What is mPokket?
Mr. Gaurav: mPokket is an instant loan app that you can readily download from the Google Play Store. Simply install the app, submit a handful of documents, and register. Once approved, you can borrow up to Rs.20,000 depending upon your profile – college student or salaried professional. The money will be credited directly to your bank or Paytm account.
What were the first steps when starting?
Mr. Gaurav: It has been a nostalgic and eventful journey. In 2016, I started mPokket to address the market gap where our country’s youth could not avail credit to meet any emergency expenses. Our seed round funding was in 2017. In 2018, we became profitable and went through our Pre-Series A round funding. We reached a user base of 1 million KYC-approved customers in 2019. We had our Series A round funding in 2020.
You studied in the USA. Do you think this made you more entrepreneurial? How did it help get a different perspective?
Mr. Gaurav: Thank you for the question. My stint in the US played an indispensable role in my decision to start mPokket. As a young college student in America, I could avail myself of a Credit Card even though I was not a resident. Contrast that with the situation in India, where even to this day, no traditional lending institutions will give a credit card or personal loans to a college student. This was the genesis of the idea behind mPokket – an app that would simultaneously empower our country’s youth while allowing them to become fiscally independent and responsible.
How does it work for a student? And how do you actually get the money? What would be a scenario for small-ticket loans?
Mr. Gaurav: mPokket is an exceedingly easy-to-use app. Any college student can register after furnishing their college ID and a handful of other documents. To begin with, students can avail of a minimum loan amount of Rs.500. Our artificial intelligence-driven algorithm considers hundreds of data points to determine the appropriate borrowing limit at any point in time. With good behavior and the right metrics, the borrowing amount can increase up to Rs.20,000 over time. The money gets deposited directly into the bank or Paytm account.
And how do you return the money?
Mr. Gaurav: mPokket users get up to 3 months to repay the loan amount along with nominal repayment charges.
Why would you choose mPokket instead of a bank loan or credit card?
Mr. Gaurav: The youth of our country are not eligible for loans by traditional lending institutions because they cannot assess the creditworthiness of new credit customers. Also, since the borrowing requirements are typically not large, banks don’t find it profitable to give small-ticket loans due to their high-cost base. Yet, the youth also have emergency expenses. Who will fulfill those financial needs? Apps such as mPokket offer our youngsters an opportunity to meet their short-term expenses without depending upon their family and friends.
Are there any regulations over the digitization in India’s fintech ecosystem?
Mr. Gaurav: the RBI regulates India’s FinTech ecosystem. The central bank recently issued a stern warning against errant instant loan-apps that lure customers with false promises. As a responsible member of the FinTech industry, we at mPokket take these directives very seriously and perform all due diligence forms to ensure that we are fully compliant.
So mPokket is a lender or a technological implementation over a lending institution?
Mr. Gaurav: The mPokket app is a technology platform that partners with lending institutions to provide credit.
Is there a viability concern for NBFCs and digital lending fintech?
Mr. Gaurav: Unfortunately, yes. Several operators in the loan-app domain use unscrupulous means to lure customers and recover loans from them. Nevertheless, honest businesses such as ourselves continue to thrive, despite adversities such as Covid, etc. We have confidence in our offering and believe in the value that we add to our customers’ lives.
There are over 5 million downloads only for the Android app. How many users do you have already?
Mr. Gaurav: Presently, we have more than 1.3 million KYC-approved customers. We expect that number to grow to 1.5 million in the next few months.
Do you think it is a specific business model only for India? How did you come up with the idea?
Mr. Gaurav: As discussed above already, the ineligibility of our country’s youth to avail loans from traditional lending bodies gave me the idea to start mPokket. We are exploring how the mPokket value proposition can be offered in other countries.
What are the digital lending trends in the post-Covid world?
Mr. Gaurav: I think all forms of financial operations will slowly make a transition from its brick-and-mortar avatar to the digital world. If anything, the pandemic has only hastened this process. We expect to see more cooperation between traditional financial institutions and ventures such as ourselves in the coming year. That can only be good for the future of FinTech in India.
What is the most common need that gets covered with a mPokket loan?
Mr. Gaurav: mPokket loans cover a whole host of expenses – books, exam fees, online courses, other college expenses, food, travel, shopping, medical, and emergency expenses.
So where does mPokket go from here? What are your future plans?
Mr. Gaurav: Our business operations already include salaried professionals and college students. Soon, we will expand to cover the self-employed segment as well. We will also expand our product offering over time to include other credit and financial products like buy now pay later and credit cards.