans, personal loans, 2-wheeler/affordable housing finance, micro-insurance and micro-investment products to power meet all their financial needs.