Fintech Group 9 Assignment 2

InCred
Borrow.With Confidence

Mathew Varghese
Anku Rani
Umesh Karamchandani
Ayush Sharma
Ankit Saini
Fintech Group 9 Assignment 2

Index

INTRODUCTION 2
Personal loan 2
Education loan 2
SME loan 2
Two wheeler loan 2

Market 2
Current Business 2
Offerings 3
Future 3

Strengths 3
Customer Focused 3
Simple & Easy 3
Covers multiple loans 3
Heavily tech based 3

Weaknesses 4
Human in the loop 4
No physical offices 4
Many emerging new entrants 4

Threats: 4
Regulations 4
Increased Competition from Specialized NBFCs 4
Liquidity Pressure 4

Opportunities: 5
Setting up a micro-agent distribution strategy for D2C insurance in India. 5
Digital native full-stack solution. 5
Huge unserved market. 5
Lack of existing innovation in the area. 5
Software Eats Everything. 5

Recommendation 5
Fintech Group 9 Assignment 2

INTRODUCTION
Founded in 2016, by ex- Deutsche Bank executive, InCred Finance is a technology based
Non-Banking Financial Company (NBFC) in India. The company focuses on Consumer
Loan, Home Loan, Education Loan, and SME Lending.[2] It is headquartered in Mumbai,
Maharashtra.

Personal loan
It’s a 4 step process which consists of loan details, personal information, verification details
and loan offer. Amount a person can take a loan ranges from 1lac to 15 lac. They ask for
personal information and verification details after that. And offer a loan.

Education loan
Incred offers collateral free loan upto Rs 40 lakhs, instant sanction letter, upto 100% fees
and expense cover which eases out digital journey. First they check if you qualify for it in 2
simple steps. Asks you with some questions related to university, program and then
evaluates you.

SME loan
Incred offers 3 different types of loan under SME loan. Working capital loan, business loan
and channel loan. Working capital loan is given for 12 months to manage cash flows.
Business loan is given for 36 months for growth of your business. Channel finance loan is
given to increase your sales by financing your distributors and vendors.

Two wheeler loan

Incred provides a 2 wheeler loan that is given upto rupees 1 lac. An applicant doesn’t have
to provide income information, it also offers minimum down payments with a tenure of upto
36 months.

Market

Current Business
● Wealth management, Asset management, Capital markets, and Advisory
● Home Loan: Ranges between 3 to 30 lakhs with an interest rate of 11%
● Personal Loan: Ranges between 10 k to 5 lakhs (interest rate varies between 16 to
18 %)
● Business Loan: Ranges from 10 lakhs to 10 crores (interest rate varies between 13
to 14 %)
Fintech Group 9 Assignment 2

Offerings
● Client-led with a focus on value-added advisory rather than product pushing
● Full suite of products -- both in-house as well as a third-party -- including a range of
funds (portfolio management services or PMS, alternative investment funds) as well
as structured product offerings

Future
● Services such as succession planning, tax planning, and baking

Strengths

Customer Focused
● Loans catering to wide user needs
● Higher loan limits
● Flexible repayment options

Simple & Easy

● No branch visit required
● Instant loan sanction
● Online loan account management
● Easily navigable website

Covers multiple loans

● Personal Loans
● Education Loans
● SME loans
● Two wheeler loans

Heavily tech based

● Leverage customer data
● Score based customer analytics solution
Fintech Group 9 Assignment 2

Weaknesses

Human in the loop

● Although the loan is advertised as realtime, there is a human verification which
delays the loan sanction

No physical offices
● No physical offices means people with less exposure to technology will not get
access to the loan services provided by incred

Many emerging new entrants

● They have copied the strategy of other companies like HDFC credila for the loan
offering and the new fintechs have very similar offerings that makes it hard to
differentiate

Threats:

Regulations
As per the recent announcements by the RBI Governor, The regulations for the NBFC are
bound to increase and become more stringentThis may restrict their primary vision of
providing hassle -free and quick loans since a more stringent loan approval process will
have to be enforced.

Increased Competition from Specialized NBFCs

InCred faces competition from NBFCs like Leap Finance & Hero FinCorp which specialize in
sectors like Education & automobile financing. These NBFCs have become synonymous
with their sector participants since they offer a unique customer journey.

Liquidity Pressure
With the implosion of IL&FS and DHFL crisis, banks have become more reluctant to offer
capital to the NBFC who therefore have been restricted to offer loans to people who have no
financial history.
Fintech Group 9 Assignment 2

Opportunities:
Setting up a micro-agent distribution strategy for D2C insurance in India.
Reduces channel selling costs by 70-90% by going DTC with technology-enabled micro-agents.

Digital native full-stack solution.

100% digital technology platform. 50-80% operating cost advantage over the traditional insurance
company.

Huge unserved market.

The average insurance premium in India today is $500 annually which only the top 10% can afford.
The next 150M Indian households could afford a $50 annual premium opening up a $7.5B market in
India alone.

Lack of existing innovation in the area.

Banks currently rely on spreadsheets, manual workflows, and management expertise to manage
these loans.

Software Eats Everything.

Software eats a legacy industry by fundamentally disrupting the economics, delivering higher value at
less cost. This is exactly how Incred can achieve wins from a platform first strategy. Example:
automate contractual compliance and create transparency throughout the loan life cycle for
infrastructure projects. An automated loan and risk management data platform for can help originate,
service and securitize loans and investments seamlessly

Recommendation
The insurance industry is structurally inefficient in 2 major cost areas that constitute 40-80% of the
revenue of the product: Sales channel (how the customer becomes aware of the product, buys it, and
takes delivery) and Operations (handling claims, detecting fraud, etc.). Turns software excels at
efficiency in these 2 areas. In America, insurance has already seen its share of digitally native
disruptors. India is just beginning to see theirs.