CXOToday has engaged in an exclusive interview with Aditya Damani, Founder and CEO, Credit Fair.
- Could you share your inspiration and the driving force that led to founding Credit Fair, specializing in consumer lending in India?
My inspiration to establish Credit Fair for consumer lending in India was a desire to create a meaningful impact in society, and drive financial inclusion. After gaining experience from prominent financial institutions like Credit Suisse and PIMCO in the US, and later at my family’s equity broking company — KM Global Financial Services — I realised the transformative power of microfinance on the ground. Having seen the positive impact it leaves on the lives of millions of people, I was compelled to shift my focus from serving a few wealthy clients to addressing the financial needs of the underserved. Thus, the vision for Credit Fair emerged as a commitment to bring about qualitative change in the lives of the underserved communities through timely and transparent consumer lending.
- What motivated you to venture into the fintech segment, specifically choosing to address the challenges in consumer lending?
The motivation to enter the fintech-startup segment, with a specific focus on consumer lending, originated from the realization that persistent challenges are still there in the financial landscape. Identifying the credit gap in the lives of half-a-billion people in India and the low credit card penetration among them, I believed that digital lending is the scalable solution to address this gap. The vision was not only to provide timely and affordable credit but also to offer secure funding through P2P lending, catering to the evolving needs of the investors. This motivation fuelled the founding of Credit Fair as a pioneering force in the consumer lending space. Further, we are also bullish on ESG lending, which is focused on priority sectors.
- In your perspective, what were the key issues in the market that you identified and aimed to resolve by the creation of Credit Fair?
The key issues I identified in the market were the significant credit gap existed among the underserved people in the country and the absence of suitable investment options for the growing affluent population. Through Credit Fair, I aimed to bridge these gaps by leveraging digital lending solutions. The platform was designed to provide the right amount of credit at the right cost and time, specifically tailored to the needs of the underserved. Additionally, the creation of secure portfolios through P2P lending was intended to offer suitable investment avenues, contributing to a more inclusive and dynamic financial ecosystem.
- In a highly competitive fintech space, what sets Credit Fair apart from other consumer lending platforms? How do you differentiate your services?
Credit Fair stands out in the competitive fintech landscape through its innovative B2B2C model. This model ensures a positive selection of borrowers by offering ‘No Cost EMIs’ and robust unit economics with minimal customer acquisition cost. Our focus on untapped sectors, higher approval rate, faster turnaround time, and low-interest cost differentiate us from other consumer lending platforms. The introduction of lead generation programs further sets us apart, enabling partners to acquire high-quality leads at a lower cost.
- How does Credit Fair navigate and adapt to regulatory changes in the digital lending space? What measures are in place to ensure compliance while maintaining agility?
Credit Fair prioritizes regulatory compliance from day one, having established its own NBFC to navigate and adapt to the regulatory changes. A culture of compliance is ingrained in the DNA of the organization. To counter fraud, we utilize a point-of-sale-based lending model and alternative data underwriting, resulting in minimal cases of defaults due to fraudulent practices. Robust risk management system, sufficient capital buffer, and a significant founder-shareholding further embolden us to maintain compliance while preserving agility.
- What is the long-term vision for Credit Fair? Do you have any plan for expansion or introduction of new services?
The long-term vision for Credit Fair revolves around sustainable growth, innovation, and leveraging new technologies. We remain agile and adaptable to the changing market scenarios. Our plans include exploring technologies like ‘no code platforms,’ IoT, AI, and ML to enhance credit decisions. Additionally, we aim to utilize the digital infrastructure laid out by the government to reach the underserved, and design more affordable financial products. In the future, there are opportunities for expansion. Green energy is an emerging segment where we give greater emphasis. We are also focused on financial inclusion in rural areas with ‘atta chakki’ financing (agri-related small-scale businesses), and e-rickshaw financing in urban areas.
- In what ways does Credit Fair contribute to financial inclusion, especially in the context of reaching out to the underserved or unbanked communities?
Credit Fair is committed to contribute to financial inclusion by addressing the credit gap for the underserved in India. Our alternative underwriting mechanism, which welcomes ‘new-to-credit’ individuals and those who have credit scores as low as 625, sets us apart. By consistently maintaining low default rates, despite having higher acceptance rates, we effectively underwrite borrowers, bringing financial access to those who need it most. Through our digital lending platform, we play a pivotal role in fostering inclusivity in the financial lending landscape and supporting the journey of the underserved and the unbanked communities.
