Three years ago, Reshma Sakeen, 27, first submitted a common application for a home loan, in her name and her mother’s name, with one of the country’s known private banks.
But, it was turned down by her first point of contact, the bank executive, who said the bank did not usually provide loans in cases where the joint applicants were a mother (contributing part of the payment for the house) and working daughter. The reason: once the girl got married it would be a problem (the bank’s assumption).
The executive tried to persuade Reshma to apply for the loan individually, saying it will be easy to get her mother added as co-applicant later.
She followed the process as advised by the bank executive but, after loan approval, when she tried to get her mother added as co-applicant, she was told it couldn’t be done.
Therefore, for Reshma, the whole exercise was a waste because of a silly objection and wrong information by the bank executive, and she had to approach another bank for the loan which she needed with her mother as co-applicant.
She was also charged a non-refundable processing fee of Rs 11,000 by the bank.
Reshma is one of the many customers who face such struggles owing to miscommunication by bank executives.
Two years ago, Vipul Sharma, who has more than 15 years of experience with banks, along with Rajat Kumar, who also has over a decade of experience in the banking sector, observed that financial products are inherently complex so customers have to be guided properly through the processes. Many eligible customers often fail to get home loans because of the inefficiency of the ecosystem.
To address the problem, they decided to launch a platform which would set right the pain points by ensuring a consistent experience.
In March this year, Sharma and Kumar kickstarted Chqbook, a marketplace for financial products that brings banks and non-banking financial companies, distributors and customers onto a single platform. The platform takes help from its verified, trained and proactive experts.
“We ensure that customers choose the best provider without having to worry about the perceived customer responsiveness of the institution. We believe this empowers the customers and gives them the guarantee of making the right choice based on brand, interest rates, features, and fees rather than be swayed by customer support experience,” said Sharma, Cofounder and CEO, Chqbook.
Idea clicked with ecosystem
Talking about the need and demand for such platforms in the industry, Sharma boasted about the numbers that Chqbook clocked in a mere six-month period. “We have so far processed home loan applications worth over Rs 500 crore and plan to process Rs 1,500 crore by March 2019.”
Besides, the startup is also clocking revenue of Rs 2-3 lakh per month and expects it to reach Rs 10-15 lakh per month by the end of this year.
Probably impressed with its growth and ideas, Youwecan-backed Startup Buddy, Apurva Chamaria, vice-president and head of corporate marketing at HCL, Sachin Arora, ex-CTO of Myntra, Bharat Gupta, founder of Net Asset Consulting and Amit Manocha, private equity professional in Singapore decided to fund the startup.
Chqbook, which operates in four major cities – Delhi, Bengaluru, Mumbai and Chennai – and has over 400 experts on the platform, plans to deploy the funding to expand in over 50 cities, including tier II and III cities, and get on board 300 additional experts. It is also planning to include credit cards and personal loans in its products category.
Experts say fintech consists of lending, aggregation and savings platforms. The industry is still in its infancy in India, with only about 2-3 per cent of total transactions happening online.
However, the size is huge as loans and cards make a $90-billion industry per year and are growing at a compounded annual growth rate (CAGR) of 10-15 per cent. Online penetration is also doubling year-on-year and is expected to reach 15 per cent of the total market by 2025.
Some of the major players which hold the chunk of transactions are PaisaBazaar, BankBazaar, IndiaLends, and Coverfox, among other platforms which offer similar services.
Sharma further explained that considering that over 15 lakh credit cards get issued per year and less than 5 per cent of the population has a credit card, the growth expectation is explosive.
“In all personal finance product segments, customers are opting to research and apply online. With this movement towards online applications, there is a two-fold effect. The industry itself is growing at a 10-15 per cent CAGR while online is doubling each year – this presents a unique opportunity for marketplaces in the country to strengthen their products, build customer-centric models and deliver value at every step of the way.”