With interest rates on loans coming down quite a bit, especially on home loans, banks have been trying to simplify the process of taking a loan. But there are limited options when it comes to small-ticket loans. There are NBFCs (Non-banking financial corporations) that offer small loans, but interest rates are often very high.
What if you urgently needed some money and borrowing from a friend or family doesn’t work out? Imagine if you could, using just an app on your phone, obtain a loan within a matter of minutes?
While working with various financial institutions in India, Keerthi Kumar Jain also noticed something similar.
“I realised that this was a major problem for millions of Indians as the process followed at banks was so hectic that getting a loan was a nightmare. Moreover, it is something usually to fulfill desires and dreams but not for that unplanned emergency, that can strike anyone, any day. That is a huge problem and will exist till mankind lasts,” Keerthi says.
This was enough motivation for him to work on a model that could facilitate instant loans, 24x7, on the go, at the click of a button. So in early 2014, Keerthi along with his chartered accountant wife Neha Jain began working on launching a tech-driver system that could assess borrower applications in a paperless, contact-less and friction-less environment. Using their skills in financial services, they developed a proprietary algorithm that could predict a borrower’s intent and willingness to repay a loan. Keerthi is proud in claiming that this is the world’s first such technology.
With a proprietary algorithm in place, Keerthi and his wife Neha founded ‘Any Time Loan’ in September 2014. ATL uses data science, artificial intelligence, machine learning and robotics to offer instant loans by connecting eligible borrowers with listed lenders.
Say you urgently need a loan, all you have to do is download the ATL app, register with your PAN card, address proof and proof of occupation. An even while the registration process is being completed, a bot scans your digital footprint like your social media accounts, your recent online spending activities to determine if you’re someone who will pay back. Once declared eligible, a credit limit is granted to you, which you accept. The bot then matches you with a lender and an instant transfer is done to your bank account. The maximum time that it might take for a transaction, according to ATL, is a mere 15 minutes.
If you are a lender, you list yourselves on ATL with an investment commitment, which can be increased. The lenders on ATL’s platform are High Net-worth Individuals (HNIs), family houses, NBFCs and most recently YES Bank.
What kind of loans can you get?
ATL offers personal or consumer loans, as low as Rs 1000 to Rs 1 lakh, educational loans from Kindergarten to grade 12 – called K12 loans – and MSME (Micro, small and medium enterprise) business loans of Rs 30,000 up to Rs 50 lakh. Business and education loans do not require any collaterals, physical documents or guarantors.
While the peer-to-peer lending model is different from all banking and non-banking loan providers, what truly sets ATL apart, is the extremely low interest rates it provides. K12 loans are given at an interest rate of 0.1% per day, business loans at 0.05% per day and personal loans at only 0.01% per day.
ATL generates its revenues via a loan processing fee, which is either Rs 750 or 1.5% - whichever is higher – and also through transactional revenue. The processing fee is charged only the day the borrower repays the loan. So, on the repayment date, the borrower pays the principal amount, the interest and the processing fee.
Since commencing operations, ATL has disbursed over 34,000 loans, aggregating to over Rs 54 crore. And from the lenders’ side, it has a supply commitment of Rs 6 crore as on date.
The couple has invested around Rs 3.5 crore so far, apart from raising an angel investment of Rs 2 crore from global bankers. And despite being in the business of risk, ATL was operationally profitable within the first four months of commencing operations.
The next step forward for the 24-member team is to partner with more banks and NBFCs, which can leverage ATL’s technology to make credit reach the last mile. In the next three years, ATL’s aim is to hit a monthly loan disbursal rate of Rs 1000 crore per month and become a profitable unicorn in India. Once that goal is reached, ATL wants to go take its business a notch higher and enter emerging global markets.
This article has been produced with inputs from T Hub as a part of a partner program.