Mobile wallet company Mobikwik is reportedly working on the launch of a lending product that will offer instant credit to customers directly from its app. According to a report on Business Line, Mobikwik’s co-founder Upasana Taku says the product will launch later this month.
The instant credit product will be the payments company’s first lending product and according to the report it will target ‘new to credit’ customers — both individual and small businesses. A ‘new to credit’ customer is one who does not have any credit score and generally ignored by most banks for sanctioning credit. The company plan’s give both small ticket and larger-sized loans straight from its mobile app.
For credit assessment of the borrowers, MobiKwik says it has developed its own alternate lending model —Mobiscore — based on say 400 variables.
It will be end-to-end delivered as a MobiKwik product including the entire communication, experience and money disbursal process. But since the company does not have a lending licence it is going to have to partner with a non-banking financial company (NBFC) to enable the loan disbursal process.
The Business Line report suggests that there are 2-3 lending products planned and MobiKwik is in talks with 2-3 players, including partner Bajaj Finance.
The report says that MobiKwik also plans to roll out investment products like mutual funds.
Mobile wallets looking elsewhere
The RBI’s new KYC norms have led to a dip in the usage of mobile wallets and have had an impact on the core product of most payment companies. Mobikwik’s biggest competitor Paytm has also reacted by diversifying its business into the personal finance space. Paytm has had a slight head start.
Paytm is reportedly trying to enter the lending space and is seeking a licence from the Reserve Bank of India (RBI) to become a peer-to-peer lending platform.
Paytm Money, the payments company’s wealth management arm is set to begin operations as soon as the company receives approval from the Securities and Exchange Board of India (SEBI). It was reported that One97 Communications, Paytm’s parent company, will invest $10 million upfront in the newly created wealth management arm.
Last month it was reported that Paytm was closer to offering insurance products on its platform, as its parent One97 Communication Ltd has set up two insurance units: Paytm Life Insurance Ltd and Paytm General Insurance Corporation Ltd. The development was found in the company’s ministry of corporate affairs’ filings. According to the filings, the company’s founder Vijay Shekhar Sharma, and senior executives Shankar Nath and Madhur Deora will be the directors of these units.
In a separate development, the company is reportedly also launching a credit scoring product, Paytm Score, which will find out user’s credit score based on their transactions and payment behaviour. This move is in line with its interest in credit or loan segment.