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New-age lending: Three startups you should keep an eye out for

Chaitanya Gudipaty
moneycontrol.comMillennials and GenY are warming up to financial technology (fintech) to take care of short-term finances. This new-age lending format is, to an extent, already disrupting traditional borrowing avenues. For instance, users are turning to fintech startups to finance an impulsive buy. Here’s a look at three of fintech startups which can tip the scales.

Mumbai-based Simpl allows users to make online purchases without immediate payment. It works on click-now-pay-later service that helps shoppers to buy from e-tailers, book movie tickets and even order food. The monthly limit for transactions on Simpl is Rs 5,000 and users can pay on the first and the fifteenth day of every month. No interest is charged to the users.

Simpl has partnered with food apps Faasos and FreshMenu, movie ticketing portal BookMyShow, and has also partnered with 10 merchants. Earlier in 2016, Simpl raised seed funding from Green Visor Capital which is led by former Chief Executive of Visa. 

MoneyTap is an app-based credit line offering users unsecured loans of up to Rs 5 lakh with variable tenure. Credit line allows banks to set a certain amount of loan for borrowers without any collateral. These borrowers, who are salaried professionals, can repay loans in EMIs over two months to three years at an interest rate.

MoneyTap is present only in metros and the Bengaluru-based startup has plans to expand the offering to other cities. Banks will assess and authorise the eligibility of the potential borrowers to steer clear of a credit bubble.

EarlySalary is a non-banking financial institution which doles out loans of up to Rs 1 lakh to salaried professionals, especially first-time applicants who find it hard to find lenders willing to disburse quick loans or even issue a credit card.

EarlySalary homes in on a loan amount to be disbursed to a borrower on the basis of his activity on Facebook and LinkedIn. The NBFC has deployed an algorithm that takes into account about 4,000 data variables from the applicant’s social media profiles. By virtue of being an RBI-registered NBFC, EarlySalary loanees get a CIBIL score once they transact on the platform. A good credit score can then boost borrowers’ chances of getting other loans or a credit card.