April 6, 2021

6 minutes to read


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In an era of rising inflation, it becomes difficult for a young working professional to meet the end of the month expenses on a salary that is credited on the first day of a month. “Budget thoda hate tight. Salary year of pahele ” (I’m broke. Let my wages be credited) is a phrase one may have heard from friends or colleagues. It’s not just inflation, but the desire to buy the latest smartphone or laptop, let alone plan a trip, is causing cash crunch. At this point, obtaining additional liquidity in the form of a loan with attractive interest rates can amortize end-of-month needs.
To meet the enormous credit need of this underserved population and enable them to live worry-free, Akshay Mehrotra founded EarlySalary. In an interaction with Entrepreneur India, Mehrotra explains how the startup has helped people and allayed fear or skepticism about startups providing quick cash.

EarlySalary: Quick Savior for Office Lovers?

Founded in 2015 by Mehrotra and Ashish Goyal, the Pune-based startup is a consumer lending platform that helps young professionals get easy salary advances or instant cash loans. The startup claims to offer up to INR 5 lakh of flexible loan amount with attractive interest rates. EarlySalary helps young professionals with an easy line of credit, instant cash loans, payday advances, long-term loans, student loans, interest-free EMIs for purchases and travel expenses. In order to expand its customer base, the startup has also integrated with the HR systems of many companies to help entry-level employees and blue-collar workers instantly borrow.

“At EarlySalary, we aim to provide a one-stop credit solution that helps our clients get financial support in emergencies and improve their lifestyles,” Mehrotra said.

The startup has disbursed to date more than 1.7 million loans worth 3,500 crore INR.

The problem

After his long stint working with larger industry conglomerates such as retail, consumer services, banking, e-commerce and insurance, Mehrotra decided to have something of his own. Mehrotra and Goyal after interacting with several professionals in various spaces realized that a common problem that existed was the shortage of cash. This awareness helps them decide to found an online lending platform.

“We have realized that there is a large underserved credit population in India. Easily accessible financial aid was non-existent for the country’s young professionals, ”Mehrotra said.

He now claims that over the past five years, the startup has helped early jobbers move to a new city, buy a large LED TV for parents back in their hometown, plan vacations and even to provide funding before spending.

One of the main issues Mehrotra noticed and wanted to address in his platform was the availability of loans within minutes instead of days. This required minimal human interference and maximum automation. This prompted Mehrotra and her team to invest heavily in artificial intelligence and machine learning.

Five years later, the startup has so far raised $ 35 million from reputable investors such as Eight Roads Ventures (Fidelity), Chiratae Ventures (IDG) and has raised nearly $ 85 million in debt to develop its lending activity. He raised $ 10 million in a Series C round in October of last year.

Break the skepticism

Although after building a strong backend team and relying on a top team, the company needs to convince customers to join it. Indians are skeptical when it comes to anything unorthodox, especially when it comes to money. For example, credit facilities have been in the system for a long time, but people still go into banks and wait days for loan approval.

However, Mehrotra believes that the current generation has a different outlook on life, which helps new loan businesses to thrive and gain more acceptance in the country. According to him, Generation Y and Generation Z who are gradually returning to the labor market have a different perception of the loan.

“It’s no longer about borrowing, but affordability. I can buy an iPhone because I can afford it with EMI, I can take INR 90,000 skills upgrade course in python ML because I want to improve my job prospects and it is powered by a mode monthly with lenders like EarlySalary.

He said people wanted quick cash like INR 25,000 for three weeks, instead of a loan worth INR 5 lakh, which will only bind the lender for the next three years by paying interest. . The startup is currently in competition with Slice, LoanTap, ZestMoney, MoneyTap among others.

Low delinquency

With easy access to loans, it becomes easy for a delinquent to default on a loan. However, Mehrotra claims that EarlySalary is leveraging AI, ML, and automation to fuel the platform’s risk engine and control delinquency.

Explaining that in a volatile market, lending activities need to be extremely agile, Mehrotra said EarlySalary follows a two-week scorecard schedule that allows the company to readjust risk and create and update. update the dashboard used in credit disbursement decisions. EarlySalary boasts of having a low default rate compared to traditional banks and other online lenders. The startup claims that because of its behavioral dashboard, it was able to keep and give 500% more money to existing customers at a third of delinquency.

Due to its strong technological infrastructure, the company was able to turn the risk model around and get 100% of the work from home systems when the contagious virus outbreak first hit the country in March 2020. It took off. took nearly nine days for the startup to restart its risk decision-making system in the night days and was able to not only continue to lend during times of COVID-19, but also offer a moratorium, financial assistance and relief to customers.

Future plans

EarlySalary currently has more than 0.5 million, helping nearly 80,000 users with credit decision making, disbursing nearly 75,000 loans. Apart from that, the startup also handles EMI payments from a few lakh clients each month worth INR 150 crore each month.

“Our current growth objective is based on three pillars: having all the products to help us grow with the customer, from cash to credit to cards, increasing our customer acquisition by 500% and doubling our size. every six months. We want to make sure that EarlySalary is a valued brand, a product offering that anyone can access, ”he added.