Investors eye the opportunity in the personal finance space


Amazon, one of the world’s largest E-commerce giant has picked up stake worth Rs. 375 crore in online financial services marketplace BankBazaar. Andormeda, the biggest offline loan disbursal company acquired recently to get a hold on online market.(Read full story of acquisition here.)

Personal finance space is witnessing interest drawn towards it from a large chunk of entrepreneurs for quite some time now. Earlier this year, Snapdeal acquired RupeePower – a digital financial distribution platform; similarly, Policybazaar raised $40 mn , earlier in April, this year. Scenario of Personal finance space in India Personal Finance on Debt Side is becoming massive every day. Total Retail Assets Portfolio – 22 lakh crores with expected CAGR of 21% In terms of loans, the market size is: Home Loan – 20-25k Crore Personal Loan- 5-7k Crore Loan Against Property – 6-10k crore Excluding TERM Loans by Nationalized Banks Moreover, Online Loans Market is worth around 4500 Crore, as per Last published figure of 2014 and is expected to exhibit growth of 90 % Year-Over-Year.

Additionally, India Consumers are hungry for online Search and Consumption and want to shift from ATM Banking to online banking, Branch-network Heavy banks are also shifting to online platforms. Consider the data below to substantiate: 125 million smart phone users and 6 million smart phones every month and 200 million is the number expected in 2016 45 million already doing Transactions online and increasing to 100 million ‘ Transition’ from offline to online to become Fin-tech Companies 350 million Internet Users in June 2015 expected to grow to 500 mn in 2017, as per IAMAI and half of them will be using on Mobile 60 % of searches online happen through mobile SBI- the sleeping Giant is waking up to expand its Mobile platform All banks are shifting gears to go Digital- HDFC bank has introduced ‘Watch Banking’ and 10 seconds Digital Deliverance of Personal Loans More insights on the landscape: Alternative Lending Tech can potentially address a market of $800B of SME loans and $400B of personal loans in India $30M investment has gone into B2B loans while $1.77M has been invested in P2P loan lending firms

What are the factors triggering growth of Personal Finance and ‘The Transition’? Personal Finance has been a big Hit in the US. 60+ funded companies in Personal Loans vertical with a funding of $ 2.8Billion and more such as SoFi (student loans) and Lending Club in P2P space which went for IPO in 2014.

Vineet Jain, Co-Founder and CEO,, explains this inclination by stating that Investor Community is realizing a similar potential in India, and are also drawn to this space as it is a high engagement product. All e-commerce companies are finding it extremely difficult to run customer acquisition front-ended by Discounts strategy and will have to recognize financial services as a High Revenue per Transaction Business. He expects that lots of adoption will take place in this respect and is likely to trigger few more acquisitions. He believes that the need of the hour is to have online financial services companies who have the potential to service customers till the customer gets the loan. “Lenders will continue to engage Distribution partners as it decreases their overall COA, they will look beyond Lead Generators and Look at Fulfillment of Leads by their Partners. Customers will look beyond Plain Comparison Sites and at Value adds such as Recommendation of Lenders and Complete Hand Holding by the Originating Online Platform� says Vineet Jain.

Vineet observes that today, consumers, particularly in urban and metro areas, have higher disposable incomes and are open to taking loans to meet their lifestyle needs and buying insurance to secure their future. However, with the increasing number of over-eager lenders and insurance companies, consumers are also faced with the daunting task of choosing the right product since the decision usually has a long term impact on domestic cash flows. That’s where consumers tend to turn towards advisory bodies to make right decision. However, large space is with lead generators who pass on the lead to industry channels or lenders for fulfillment. Very few players like are into fulfillment and Experience Creating domain. uses its algorithms to recommend the Right Loan and Backs it up with its on-field Team as support to the customer, to be with the customer throughout the life cycle.

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