EarlySalary, a company which offers salary advances and instant cash loans, has raised $4 million in funding from IDG Ventures India and Dewan Housing Finance Corp (DHFL). Akshay Mehrotra, CFO of EarlySalary, told MediaNama that the company lends from its own balance sheet and will use the funds to build its lending book and develop its products. EarlySalary has its own non-banking financial company (NBFC) and lends from the NBFC's books. It acquired an NBFC called Ashish Securities to get the required licence, as indicated by this Mint report. How much does EarlySalary lend and charge? EarlySalary claims that it has distributed more than 15,000 loans, and typically, customers borrow between Rs 8,000 to Rs 1,00,000. It is right now targeting salaried young working professionals. Mehrotra said that 35% of their customers are new to credit and do not have a credit history, and it is looking to fill the gap for them. The company charges Rs 9 per Rs 10,000 a customer borrows per day. Mehrotra said typically customers repay loans within 7 days up to 30 days. So for a 30-day loan, a customer is charged an interest of Rs 270 on a principal of Rs 10,000. This translates to around 2.7% interest per month or around 30% per annum. Credit cards in India charge an interest in the range of 1.5% to 2.99%. But Mehrotra said that per annum interest calculation does not work for their business as they are looking to lend only for short periods. "The goal is to provide a…
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