[The Turning Point] Here’s how CASHe built an AI-powered lending platform

While attending a conference around 2015, the entrepreneur V Raman Kumar was impressed with the workings of SoFi, a personal finance company and online bank based in San Francisco. SoFi provided financial products, including student and auto loan refinancing, mortgages, personal loans, and more. It was also a top ten percentile lender to IVY league schools based on their employability.

Inspired by SoFi’s business model, Raman wanted to start a similar business in India. However, he realized that there was a credit need, especially for the unserved younger generation, in the Indian market. This caused him to step in and create a solution to the problem.

In 2016, he founded BOXan AI-powered financial lending platform that provides fast, flexible and unsecured personal loans to young salaried millennials across India.

Build the product

Leveraging his technological background, Raman and his team built a predictive algorithm, which can assess with optimal accuracy whether the potential borrower would repay the loan on time, which draws on historical data from a population cohort reasonably uniform – millennials..

In late 2016, the team built a social behavior center algorithm, which was patented by TSLC, its Singapore-based holding company. Subsequently, they built a quality measurement algorithm, and combined it with the center of social behavior, and thus came up with their USP – Social Loan Quotient (SLQ) algorithm.

“It’s our secret sauce. If our business has grown the way it has, it’s thanks to SLQ,” says Raman.

He adds that the aim of CASHe was to provide urban working millennials in India with a pathway to better financial health using technology through their smartphones.

The digital lending startup has also developed an automated credit system with an AI-based algorithm to assess a borrower’s risk based on the user’s social and mobile data footprints.

What does it offer?

Initially, CASHe introduced short-term loans, offering 15-30 day loan products to around 50,000 customers, with a loan value of up to Rs 10,000.

Now, the company offers 90, 120 and 360 day loan products. It also has a line of credit facility, which provides customers with funds based on eligibility, and a buy now, pay later loan option.

It charges an interest rate of 1.5 to 2.5% on a monthly basis, depending on the loan and credits taken out by the customers.

The startup claims to record 10% month-over-month revenue growth and became profitable in the third quarter of 2018.

Gain traction

CASHe was the first fintech lender to debut on Google Pay, offering short-term loans to Google Pay customers.

According to Raman, the company is adding 15,000 to 18,000 customers every day, of which 1,800 to 2,000 loans are issued daily.

It has an active clientele of four lakh, with 1.3 million monthly active customersand 21 million app downloads, half of which took advantage of CASHe’s services.

According to the company, it has disbursed loan values ​​close to Rs 4,000 crore, 70% of which are repeat customers and more than 1.1 million loans have been disbursed.

In January 2022, CASHe raised Rs 140 crore from TSLC, bringing the total size of its balance sheet to over Rs 800 crore. Of this amount, Rs 500 crore was raised via debt from private banks and NBFCs.

Earlier this month, CASHe acquired Gurugram-based Sqrrl and announced plans to foray into the wealth management space.

During the announcement, Raman Kumar said, “The acquisition of Sqrrl is an important milestone for CASHe’s Vision 3.0 roadmap, as it paves the way for the next phase of our growth through our foray into the WealthTech space.

After that ?

“We aim to be a comprehensive wellness platform and are looking to apply for a digital banking license,” says Raman. “Until then, we are ready to empower any partner bank that wants to go truly digital. We will take them in digital format,” he adds.

The company plans to partner with a bank to serve its customers with digital banking services this year. It also aims to become a digital bank after applying for a license and getting its approval.

Currently, CASHe works with an NBFC license and is audited by the RBI.

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