Pune Startup Mantra: 4End raised $ 1.1 million in pre-seed round
PUNE A startup that has not yet started has not actually started. Yes, 4Fin has raised $ 1.1 million in pre-seed through Curesense Therapeutics, investors behind biotech company Mylab. Yes, the founders of 4Fin, Ajit Sinha and Amit Tewary, both former senior bankers, are more than aware of what it takes to be “profitable” in the lending business. Yes, 4Fin is based in Pune.
However, the CTO of this integrated credit market can only be appointed in October, when the 4Fin service is put into service. All we can reveal is this developer; according to Sinha and Tewary, has created financial technology solutions for banks in 15 countries.
The fintech space in India, like 4Fin, is only just beginning, at least in terms of moving the market online.
Traditional bankers still dominate the lending space, especially at the lower end of the tax food chain.
Each of these phrases from the founders of 4Fin may sound like the hundreds of “spam” messages that flood our inboxes every day: “Accessibility of loans for clients at affordable rates”; “Same day loan disbursement ability”; and of course, “very, very high probability of getting a loan”.
“We’re in the bottom line lending, but in terms of volume we want to be top of the line,” is the first line of the chorus, followed by “An integrated credit market for all of your critical life needs. “.
The line behind all of the above is: “Lending is not about giving money, it’s about collecting. “
According to 4Fin data, there are 500 million smart phone users in India and 620 million internet users
India’s household debt to GDP ratio is 37%. The corresponding figure for the United States is 80 percent, Malaysia is 76 percent, and China is 62 percent.
The size of the industry, banking with specific lending intent, is $ 612 billion with a growth rate of 18%. Up to 73 percent of low-cost loans come from outside of Tier 1 cities.
Given that startups like Capital Float (Bengaluru), MoneyOnClick (Bengaluru) and Rupify (Bengaluru) are already in space, what would set 4Fin apart from the rest?
First of all, it’s “omnichannel access for all types of media,” says co-founder Sinha. “It is never a fixed model like the conventional bank. Since we have to do loans quickly, we rely heavily on data. We will be very agile and robust.
Loan is easy, collection is difficult
Decades of lending experience have taught the duo a lot, who agree that lending is easy, but collection is difficult. Says Sinha, “As a lender I have to assess the market, the dealers, the manufacturers and the risk involved when you give money as working capital. Lending is not about giving money, but about collecting. Either you get the money back or the asset. Thus, the value of the asset must be at least equal to the outstanding amount.
According to Tewary, “Loans keep changing every decade. Many changes have taken place after Covid-19. The benefit of using fintech was there before Covid, but now its need has multiplied. Acquiring customers has become easier thanks to online transactions. This change is rapid. However, customer service took a hit.
4END – ready in a few hours
4End focuses on facilitating small loans to cover expenses for health, education, electric two-wheelers, among other basic necessities. 4Fin aims to make financing more accessible to Bharat (semi-urban and rural parts of India), to offer personalized loan products and to support its clients with its “4Fin Mitras” model, designed to act as company-oriented customer service.
4Fin has developed an in-house loan origination system, loan management system, debt service management, artificial intelligence-based algorithms for credit scoring and electronic stacks for automated end-to-end processing. end. These solutions reduce loan approval and disbursement times, facilitating faster decision-making and ensuring that loans are available to clients at affordable rates.
According to Sinha, “There may be genuine people whose credit history may have been affected due to some delayed monthly payments in the past, and they may be unable to obtain loans from banks. Thanks to our platform, we will do a real matching. Thus, any customer coming to our platform will have a very, very high probability of obtaining a loan. We will give the best two or three offers, which a customer has the option to select. We have developed a kind of technology stack that allows us to disburse the loan on the same day.
The Mitra effect
The founders of 4Fin believe that customer support will be a big differentiator in the lending space and, therefore, they decided to integrate 4Fin ‘Mitras’ (friend). It will be the “uberisation” of trusted providers on a freelance model. The Mitra will be connected via an app and upon request or request, the nearest Mitra will reach the respective customer.
According to Tewary, “A big challenge in any mode of online business is that people feel lost in the customer service segment. Opening branches is a very expensive process for customer service. Therefore, we integrate ‘Mitras’ which together with the technology team will provide customer support. We will give the necessary training to the Mitras and they will work with us on a case-by-case basis. They will be paid on a contractual basis and therefore will not constitute an economic burden. At the same time, it will solve all the problems on the client side. We offer our customers omnichannel access for all types of support.
Integrated credit market
A 4Fin app and virtual and real credit cards are in sight, say the founders. “We are creating an integrated credit market for certain essential products in areas such as education, health and electric vehicles. We will not go to the Buy Now Pay Later (BNPL) area. Right now we do a lot of moorings and as a result we can possibly offer our customers the best rates (discounts and lower interest rates) for electric two-wheelers from a particular company. Our range of loans will be from Rs50,000 to Rs5 lakh. Most of the expenses for any individual are covered in this range. We’re in the bottom line lending, but in terms of volume we want to be at the top of the line, ”they said.
Oh, the ‘heart’ factor
Ajit Sinha and Amit Tewary, both former senior bankers with a wealth of experience in wheel and inventory finance; and retail credit respectively, founded 4Fin in July 2021. Sinha came to Pune in 1998 for his MBA studies and met Tewary in 2008 while working as colleagues in a bank.
Tewary says, “I ran the rest of the Maharashtra region for retail lending, while Sinha ran Western India for the Wheels division. After a few years, Sinha started her own consulting firm and mentored many organizations, while I became more fintech oriented. We both followed a meditation practice called “heartfulness” which kept us connected. We regularly discussed the potential of the fintech space and decided to launch 4Fin.
“Two more co-founders (names withheld) will join soon,” Tewary added.
Amit says, “We want to reach out to people. Beyond India’s top 25 cities, almost all regions are unbanked. However, generating a lead does not necessarily mean that we will grant a loan. Failure to pay is our problem (not Mitras’s problem). 4End Mitras will get money on the trade while the behavior of the portfolio is our concern. Initially, we travel with our EV dealer partners and therefore the dealers will be our Mitras. Our products will gradually stabilize until January or February 2022. “