Poonawalla Fincorp Ties with KrazyBee To Enter Digital Consumption Loans Space

Poonawalla Fincorp Limited (Formerly Magma Fincorp Limited), has entered digital consumption loans space through a tie up with KrazyBee. Under this partnership Poonawalla Fincorp will offer small ticket personal loans to individuals. Poonawalla Fincorp focusses on consumer and small business finance as a part of its stated strategy.

This partnership is a step towards building strong partnership with partners who have demonstrated distribution at scale, risk management capabilities along with their technology prowess. The partnership provides complete end to end digital consumer loans across the country. The credit underwriting for these loans is done through a scorecard which enables right customer selection at scale, while the complete digital process helps democratize the process of taking loan. The partnership has seen a lot of traction within a month of its launch and the company intends to do more than 1000 crores of disbursement under this partnership in the current financial year.

KrazyBee Services Private Limited is a non-deposit taking Non-Banking Finance Company (NBFC) registered with the Reserve Bank of India. KrazyBee along with KreditBee which is its technology platform and India’s largest consumption based personal loan platform commands more than 20% market share of NBFC – Fintech disbursement in India.

Speaking on this tie-up, CA Abhay Bhutada, Managing Director, Poonawalla Fincorp said, “We are glad to partner with KrazyBee for new business opportunities and connecting with prospective customers through KreditBee’s digital platform. We are a digital-first, technology-led lender, and this partnership with KrazyBee is a natural fit to our business strategy. The partnership brings together two lenders who are obsessed with customer satisfaction and want to offer the best of customer experience to all their customers by leveraging technology."

Mr. Madhusudan E, CEO, KrazyBee commented, “Our technology strength empowers our partners to provide seamless disbursement services. Partnering with a Digital first partner like Poonawalla Fincorp helps us offer a wider range of products and services to our customers and also enables us to meet the ever-growing demand for digitally enabled loans.”

KreditBee and KrazyBee are supported by strong equity investors such as Premji Invest, ICICI Bank and Mirae Asset and has also raised debt from multiple partners such as HSBC, Bank of Baroda & Kotak Mahindra.

About Poonawalla Fincorp

Poonawalla Fincorp Limited (Formerly known as Magma Fincorp Limited) is a Cyrus Poonawalla group promoted non-deposit taking systemically important non-banking finance company (ND-SI-NBFC), registered with the Reserve Bank of India (RBI). The Company started operations nearly three decades back and is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange in India (NSE). Consequent to the capital raise of Rs 3,456 Crore in May’21, the Company is now part of the Cyrus Poonawalla Group with majority stake owned by Rising Sun Holdings Private Limited, a company owned and controlled by Mr. Adar Poonawalla.

The Company’s new identity “P” stands for Passion, Principles, Purpose, People and Possibilities. Poonawalla Fincorp Limited (“PFL”) has a widespread coverage with 279 branches across 21 States. The Company has AUM of ₹15,228 crore and employs more than 7,000 people. The Company’s financial services offerings include pre-owned car finance, personal loans, loan to professionals, business loans, SME LAP, affordable home loans and general insurance.

About Cyrus Poonawalla Group

The Cyrus Poonawalla Group of Companies, headquartered in Pune, are a diversified group with business interests that include Pharmaceuticals & Biotechnology, Financial Services, Clean Energy, Hospitality & Realty and Aviation. Serum Institute of India Private Limited, the group’s flagship company, is the world’s largest manufacturer of vaccines, supplying to Indian as well as global markets.

Happiness and Online Loans in APAC have Strong Direct Correlation of 0.6

Studying the impact of online consumer lending on the happiness of the population in Asia Pacific (APAC), analysts of Robocash Group found a strong direct correlation between them.  In other words, happier countries see higher popularity of online loans. At the same time, access to online lending helps people feel happier.

To show the impact of online consumer lending on the happiness of the population across the world and Asia Pacific, in particular, analysts of the company compared the data of the World Happiness Report by the Earth Institute with the number of search queries "loan" and "online loan" according to Google Ads. The significance of the relationship ranges from -1 to 1, where “-1” means strong negative linear correlation, “1” - strong positive linear correlation, “0” - no correlation.

General correlation of consumer credit to GDP to the happiness ranking globally shows that a higher level of happiness in a country results in the more widespread consumer lending. At the same time, an overview of countries in APAC has revealed an average direct relationship – 0.502. As a rule, markets ranked high in terms of happiness have stable economies and high incomes among the population. It unfolds the positive effect of lending in full, and the credit load does not make people less happy.

Meanwhile, developing markets see a lower share of bank consumer loans that are less significant for local people. Then, the heterogeneity of the economic development, geography and social factors in APAC plays its role too. As a result, the relationship between happiness and the volume of consumer loans in the region bears an exponential character.

However, the lower usage of consumer loans does not mean low demand for credit in Asia at all. This is mostly due to the significant share of the unbanked and underbanked as well as informal employment. For instance, in 2019, the latter amounted to 30% in Europe, while Indonesia had 75%. Altogether it draws the population to non-bank lending. Thus, 40% of adult Filipinos borrowed from relatives and friends in 2017, while only 10.7% applied to financial institutions or used credit cards. At the same time, online solutions are rapidly expanding driven by the geographical specifics and the digital adoption, but the market often stays out of the official statistics.

Moreover, an analysis of the interest for online loans across APAC reveals a strong direct correlation (0.6) between the happiness level and the number of search queries per 1,000 people. Indonesia and Vietnam stand out with the popularity of online financing tools amid insufficient banking inclusion. Another example is India, which is 10^th from the bottom in the happiness ranking. At the same time, the number of queries there is 5.3 that is close to the result in Japan and exceeds the regional trend. The reason is state initiatives, such as AADHAAR, empowering the unbanked population to access online financing more freely.

Overall, there is a strong direct correlation, which suggests that happier countries in APAC observe higher demand for online loans. And the other way round, online loans help the local population feel happier. Partially taking on the tasks usually performed by traditional bank loans, online lending helps people afford things inaccessible under normal conditions. Sure, it mostly goes about small amounts common for the industry that keep the negative impact of credit burden rather low.

Robocash Group is an international financial group operating in the segments of consumer alternative lending and marketplace funding in Europe and Asia. The company develops robotic financial services providing micro consumer lending to customers in Russia, Kazakhstan, Spain, Indonesia, Vietnam and India and operates its own EU-based P2P investment platform. The group develops products completely in-house using artificial intelligence, machine learning and data-driven technologies to provide precise and comprehensive risk management, comfort and speed for customers and efficiency for business.