IIT-Delhi alumni plans to convert bad debts into good assets

The Indian banking industry has recently witnessed the roll-out of banking models like payments and small finance banks. Reserve Bank of India’s new measures might help restructuring domestic banking.

During FY16-FY20, bank credit grew at a CAGR of 3.57% and as of FY20, total credit extended surged to $ 1,698.97 billion, as per IBEF report.

Improved spending on infrastructure, implementation of projects, and reforms are expected to provide further impetus to growth in the banking sector. The technological advancements has made mobile and internet banking services crucial.

In an exclusive interview with Rishabh Goel, CEO and co-founder of Credgenics, CIOL deciphers Rishabh’s journey and ambition in the banking industry.

Credgenics is a SaaS platform where the debt recollection journey is unified and data is managed.

“I grew up in Chandigarh as a shy kid who later in the college life became a key member of the placement committee. Growing up in a nurturing environment, my entrepreneurial ambitions always existed,” Rishabh said.

After the completing engineering studies from IIT-Delhi, I went on to gain qualification as a Chartered Financial Analyst and Fraud Risk Management, from the US GAARP. These further fueled my interest in the way the banking ecosystem functioned. The interest found its base when I was working with Blackrock, and then Deutsche Bank as an Investment Banker. Being honest, I am happy to say that I am living and realizing my dreams and passion as Credgenics grows step-by-step, he added.

Why do you think that there is a need for your company to exist in today’s market?

The motto of the company is ‘Converting Bad Debts into Good Assets’. In India, where the credit demand of more than $600 billion is being met through informal sources, digital lending is set to cross $100 billion mark by end of 2023, especially with the widening NBFC and fintech sector as we can already see.

With an increase in the loan book, we see a corresponding increase in overall NPA, especially with the existing archaic collections processes and new lending firms with limited experience in handling collections.

This is where we can be the solution providers to help lenders maintain a healthy risk profile as they grow. We believe that end-to-end management and transparency on performance of all collections efforts across channels.

We reduce the legal burden through digital bulk send out of legal notices, bulk real-time tracking of notice delivery, where in case of digital notices the time stamp and clicks/open are tracked, and in case of physical notices actual delivery status in real time from speed post is checked and tracked by our team.

Can you describe your products and programs elaborately?

Ours is a SaaS platform where the debt recollection journey is unified and data is managed through and through. The platform begins the process with data integration through SFTP and API, the data is then analyzed and basis the DPD bucket the communication is triggered.

The automated communication module helps us reach out to the borrowers through cloud calling, SMS, emails and even WhatsApp. The communication once triggered, the follow-up is maintained until the EMI transaction is made by the borrower. In case the borrower enters the delinquency list, our legal team gets active and triggers digital and physical notices. The notices and responses are tracked. The final resort is mediation, and ODR for which we make our platform available. We also provide the entire data and case study to our clients as evidence in the court of law.

What type of tech and algorithms do you use?

We have a microservice based architecture deployed over kubernetes to enable auto scaling. If you look at the main components of the tech stack, some technologies we use at Credgenics include Native Android (Front end), Red (Back end), coding languages like Python and AWS, EKS, etc., for Infra.

Can you describe your business model?

With a rapidly scalable and profitable usage based pricing, our platform offers two solutions (also our business models):

• The SaaS platform with two types of pricing model basis no. of communications triggered or loan accounts managed on the platform. There is fixed fee per account and per usage.
• End-to-end collections, entails the SaaS (including customization), automated communication channels, and Legal services.

What are your views on this industry during the pandemic and can you give me your insights on the future?

The banking ecosystem took a hard hit when the moratorium was ordained and debt recollection became a challenge. The challenge continues as the RBI and judicial norms are become stricter by the day, with more borrower centric regulations.

What would you like to change about this industry?

The lack of data management and reliance on the manual processes need remedy through appropriate digital intervention, so that surging bad debts situation can be taken care of. Ethical measures, while being compassionate towards the borrowers is a challenge as the liquidity and risk profiles of the lenders cannot be overlooked. Achieving a balance is a challenge, which cannot be done while working in silos. Also, the regulations need to change with time and data security while maintaining ease of access, with judicial and financial inclusiveness as the core motto.

How can India recover its economy during the pandemic?

From what we see, India is recovering. The process is slow and steady, with more MSMEs and Made in India getting a major boost. We need to prioritize Indian industry to bloom which would create more job opportunity and keep the economic cycle alive. Also, we need to ensure easier but properly regulated lending for those who are experiencing pay cuts, or have financial troubles. The answer to it all is in the problem-solving and entrepreneurial mindset.

In today’s world, there is a huge need to safeguard data, what steps have you taken to secure your company?

To safeguard the data, we need to put check at each stage because ours is a data intensive process where legal data is also involved.

We ensure our certifications and audits are constantly adhered to. RBI and judiciary given guidelines are the spine behind our operations. The cloud calling and other communication channels are coded and our tech team constantly keeps testing and upgrading the platform and features. Empirical data, and fraud trends are watched and tested. The internal testers keep a check and remove every possible bug at each step.

Any recent developments at your company?

We have come up with two products which are CG COLLECT, an app to track the movement of the agents on street and evaluate their performance. This feet-on-street app is a disruption in a manual process, to make collections easier even in geographies where digital collection is not easy.

The other product is the ZapPaisa app, it is our own payment app. This application would help us get the payments easily routed from the borrower to the lenders (our clients), with proper invoice and payment proofs in place. We are soon coming up with the enhanced app version as the work is in progress.

The expansion across geographies to Middle East, Asia Pacific, and other regions whose lending process needs our digital solutions is also in process.

Any latest round of investment?

We have recently raised $ 25 Million in the Series-A round from West Bridge Capital and Tanglin Venture Partners with participation of Accel Partners at the valuation of over $ 110 Million.