[00:00:00]
Introduction to Underwriting Process
We are not completely reinventing the wheel. We follow the standard underwriting process on credit history. We have different surrogate programs. So either based on the credit history or based on the employment type, it's a homeowner, then we might not ask for too many documents and give an instant decision, just purely based like within two, three minutes.
So we have our in house rule engine, which makes a decision. That would be about like 40 percent of cases, 60 percent of cases then goes to a credit manager who do a quick review. But I would say the secret sauce comes from this one purpose driven underwriting. So we are better able to understand based on the situation of the customer and based on what they're going for.
Welcome and Podcast Overview
Monica Millares: Hi, Aditya. It's a pleasure having you in the show. Thank you so much for your time.
Aditya Damani: Thanks, Bonnie. Excited to be here.
Monica Millares: This podcast is all [00:01:00] about how can we build better FinTech such that we can have more impact as such. So we ask ourselves questions like how can we add more value to customers? How are, why are we solving the relevant problems? How can we use tech and the FinTech ecosystem for good and questions that basically lead to impact.
Building Purpose-Driven FinTechs
Monica Millares: So to get started, in your opinion, how can we build more purpose driven FinTechs?
Aditya Damani: We need the right DNA in terms of Finante. I think the first wave of FinTech was a lot more focused on tech. You had that move fast and break things. The Facebook quote and Mark Zuckerberg's quote, and, somewhere I think there was too much of a focus on growth and not enough focus on impact on the end user impact that might be happening. Not enough focus on regulation on [00:02:00] compliance. I think that pendulum needs to come somewhere in the middle and just balance out.
Monica Millares: Definitely. So specific to you.
Fair Finance and Credit Access in India
Monica Millares: So you have these, it's not just a phrase these ethos that it's like fair finance to everyone. And I love it. What does that mean?
Aditya Damani: Yes, fair finance to us means the right amount of credit at the right cost at the right time. If you put in terms of actionable insights and in terms of credit. There's also the right deployment of money as an investor again, at the right time and for the right risk. We are doing both sides, today when we started, we were only lending from our balance sheet as a registered lender with the RBI. Now we [00:03:00] have got one more license where we can facilitate peer to peer lending. So initially we wanted to make sure that we can deliver every deserving Indian should get access to credit. I think it's still a long way to go. It's such a big market and such a big problem. I don't think we've made enough of it in, but I'm hoping over the next five or 10 years, we can get to that level where, yeah, that we can solve at least some. good part of this problem,
Monica Millares: Yes. And then just for Background before we, deep dive into the problem and such, but just as background for anyone who's listening, Aditya and I met many years ago when we were both working in Tandem Bank. So this is like when Tandem was just getting started, right? So both of us were pioneers when it comes to the FinTech kind of scene.
And then you went and did multiple stuff. And then you [00:04:00] became a founder, which is amazing, right? I'm, still not a founder. So I admired that in you.
Aditya's Journey and Founding Creditor
Monica Millares: So what as a founder, like having worked in the industry in FinTech and with the experience that you have, what was your hypothesis behind starting Creditor?
Aditya Damani: Yes. So there was, two problems which I faced myself. One is as a new to credit person in the UK where we met, I saw that actually opening a bank account or something was fine. Getting a credit card also something I could avail despite being a foreign national in, in the UK. But in India, actually, it was harder for me to get a credit card. And I realized that despite everything that's happening, like only 4 percent [00:05:00] of Indians have a credit card today. It just made me realize that there's still so much more to be done. Secondly, I worked at this small lender called Okan after my MBA at London Business School.
So there we saw that the Romanian Polish immigrants who are new to credit in the UK were performing a lot better than a lot of the British borrowers actually.
So I realized that I should move back to India and become a founder because the whole financial inclusion new to credit segment is it's, a lot more in India. And yeah, and I, guess actually there's a third aspect again, maybe from a personal perspective, my family's been in the financial markets for 35 years in the equity markets. And it was very easy for them to invest in equities, very easy to invest in real estate. But when it comes to fixed income or [00:06:00] like any alternative to a bank deposit there weren't many good options.
There weren't many trusted options. These are the sort of problems that I face myself. And then I felt like why not build something which would for me and then hopefully work for millions of other Indians.
Monica Millares: Definitely. And then especially with India being such a large population and
On their banks and on banks, like both
Impact of FinTech on Financial Inclusion
Monica Millares: Which that leads me back to impact before we move on fully into you, like, when it comes to impact and we're talking about people living in financial stress. India is a huge part of our population, but if we look at it worldwide BCG did a report in 2023.
Where they say that over three quarters of adults remain either unbanked or underbanked, which is insane [00:07:00] given all the technology that we have today. So this is a very relevant question for us as skin techers to explore, which is how are you as credit fair actually having impact on customers' financial lives?
How are you actually helping them?
Aditya Damani: There's multiple aspects. About 25 percent of our customers never had a credit history. And we saw that after taking a loan from credit fair, like they built a good score. And, then they were able to avail more loans or more options after getting into the credit system. But we believe in responsible lending and outcome driven lending. We don't just wait for someone's credit score to improve. Like we think that's great. And that's a good benefit we can deliver. We look for even more ROI on our on our business. We believe in ESG lending except that our [00:08:00] version of ESG is earning savings and growth
For the average for the average Indian. So how do we help an Indian earn more money? We give loans for upskilling courses. So these are young professionals who, would not be able to pay for that course upfront. They would need credit. And like I said, they don't have a credit card, they don't have easy access or timely access to credit.
Maybe they might have to leave work and spend like a few days at the bank to get a loan and we can help them access that course at a click of a button. A lot of our loans are for this someone like wants to do a data science course, a digital marketing course. And after that, they get a better job.
They get a better income at the same job. So that's the type of impact. We're already delivering. There are. Nearly 18, 000 students we've helped, upskill with the loans that we provided. Similarly [00:09:00] we are having a green impact as well from our work. We are giving loans for rooftop solar and we've served over 3, 000 customers there. So that's leading to over 100, 000 pounds of monthly electricity bill savings. every month that our customers are getting already. And they're looking to grow this by another five, 10 X in the next year. These are the different examples of impact that we're doing.
And we're very happy with the type of, in carbon dioxide savings also that are happening because of the solar rooftop.
Monica Millares: That's awesome, because it's very purpose driven lending as
Aditya Damani: Yeah,
Monica Millares: cases are very
purpose driven. It's education or on
Side as such.
Aditya Damani: yeah. There's some work we've done on healthcare as well. But and MSME sector, but that's a smaller part of our [00:10:00] business.
Monica Millares: Okay.
Challenges and Opportunities in Indian Credit Market
Monica Millares: You mentioned that you want to grow 5 times to 10 times in the, coming years as such. 1 of my. Things that keeps me awake at night is we as an industry, as FinTechers, we've been around for roughly 10 years, right? Roughly
speaking,
however, the, we, and we've had a lot of impact in customer life.
I think we have. However, the problem statement has also grown
The people suffering with financial stress has grown and cost of living has grown. So I believe if we continue doing what we're doing right now, we will have incremental impact in people's lives.
What do we need to be doing today to have five times, 10 times impact?
In 3, 5, 10 years [00:11:00] time, rather than just another 10 years of
Aditya Damani: Yeah.
Monica Millares: Yeah
Aditya Damani: In terms of impact it's It's did you really change the lifestyle of someone? And yeah in, India it's did we, have a step change on the family is the way we would look at it. So in the case of education, like I mentioned, we've seen many customers who are like farmers or they come from a very small village or city small in India. And let's say the the father or the household income would be only about one 50 to 200. Pounds a month. But then because we were able to finance them for a course and then they are able to own so the, son would be earning basically double, or the child, like the son or daughter would be earning double the income of what the dad would be.
And that's [00:12:00] just out of college. So then you can see a step change happening right in that family that the household income in a way has crippled from what it was before. And there are two earning members, so now they can actually think about the next thing because until then it's just about survival.
Actually, FinTech cannot really do that much. Frankly, only the government can help that type of customer. But now that the income has grown, so then the questions come, okay can I take because my future is bright, I can take a loan to invest in a house or I can save so much money and then get a better return and then plan for my wedding as a and not be a burden on my parents which is a big issue in India. Yeah, I think that's where, it's, The biggest problem, at least in the developing world would be how can we grow incomes faster [00:13:00] whatever we can do for that, like whether it's helping a small business or helping someone get a better job. And then that's what we have to focus on,
Monica Millares: yeah, I think you're spot on because. What I find lately in the past few years is. We can start building good money management habits, but at the end of the day, the key pain point ends up being, but I need more money.
And we're not talking about the, Oh, I need more money to go and travel the world. No, this
like
Aditya Damani: Yeah.
Monica Millares: of the month.
Need more money to pay for their bills.
Aditya Damani: Yeah.
Monica Millares: Helping people manage their money and grow their money, but it's
Aditya Damani: Yeah,
Monica Millares: more money?
Aditya Damani: Yeah. Yeah. I think from a developing world that is still the problem statement. Of course, for more [00:14:00] mature economies, then it's about the discipline as well. And the great thing is the technology infrastructure is evolving. Like the Indian government is enabling so much good data flow based on which we can actually try to help more people. For example there's something called account aggregator in India, where which is like open banking in the UK. So the data can seamlessly flow to us as a financial intermediary. And then we can nudge customers that, Hey why don't you cut spending here? Or why don't you invest more money in something which will give you a better return? So, the savings rate in India has fallen a bit, but it's still well over 15%. But the problem is that the money is often deployed on very, very risk of assets or, investments which are maybe missold as well. So I think that is also a problem that definitely needs to be solved.
Monica Millares: Definitely, so before we move on into going deeper [00:15:00] into your solution as such
just want to close. Okay. So we have the problem statement. How do we grow? How do we have 5 times or 10 times the impact? Then you gave us potential solutions. So if we were to say, let's stop looking at individual's fintechs as such.
What did we say as a collective? How do we know that we solved financial wellbeing and financial stress for everyone? What could be the KPIs that you're going to be like, these are the key metrics that we need to measure to, to ensure that we are tracking impact.
Aditya Damani: So that's a good question.
I think the KPIs should be, you'll have to look at like a control versus, like the, like a sample which you were able to drive. But it would be that how many people, are getting a better return on their, savings, right? So if you took the same cohort of [00:16:00] customer and you saw that FinTech as an industry were able to help so many people, whereas this other control sample just remained the same to me, that would be really powerful. And similarly if, some people didn't have access to loans from a FinTech industry versus some people who did what happened right to to their outcomes. Yeah, that's the way I would think of it.
Monica Millares: I love that last use case that it's a, Hey, you had access to credit and then you didn't, and then how
does change people's
lives?
Aditya Damani: exactly. Exactly.
Monica Millares: It's just like a research study piece where
Aditya Damani: So I think, that's, how I would look at it because it's very hard to say that. Okay. Just by. Making sure someone had a loan, like we achieve something until we actually measure that did that sustainably improve their, lives.
Monica Millares: the keyword is sustainably
and then [00:17:00] improve.
Aditya Damani: Yes, exactly.
Monica Millares: So if I think of India as such, India is huge and you guys have 1. 4 billion people.
Aditya Damani: Yes.
Monica Millares: However, access to credit is still a big issue. So out of those 1. 4 billion, 1 billion are adults as
such. But based on my understanding, chatting with you, we need to corroborate this with Mr.
Google,
Aditya Damani: Sure.
Monica Millares: Only out of that 1 billion adults, only 200 million have access to have a credit history.
Aditya Damani: Yes,
Monica Millares: That's bonkers. That is just
Aditya Damani: right,
Monica Millares: Insane. Expand, like, how did that happen? Why? Tell me more.
Aditya Damani: It's yeah. And this is after a breakneck growth after five years. Let's say [00:18:00] five years ago, it was 100 million people. Yeah this is like the trend is positive, but just there's so much ground to cover that it's going to take a while. This has happened a, because India was a very cash driven economy. So there was obviously finance, there was informal lending and formal borrowing. And there's a whole cash economy, which was never really recorded. Not happening through the banking system. Yeah, because of that, there was. very little penetration. Then the last 10, 20 years, there's been a big push towards cashless. The technology has made payments very simple. So then the next step was lending because without a formal flow of money lending formally could obviously not happen. And that's what you're seeing now that that 50 million, 100 million has become 200 to 50 million. And sure [00:19:00] over time that'll become half a billion Indians who have purchased it.
Monica Millares: So we could then extrapolate and say the impact of QR payments in development countries,
Aditya Damani: Yes.
Monica Millares: in developing countries
Basically moving away from cash, from a cash based society into
Aditya Damani: Yeah.
Monica Millares: Cashless society, therefore, we have records of people and those records allow us to
Aditya Damani: Absolutely.
Monica Millares: financial services.
Therefore, the impact is not just Oh, let's get everyone on QR.
It's the impact of having the data of that QR usage.
Aditya Damani: Absolutely.
Yeah. It's a building block. It's laying the foundation of a building, right? So you can only build on top unless if there's a strong foundation. I would not only talk about QR though the Indian government has done a lot in terms of KYC as well. So the entire stack for [00:20:00] KYC is like very easy, very seamless. In terms of collections as well there's direct debit infrastructure is very robust and very accessible. A lot of things have been done across a lot of different parts of the puzzle and now it's come together.
Monica Millares: Stacking up.
Aditya Damani: Exactly. Yes.
Credit Fair's Unique Value Proposition
Monica Millares: So now going deeper into credit fair as such. So we know that the problem statement is huge
Aditya Damani: Yes.
Monica Millares: there is 1 billion adults in India. Who do you serve? Because 1 billion people to say, Oh, people in so who are your
Aditya Damani: Yeah. Yeah, we're not looking to be everything for everybody. Right now our focus is on a millennial. So someone in the 25 to 35 age group is our prime target because they will be digitally [00:21:00] savvy and we are trying to do digital onboarding of customers. They would be less averse to debt. That's another reason why the penetration of credit history is also low because the older generation is actually quite averse to formal debt.
Monica Millares: Interesting.
Aditya Damani: Yeah, that's the other aspect and yeah, we go after people from the organized segments right now. We're not into the unorganized workforce, so these would be white collar or self employed people. Typically earning three, four hundred, dollars for like per month and, and the credit score is actually interestingly enough on average customers credit score is 760 or 900, which is a pretty prime.
Monica Millares: Good.
Aditya Damani: Yeah, so, yeah, our approach is point of sale driven. We have two sets of customers. One is the merchant partner [00:22:00] and then the end borrower. So we have to, that's how we we identify the point of sale to get our target audience.
Monica Millares: So then we've identified your audience, what's your unique value proposition for them because they have a good credit score.
Aditya Damani: Yeah,
Monica Millares: go to the bank.
Aditya Damani: yeah.
We offer something called a no cost EMI or 0 percent interest loans where the merchant partner so let's say a solar installer they bear the interest cost, which we deduct upfront and the customer doesn't pay the interest costs on top of the cost of the product. So because of that we actually are cheaper than a bank from their perspective because they they don't have to pay anything on the interest. One big USP for us. It's also about affordability. Many of these customers would not get approved by a bank.
Just the fact that we're giving access to credit. Itself is a, value [00:23:00] add and usually it's for, when someone is growing their income or saving money.
Again, for them, the cost that they are being to us might be very small compared to the benefit that they're getting.
Monica Millares: Yeah, I totally see that. It's Hey, the pricing and the accessibility as such. And then you're also focusing on. Very purpose specific,
Aditya Damani: yes,
Monica Millares: use cases as such.
Aditya Damani: Great.
Yeah.
Monica Millares: you just talked about basically accessibility. And then you say that you could give credit to people that could usually go to be rejected in a traditional bank as such.
How are you assessing creditworthiness? Is it like a a traditional way or what makes you give them credit and not a bank?
Aditya Damani: So we're not completely reinventing the wheel. We follow the standard underwriting process on the credit history. If so we have different surrogate programs. So either [00:24:00] based on the credit history or based on the employment type, if it's a homeowner then we might not ask for too many documents and give an instant decision just purely based like within two, three minutes. So we have our in house rule engine, which makes the decision that would be about like 40 percent of cases. 60 percent of cases then goes to a credit manager who do a quick review. I would say the secret sauce comes from this whole purpose driven underwriting. So we are better able to understand based on the situation of the customer and based on what they're going for would that loan make sense or not? If I give you an example in education a student who's going for a data science course. has a very good credit history, but is an art student. They've never really done anything on data or math or coding before. We would be a little skeptical to approve their loan because they might [00:25:00] have a high chance of dropping out the cost and then not wanting to repay the loan. Whereas in someone who's coming from a poor background, but he's finished the engineering and then doing a data science course. We, know that they have a high chance of, getting a, like a good job. We would be happy to approve that. So these are the type of purpose and behavior driven insights based on which we would be, doing underwriting, which other people wouldn't be doing.
Monica Millares: I have many questions on the on Sure.
Understanding Lending Assumptions
Monica Millares: that. So basically we're using as an example,
a student that wants to continue their studies with, Data science, let's say. But for student A, the background is a poor background with an engineering degree. And then we, based on that, we assume that they have more likelihood to finish their studies, therefore we will lend them.
But
Aditya Damani: [00:26:00] Yeah.
Monica Millares: a student with, we said an arts background
Aditya Damani: let's say they did painting for example. Yeah.
Monica Millares: And then based on that background, we assume that it's likely they will not finish the program.
Aditya Damani: Yes.
Monica Millares: Hence, they will not finish paying. That, that's very interesting. What makes me make those, assumptions based on my background?
Aditya Damani: Yeah, based on the experience we've seen on the ground.
Intention vs. Ability to Repay
Aditya Damani: So the intention to repay is basically what we value as much, or if not more than the ability to repay, which is what I was trying to highlight. And this is those are the two basics of lending. These are the different proxies for intention to repay, which we have a better understanding of.
Monica Millares: Okay, just to go a bit deeper and for my understanding as well. So
Aditya Damani: Yeah.
Monica Millares: intention to repay and ability to repay.
Aditya Damani: Yes.
Monica Millares: to repay is basically I have an income. Minus my expenses and I have my extra [00:27:00] money and then I have ability to repay.
How do we measure my intent, intention to repay?
Aditya Damani: Yeah. Yeah. There's the credit history. We have a demonstrated track record, of course, which shows your intention to repay. And we assume that should continue. And, then these behavioral factors, like I mentioned, like what is your past background while you're doing this specific purchase and what will you get out of that purchase? So if that is completely aligned, then your intention to repay will also be much higher.
Monica Millares: Interesting. So I think you're already doing this because my assumption is a traditional bank would not assess credit the way that you're doing this.
Aditya Damani: Yeah they wouldn't know.
Monica Millares: So if we take you as an example, as a pioneer.
And then we have a country as [00:28:00] large as India with, 1 billion for only 200 million have access to credit.
Aditya Damani: Yeah,
Monica Millares: That is telling me that India as a market is ready for disruption when it
Aditya Damani: right.
Monica Millares: the lending market as such. So if
Aditya Damani: Yeah,
Monica Millares: to build on what you have basically explained to us, Yeah.
Aditya Damani: right.
Monica Millares: And we take it at an India level rather than just at a credit card level.
Aditya Damani: Yes.
Monica Millares: would you go about building alternative credit risk models such that more people have access to lending?
Alternative Credit Risk Models
Aditya Damani: So one is I just gave you an example of education, but there are like hundreds or thousands of other use cases, for which for purchase. So we're doing purchase financing in banking terms, but making a high value product or service accessible with credit is the ultimate goal.
So that's where now with rooftop solar, like what unique insights [00:29:00] do we have on the rooftop solar market, which helps us underwrite and facilitate credit at the point of sale very quickly compared to a traditional end up and then there are a bunch of other segments, which still need to be figured out. And then it's also on the other side. Sorry. Just one more point. Let's say the installer of the solar panels, right? They also need credit. They also have other problems, which finance needs to solve. So how can we address both sides to really help that industry and help India as a country?
Monica Millares: I like that because you're looking at it as an ecosystem. It's not just
consumer lending, but you the, if there's a purchase, therefore they are going to buy from someone, but
Aditya Damani: Yeah.
Monica Millares: is also a
Aditya Damani: Yeah.
Exactly. Exactly.
Monica Millares: helping both sides of the.
Aditya Damani: Yeah.
Monica Millares: That it's [00:30:00] partly what you're doing, right?
Because
Aditya Damani: So that is exactly what we're doing.
I can tell you from the solutions of the approach that I have, course, at a very big India level, the government, a lot of the large, bodies are doing a lot of work as well to solve this credit issue. I can, of course tell you more about that as well, if there is interest. But yeah, I think laying the right infrastructure. So it's, you lay the highways, but then you need the cars, you need the cities, you need like the McDonald's along the way to really transform the country. So I think the government has done a good job of laying the highways and the digital public infrastructure. And now like people like us need to take advantage of that and solve a lot of niche Problems along the
Monica Millares: So if I were to build on that, we're saying there's a saying in the industry that it's easy to grow a lending business, e. g. it's
Aditya Damani: way. [00:31:00] Great.
Monica Millares: acquire customers because
Aditya Damani: Yes,
Monica Millares: giving out money. Everyone
Like
Money. It's not
Aditya Damani: Yeah.
Monica Millares: everybody wants extra money. That's easy to sell.
Aditya Damani: Yes,
Monica Millares: the challenge of a lending business is that money,
Aditya Damani: absolutely.
Monica Millares: customers to Back. What have you found helped to get that money back? What measures do you have in place?
Challenges in Collections
Aditya Damani: Yes , one is that whole intent to repay how, can we do that better? So we don't have to focus too as much on collections and we can identify the right borrowers before disbursement. So we focus a lot more on that, I would say, but of course there will be delinquencies, there will be issues. There again, we look at two types of borrowers one is like, where the intention is bad or one where they have a bad financial situation. So if the intention is an issue, like we start taking legal action we have agencies who would visit the home or we would [00:32:00] contact the employers and those would be the strategies we would employ, and if, the financial situation has worsened for the customer, then. We would work out some sort of settlement and just collect smaller amounts as compared to what they had to pay, every month. And a third way where we have a connection edge is also through the partners from where we're disbursing the loads. If it's an educational institute they will many times the customer stops paying, like I said, if they want to drop out of the course. Many of them would be then refunding the fees. To us to cover the loan as well. And for or in rooftop solar. For example, if the panels are not working properly and the person is the end customer's not saving enough money on the electricity bills, then that would be covered by the installer as well. Or we can resell the panels to recover some of our loans. So these are the different collection techniques?
Monica Millares: Interesting. I'm [00:33:00] not an expert in lending, but it's very curious to be like, Oh, cool. Yeah. It's all these in anything, right? Like you
Aditya Damani: Yes.
Monica Millares: find the problem statement and then go use case by use case and start
Aditya Damani: Yes.
Monica Millares: the solutions as such. as you were talking, what was coming through my mind, and we were talking about collections,
Aditya Damani: Right?
Monica Millares: of AI is here to stay.
Aditya Damani: Yes.
The Role of AI in Lending
Monica Millares: What's going to be the role of AI in this process in the next two to five years?
Aditya Damani: It's hard for me to visualize the future because AI is changing so fast. What I have seen already though, is that we have AI driven callers who are like good or very close to human life. For example, let's say, you're the borrower and my AI will call you.
You might not realize that it's AI on the other end and it's not a human, it's getting that realistic.
The collection efficiency and like the cost of collections can really [00:34:00] come down because I don't need to hire a hundred callers to chase like 10, 000 borrowers. I might need only five or 10 and 90 percent of the borders can be handled with my AI machine. So, yeah it's, very interesting how the AI corner will understand the context and understand your tone of voice, understand the words, and then figure out like what to reply to you.
Monica Millares: That is cool.
Aditya Damani: Yeah. So that's already happening. So I don't know what's going to happen in three to five years.
Monica Millares: Oh, wow. So if that is already happening, so basically we just need to move our act together. And basically if we start implementing that as a use case, like you say, it reduces cost of collections. And then
Aditya Damani: Yeah.
Monica Millares: lending is people not paying back. But then if we can reduce that risk at a
Aditya Damani: Great. Exactly. Exactly.
Monica Millares: a win for everyone
Aditya Damani: [00:35:00] absolutely.
Absolutely. Next. No worries.
Monica Millares: So for us to continue innovating in AI, sorry, in for us to continue innovating in lending,
Aditya Damani: Yes.
Monica Millares: what are the things that we need to ask ourselves? That's a tough question.
Aditya Damani: Yeah. From the ground level, I can talk about India. I'm not sure of the rest of the world. I think earlier, the regulators were completely hands off and now they've become very hands on and it is. These two settle a bit in the middle, because there's a lot of volatility happening.
There's a lot of policies and there's a lot of fear basically of unsecured lending, fear of lending which might be justified in some pockets, but maybe not on average. Yeah, if you need a financial inclusion to be solved it won't happen from the traditional institutions. We will require new companies and those new companies will [00:36:00] require some support from the government. So I think there is a lot of support, but I'm just worried that the regulators are getting a bit too worried about Fintech. So I think that balance is somewhere required. And the others a bit more on the macroeconomics because interest rates have been rising around the world. The cost of money is really going up everywhere. Inflation is going up a lot. Yeah, the more that can be controlled, the more inflation and interest rates can be more benign. Then I think FinTech and financial inclusion can really blossom.
Sure.
Monica Millares: I like that. I like this conversation a
Aditya Damani: Likewise. Yeah.
Balancing Growth and Sustainability
Monica Millares: now I want to move away from lending and think more about you as a founder, as an entrepreneur, as such,
so that we get to understand the person behind all
Aditya Damani: Yeah, sure. [00:37:00]
Monica Millares: I want to start with what is the strategic question in your mind that keeps bugging you all the time?
Aditya Damani: So where am I going to raise the next round from.
Monica Millares: Yeah.
Aditya Damani: No, I think what bugs me not all the time, but whenever I actually, I'm able to say, Is that the goal I had set for the company and for myself was helping 1 million Indians improve their finances, in 5 odd years. We are 5 years in, but we've helped maybe 78 percent of that. How can in the next two, three years I get to that target? That, that's what, keeps coming back to me. How can I maybe step it up a bit more?
Monica Millares: That's a good question. That's a really good question.
Aditya Damani: Yeah. Yeah. Yeah, that, that's that's something that keeps coming back to me.
Monica Millares: Good. So then maybe this is related to what I was about to ask that is an entrepreneur is a roller coaster.
Aditya Damani: Yes.
Monica Millares: We can be sitting in front of this podcast saying, ah, we look great, but people don't know what we went through [00:38:00] today.
Aditya Damani: Okay.
Monica Millares: And every, entrepreneurial journey has
Aditya Damani: Yes.
Monica Millares: own ups and downs.
So how do, how have you managed the resilience and the positivity and like the character building traits
In these roller coaster?
Aditya Damani: So I think, like you just have so many, things, there are so many important things you want to solve. And like even if you face problems, you just keep focusing on the main issues. What, keeps me motivated is, the problem statement I mentioned, getting to that impact of 1 million Indians. Now we have a team of about 130 people actually. Whatever said and done, you're like, okay you've got to take care of the team. And, the if, I'm a negative, then that just seeps throughout the organization and that's counterproductive. Yeah, you've got to make sure that whatever negativity you have, then with your co founder, you can discuss and resolve as compared to [00:39:00] putting it out there for the entire company. yeah I think maybe I don't know there are problems, but somehow I, guess I feel like we've been lucky that we've had a very strong, stable foundation and then we're building on it. Don't, get too worried about any problems because. The worst that will happen is that maybe we won't grow as much as we targeted for a few months, but eventually we'll get to the goal.
So that's, I think that's what I keep reminding myself.
Monica Millares: I love it. Simplified us, eventually we will reach our goals.
It's yeah, just keep going. Eventually
Aditya Damani: Yeah.
Monica Millares: our goals.
Aditya Damani: Yeah.
Monica Millares: Yeah, that's a good one.
Aditya Damani: And we've seen that actually that like certain goals we might have taken that we were more conservative or, and, that's benefiting us now whereas a lot of the other players are not in the best shape, unfortunately. I think yeah, we've seen that over the long term things really do [00:40:00] work in your favor if you just keep going at it.
Monica Millares: I was about to ask that follow up question that it's you actually do sound very confident on the statement of, yeah, we may not grow that fast, but eventually we will hit our goals, but many. Many founders have the challenge of, we don't have the luxury of time
Aditya Damani: Yes.
Monica Millares: don't have that, we don't have the luxury of tons of fundraising.
So how do you balance that mindset of we will get there with the pressure of we won't because of fundraising.
Aditya Damani: Yeah, I think that's where I've been fortunate like I was saying that I have been lucky because at least I had enough capital to get to profitability. And so we've been profitable since 2019 and it's also a mindset, so that's what I meant, don't panic, like you'll get there. So I think it's important and I also chose like an industry chose a business model which can ensure that we [00:41:00] don't fail or we don't fold easily,
Monica Millares: I love that. I, was not aware of that, that
Aditya Damani: right.
Monica Millares: profitable already. That makes a
Aditya Damani: Yeah. Yeah. ,thank you. Yeah.
Monica Millares: that's like a genuine
congrats because it
Aditya Damani: no.
Monica Millares: takes a lot to reach to that
point.
Aditya Damani: Yeah, so I think we might not have chosen like the sexiest business model and everything, but ultimately we are making an impact. We are scaling well, sustainable. Yeah but it's, easy to get distracted and lose that as well.
Monica Millares: So the business model as such has been sustained up. It's been thought through the angle of being sustainable since the beginning.
Aditya Damani: Yes, absolutely.
Monica Millares: And
Aditya Damani: And yeah, if we don't, then it's very easy to make rash decisions and then not make the impact. So for example, like we, if we want to make a positive financial impact on the borrowers. [00:42:00] But then you also need to make revenue or like so many times those will be in contradiction to each other. So, yeah, we've tried to be on a very strong footing so that at least a core mission can be achieved of improving finances. Like for people at least, we should not spoil it for anyone
Monica Millares: Yeah. I'm totally loving this conversation. I could go on and on Like we were just having like coffee,
Aditya Damani: Yeah. Yeah. Absolutely.
Can talk about FinTech all day.
Yeah.
Monica Millares: exactly just to start wrapping things up.
Key Lessons for Entrepreneurs
Monica Millares: You've been in the business for a long time now. What if were to look back, what's one of your biggest lessons that you're like, Oh man,
Aditya Damani: Right.
Monica Millares: that was a big one. That's a
One.
really
Aditya Damani: say
Monica Millares: one. So
Aditya Damani: Two or three. One is that we've been regulated, but, still I've seen a lot of companies being on the [00:43:00] wrong side of the regulator. And it is at least in India, like I definitely feel, just being very conscious of not just the letter, but even the spirit of the regulator and being on their right side is like super important. That is my lesson that, don't, take a chance there. That's not worth the risk. Secondly, yeah, I think in terms of fundraising, in terms of capital providers it's, like you said, most founders might not have the luxury of being picky, but I would say as much as possible, be picky because it is a marriage and like you need to be You need to have the right person by your side. If even if let's say they're not able to help you with the next round of funding, but at least they should not stop you or hinder your business or meddle too much. So I think being selective and finding the right [00:44:00] investor is also critical who would understand what you want to achieve and who would also be able to support you through that time period and, yeah, thirdly, I started off as a solo founder, but yeah, adding like co founder, adding that leadership team, that's, it's it's, It feels obvious, but when you're doing it it's actually not that easy to implement.
And that's super critical. So investing in your people, basically, before your growth happens, I would say that's a big learning for me as well.
Monica Millares: we're reaching to the end of the episode.
Aditya Damani: Yes.
Monica Millares: So this is one of my favorite questions that I ask every single guest. If you were to change one thing, it's only one thing in FinTech to make the industry better for customers, colleagues, and shareholders, what would you change?
Improving Customer Centricity in FinTech
Aditya Damani: Yeah, I think the customer centricity is still not like where it can be. There's too much jargon. There's too much lingo. There's still too much influence of [00:45:00] like a banker across the industry. Despite it being FinTech and trying to disrupt that, so I think in terms of customer centricity or having the right balance that people are only customer centric or people only compliance centric, having that right balance is very difficult.
And I think we need more of that across all the people in the industry.
Monica Millares: So I'll summarize that as double down on customer centricity while keeping the balance with compliance and commercial.
Aditya Damani: Yes, exactly. Exactly. So 3 C's, you could say
Monica Millares: The three C's,
Aditya Damani: yeah, customer compliance, balancing all 3 together. Somehow. Yeah,
Monica Millares: Remember?
Cool. Aditya, it's been an absolute pleasure having you in the show.
Thank you so much.
Aditya Damani: Thank you money. Yeah. See, you have a good night.
Monica Millares: Yes. Thank you everyone. See you next week.
[00:46:00]