Technology fuelling growth of alternative credit

Dhiren Makhija

P2P lending platform Cashkumar is focused on short term loans for salaried individuals. The Benguluru-headquartered company sees a fifth of the loan demand coming from Hyderabad and so far has disbursed about Rs 2 crore loans. Its co-founder and chief executive officer Dhiren Makhija summarises trends happening to B Krishna Mohan

Technology aid

There is a shift in the way credit is perceived and obtained. The credit market is going through a transformation like never seen before. The market for alternative and digital credit platforms is positioned to grow manifold by over the next few years. Banks have been unable to meet the growing credit demand considering less than 25 per cent Indians have credit scores or a credit history, a must for banks to consider loan applications. Also, the time taken to obtain a loan through conventional channels is long. As a result, tech savvy youth are seeking faster, alternative means like the P2P channels to obtain unsecured loans.

Focus on Hyderabad

We have been focusing in the South India and Telangana is a key market for us. We have processed about 2,500 loans and a fifth of them are in Hyderabad. The value of loans given in Hyderabad could be about Rs two crore and the average loan size is Rs 40,000. In all, we have enabled disbursal of loans worth Rs eight crore. Repayment is good from the city. We are keeping a keen watch on Hyderabad market mainly due to the rising number of the salaried class.


The company is growing at 30 per cent month-on month and plans to disburse about 2,400 loans a month and expand operations to 20 more cities this year and disburse loans worth Rs 45 crore. The platform, which came into being in 2016, has 1000 plus lenders now. We are seeing a 14 per cent conversion rate. The delinquency rate is around 3.9 per cent. However, we have seen it improve in the last eight months.

Dealing with multiple lending

We are tying up credit reporting agencies. This will ensure that loans taken by the customers are reflected in their respective credit reports and will aid in cutting multiple lending. The salaried will be extended loans based on documentary evidence. In some cases, the previous employment details are also sought. The loans are extended only after the risk team validates the loan applications. We also use a mobile-app for further validation. Repayment is through a NACH mandate.

Interest rates

The interest rates can go from 20 to 24 per cent per annum. Most of the loans are for six to seven months. However, the returns in the form of interest as well as principal keep rotating. The number of lenders is on the rise.