Startup Circle: How is Upwards providing a one-stop solution for all credit-wellness needs?

The days when one had to fill out lengthy application forms and wait in long queues to avail loans from banks are long gone. Today, technological evolution has paved the way for fintech startups powered by cutting-edge technology to disburse loans instantly. Upwards is a one-stop solution for all credit-wellness needs, particularly for lower-income segments of the society who are unable to avail credit from formal financing institutions.

Read Abhishek Soni, CEO & Co-Founder of Upwards talk about how the startup aims to introduce user-friendly and easy ways of inculcating financial wellness and availability across the country.

Tell us about your journey

I hold a dual degree of B.Tech and M.Tech in Chemical Engineering from IIT, Delhi and my first stint with a startup that marked the beginning of my entrepreneurial journey was when I founded a social commerce venture that was intended to be a cross between a social network and a precious jewelry platform. One of the key learnings from that venture was that when the product is focused on high-end items, it drives a lot of engagement and adds aesthetic value through appealing images. However, the challenge comes in monetizing the business.The main lesson learned from the venture was that pure engagement and traction may not help build a monetizable business. We then sold that venture – it was acquired by a large Mumbai-based jewelry business.

My second stint was with Indifi which was my first experience with an organization in the FinTech sector. Working with Indifi gave me valuable insights into how the lending segment works, new-age lending, and the FinTech and lending sector. Being a part of Indifi’s team also led me to become a CFA Level-2 candidate specializing in Finance. After Indifi, I co-founded Upwards in 2017 with Nimesh Verma, who is currently the co-founder and CTO at Upwards.

How is Upwards different from other lenders?

When we talk in the lending context, the key product is cash.The innovation at Upwards comes from the segment that we target. For example, an individual whose income is INR 20,000 either has the option to borrow from moneylenders or payday loans that have a tenure of 90-180 days and a 3-6-month loan, all of which are low-ticket size but overpriced. They aren’t very borrower-friendly and ultimately require the borrowers to pay hefty interest rates.

Upwards offers relatively long-term instant loans for the lower-income segment of the society at reasonable interest rates. This facilitates easier access to credit without the added burden of short-term payment. Upwards has made a mark in the segment when it comes to understanding the nuances and lending tolow-income borrowers while still optimizing delinquency and the risk vs. return equation.

Our key focus is to extend credit to lower-income segments who cannot receive long-term credit from traditional institutions. We also aim to venture into tier-III and tier-IV cities where other FinTech companies aren’t operating to make credit access available across the country while delivering a seamless experience driven by technology.

Which markets are you looking at? How are you customizing your offering?

At the PAN India level, access to credit continues to remain a challenge for people in the lower-income segment and even if they do approach traditional institutions such as banks, the loan approval process is tedious and time-consuming. Our target group is low-income salaried individuals. Geographically speaking, it is a mix of tier-I, tier-II, tier-III, and tier-IV markets with a significant percentage of our portfolio coming from non-metro areas.

Upwards is amongst the few platforms where salaried, low-income individuals can avail a mid-tenure, mid-ticket size loan in a completely digital way where the end use case of the loan is productive with ticket sizes up to INR 2.5 lakhs. Besides, the EMI is not more than 15-20% of the individual’s income, enabling them to comfortably repay the loan.

What are the major challenges for the FinTech industry?

At present, much like other sectors, the COVID-19 pandemic-induced stress reflects in the portfolio and we are focused on tiding over these times soon. However, our underwriting models are robust and ensure that such macro risks are factored into it and do not lead to any material losses.

From a regulatory standpoint, there have been several positive developments in terms of easing digitization. The next major regulatory impetus will be when AA (Account Aggregator) ecosystem goes live as this will drive the next phase of growth and further facilitate digitization in the country.

How do you ensure data security in the world of rising cybercrimes?

Cybercrime has indeed become rampant in recent times, posing a major challenge to the Fintech industry. We use industry-leading security protocols such as SSL, 256-bit encryption, variour malware, and spyware protection to ensure data security. Safeguarding the data of our borrowers is a core priority for us and to date, we have had no events of security breaches of any kind.

Plans for 2021?

In the short term, we are looking at a month-on-month growth rate of 20-30% and aim to disburse loans worth INR 200 Cr in the current FY with significant penetration in non-tier-I markets. Furthermore, we look to leverage technology to enable stronger, real-time underwriting along with delivering best-in-class customer experience.