My father was in the government service and while growing up in India in the 70s and 80s; money was always tight at home, especially after the middle of the month. Years later, upon returning from the US and while working as a volunteer for Aadhaar (UIDAI), I had the good fortune to see how the power of technology could be used to solve real-world problems.
This is when I first came across the term, “Poverty Premium:” a peculiar problem where those who earn less seem to pay a higher fee for accessing certain financial services, though they may be more credit-worthy than the rich.
From then on, finding ways to use technologies such as Aadhaar and smartphones to solve the “Poverty Premium” problem has always been at the back of my mind and since last year, it has become an obsession.
Credit card penetration, the most popular product for offering credit that is not secured by a collateral, is shockingly low in India with just 24 Mn cards for a country of 1.2 Bn! Personal loans, another product offered by banks, has negligible uptake.
Finding What The Customers Want
Instead of trying to figure out how to sell more of the same credit cards or loans, I decided to find out what customers really wanted. I personally spoke to more than 1,000 people to find out what their lives were like, how much they knew about banking products and what they really wanted.
This was indeed an eye-opener. Most of them did not even consider banks as a go-to option when they needed additional funds. Cumbersome processes, rigid products and complete lack of transparency were their main reasons to avoid banks completely.
This was strange in some ways since banks are one of the most trusted brands in the country; after all, we trust them with all our savings. So I then started talking to bankers. In the last year, I must have visited Mumbai some 50 times!
I expected to find a bunch of fuddy-duddies who were blind to technology or opposed to new ways of doing things. And to my surprise, I found a majority of them to be extremely tech-savvy and progressive but stymied by their internal processes or technologies. They have an entirely different set of things to balance between RBI regulations, investor expectations, and grappling with the tsunami of tech-driven changes that were coming their way. I was able to get meetings with anyone I wanted and they were amazingly open to sharing information and war stories.
Why We Launched MoneyTap
Having been a part of EZEtap and Happay, I had no doubt that this new product had to broadly work within the banking systems and regulations for reasons of security, trust, regulatory compliance, and scaling. Scaling because lending requires hundreds of crores of capital and only large banks and NBFCs had that kind of risk appetite.
Solving this real credit problem, getting the right banking partner and their drive and stitching it all together such that the customer gets a seamless experience on an app, without knowing or caring what is behind their phone, was a daunting task.
My decision was then clear. Though I had a terrific time co-founding and growing Prime Venture Partners (previously AngelPrime) with close friends, I knew there was a huge market opportunity to introduce a radically different financial instrument. This was not an easy decision because Prime had been home and we had a great set of companies.
Being a venture capitalist is like being the coach of a sports team, but being an entrepreneur is like being a player on the field! Friends helpfully reminded me that older players get injured more easily!
Having started on my own in my previous avatars and by being a part of over 20 startups, I had zero illusions that it would be any different this time. I always liken starting a company to climbing a mountain, one of my personal passions. No matter how many you’ve done, you’ve to always start at the bottom the next time.
Here, I got a lucky break. I teamed up with two amazing entrepreneurs, Anuj and Kunal, as my co-founders. Having the right founders with whom you have chemistry is like having a nitro boost in your car and not having it is like driving with flat tires.
Any entrepreneur reading this, with or without studying chemistry, will know exactly what I mean. We’ve since built an amazing team with a culture of building nothing short of a world-class product. Using the best technology and to solve a real Indian credit problem is our mission.
After nearly a year of building and beta testing, it’s our honour to launch a truly original product, MoneyTap, today.