It’s almost month end and there are just five days left for your salary to get credited to your bank account. But you urgently need some cash to buy a birthday gift for a loved one or go out for dinner with friends. What do you in such times? Here, Early Salary comes to your aid. The Pune-based start-up gives small-term loans to salaried individuals via their app. Those who are using Early Salary can get the loan amount any time of the day. The amount is automatically deducted from your salary, the day it is credited.
Early Salary was founded by Akshay Mehrotra, Ashish Goyal, Vimal Saboo and Vivek Jain a year and a half ago. Telling us more about the short-term instant salary advance app, Mehrotra, CEO, Early Salary, says, “Imagine this: you have seven days left to get your salary and you suddenly need Rs 5,000. What do you do then? You can ask your parents or friends, but it is kind of embarrassing. You can approach your employers but the answer will be a ‘no’. If you approach the bank, they will take several days to pass the loan and if you withdraw money from your credit card, the rate of interest will be high. Each one of us has faced a similar problem sometime in our lives.”
Mehrotra says that the team focused on solving this problem by taking help of technology. “Of course there were certain problems involved like the cost of giving short-term loans can be expensive. Also, there is no data available for young people, so how do you give them money? So we took the help of technology. Young people have a social media presence and we grant loans only by looking at a customer’s non-traditional data (like Facebook account or the kind of friends he has). “The loan that we give is cheaper than other platforms and most of our customers get money in 10 minutes,” says Mehrotra.
He says that they have received 1.2 million downloads, 15,000 transactions a month, 80,000 total transactions and Rs 100 crore dispersal. “We do not meet our customers physically but because of technology, we know a lot about them. No bank will give credit to a 22-year-old working professional but high-end technology is making all this happen,” he says adding, “The first thing that we tell a customer is to sign up through their Facebook account so if they do not have an account, we do not give them loan. In fact the kind of friends you have on social networking site is one of the key factors to decide whether we grant you loan or not.”
Obviously, there are other forms of information and details that they need. “We also see how fidgety the person is while applying for loan on the app and the kind of chat they have with our customer care. All this is part of the risk management,” he says. Before starting the app, they collected data by interacting with hundreds of young people.
Mehrotra says that their focus is on young working professionals in the age group of 20-35 years. “We are tying up with several companies and they are also approaching us,” he adds.
Mehrotra further says that they are now looking at expanding the criteria like focusing on EMI options. “You can return the amount in three months and we are expanding to other cities as well. In addition to that, we are adding medical emergencies,” he shares.
Ask him what are some of the emergencies that youngsters want money for and he says, “Most people want money for their girlfriends. So if you do not have a partner, then there are less chances of us giving you loan. Shopping is another thing that youngsters spend on so we have tied up with Amazon. Mostly, people are need of cash on Friday evening or a long weekend,” he says before signing off.