During the interview with TechGraph, Anil Pinapala, founder and CEO of Vivifi Finance’s Flexpay, revealed Vivifi’s plans to adapt its instant personal loan offerings to meet changing customer needs and financial market conditions.
Read the full interview:
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TechGraph: What made Vivifi Finance focus on instant personal loans for salaried individuals? What makes the company different from other players in the market?
Anil Pinapala: Only 4 in 100 Indians have access to credit cards and only about 10% have access to credit from banks or other institutions. Vivifi’s credit solutions give access to credit to 300 million underserved and underserved individuals who have never had or currently have no credit cards or other credit products by understanding their ability to repay credit and more importantly their intent to do it.
The initiative is to bring credit to the remotest consumers so that they can experience credit card-like services and avail EMI-free solutions for their offline and online purchases. Vivifi uses Digital Onboarding of customers using a video KYC process while using machine learning algorithms that ensure instant loan approval and faster disbursal.
TechGraph: How does Vivifi Finance assess the creditworthiness of salaried individuals seeking instant personal loans and what measures does it take to ensure responsible lending practices?
Anil Pinapala: It is powered by an advanced AI-ML based underwriting and credit scoring system that enables real-time credit decisions and uses an advanced payment infrastructure to make real-time payments. Python, .NET, etc. are among the many technologies we use.
TechGraph: The instant loan market has seen a surge in recent years, with several new players entering the market. How does Vivifi Finance plan to stand out and gain a competitive edge?
Anil Pinapala: We can guarantee unserved and underserved customers with incomes up to Rs. 4,000 per month, whether they are in formal or informal employment. This includes catering through mobile phones to customers who may be semi-literate or not digitally literate and belong to non-metro cities. We help them build a positive credit history while maintaining profitability.
Vivifi’s Flexpay is India’s first and only emergency personal credit line that offers sachet-sized credit in a credit card-like structure. The remotest consumers can experience a credit card like facility and avail EMI free solutions for their offline and online purchases or needs. Our state-of-the-art technology allows us to identify the customer, offer credit and manage transactions. We were the first in the industry to include a video KYC process and are working to expand it to customer registration and onboarding processes.
TechGraph: What are some of the biggest challenges facing the instant loan market and how is Vivifi Finance addressing them?
Anil Pinapala: One of the biggest challenges India’s digital lending ecosystem had to face was/is the scourge of illegal (mostly Chinese) lending apps that did not comply with the country’s laws and indulged in coercive collection practices such as at the same time they charged customers over 200%-300% interest rate.
When that happened, we were at the forefront of the battle, explaining the difference between legitimate, licensed lenders like Vivifi and illegal apps to our customers, the media, regulators, law enforcement and Indians.
Our activism was rewarded with the Digital Lending Regulations by the RBI. This made it easier for customers to identify legitimately licensed lending apps, while giving them control over their data and providing full disclosure of credit costs with transparency in the terms of the agreement.
TechGraph: How does Vivifi Finance balance the need for fast loan repayment with the need for thorough due diligence and risk management?
Anil Pinapala: At the heart of Vivifi’s operations is their state-of-the-art, proprietary, AI-driven loan management system known as LENDEZ. This advanced platform, in conjunction with Vivifi’s data-rich Decision Engine, ensures a smooth and efficient underwriting and customer process.
With over six years of operational experience, Vivifi has been able to use comprehensive customer data collected over this period to continuously upgrade the Decision Engine. The decision engine is based on an unconventional multi-dimensional underwriting model and takes into account a wide range of factors, including credit metrics and drivers of repayment behavior.
Also, realizing the need to cater to the unserved and underserved markets across India, Vivifi is at the forefront of developing an in-house video-based KYC infrastructure. This pioneering infrastructure enables Vivifi to reach even the remotest corners of the country.
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TechGraph: Instant personal loans can be convenient for borrowers, but high interest rates and the risk of a debt trap are concerns. How does Vivifi ensure responsible lending practices and protect borrowers from debt traps?
Anil Pinapala: At Vivifi, we promote Truth-in-Lending by offering loan products that have transparent disclosures and ensure that all loan terms, including interest rates and repayment schedules, are communicated to borrowers in advance. We perform a comprehensive assessment of each borrower’s financial profile to determine their repayment capacity and offer loan amounts that match their financial situation.
Additionally, we believe in empowering our borrowers through education and financial literacy initiatives. We provide resources and guidance on financial management, budgeting and responsible borrowing to help borrowers make informed decisions and avoid falling into debt traps. Our commitment to flexibility and support means we work closely with borrowers, providing help and options if they encounter financial difficulties during the repayment period.
TechGraph: How does Vivifi plan to evolve its instant personal loan offerings in response to changing customer needs and market conditions?
Anil Pinapala: At Vivifi, we are committed to continuously evolving our credit offerings to adapt to changing customer needs and market conditions. This includes introducing flexible repayment options, competitive interest rates and streamlined application processes to improve the overall borrowing experience. We closely monitor market trends and conduct extensive customer research to understand their changing requirements.
Given that EMI products are not suitable for middle and lower middle class Indians who are in a pinch and take emergency loans, FlexPay’s digital personal credit line will come to the rescue in times of need. FlexPay is able to offer credit to individuals without any other credit options due to their employment, income, credit score, social profile, location and literacy among many others.
Our goal is to make credit available to all households, thereby eliminating unregistered lenders in the physical world and illegal lenders in the digital world. Having served 85% of the country’s pin codes, we expect to bring 2 million households under formal credit by 2024 and 20 million by 2029.
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