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At a time when the Covid-19 pandemic has severely hit household finances due to salary cuts and job losses, new age fintech companies like PayMe India are offering innovative credit options like advance salary loans and short term cash loans for emergency needs. We got talking with the start-up firm’s Founder, Mahesh Shukla on what got him to launch the concept and how is it bailing people out of the current financial crisis.
“Salary loans are typically personal loans only but the difference in our product is that it is a smaller loan for a smaller period of time. In this, a borrower gets this money at the time of emergency and he/she can pay us back at one go later whereas in a personal loan, one pays back via EMIs for several years.”
Simplified KYC
As a complete digital lending platform, the company ensures easy access to customers with simple online process of Know Your Customer (KYC).
“If a customer onboards our platform, they can get a loan in just 10 minutes by doing the eKYC which includes sharing an income proof. We have made use of data science technology to help us identify the eligibility of a borrower instantly. Infact, we call it 3-2-1 as the process takes 3 minutes in onboarding; 2 minutes in underwriting and within 1 minute the loan gets disbursed”, he said.
Interest rate
For small ticket loans, Shukla said that the company charges 0.1% per day which is far less than credit card loans and which is why borrowers prefer this loan.
He also shared how about 300 million people in India borrow from the unofficial channel that is from their friends or relatives. The problem here has been that these borrowers are not entertained by banks and financial lenders. The loans that they borrow unofficially are not creating any history for them and they are also paying higher interest.
This is where fintech lenders are stepping up and trying to bridge the gap but challenges of education and awareness are still something they are combating with.