In a country like India, where finance is quite fragmented, hard to access, and inundated with processes and paperwork, BNPL (buy now pay later) positions itself as a hassle-free, ready-to-use product — and it has been well-received, especially in lower-tier cities and rural areas, where formal financing is no better than a pipedream.
These are small-ticket loans that power online and offline purchases mostly via apps that function much like a Paytm or a PhonePe when it comes to making instant payments.
Several startups, including LazyPay, Simpl, ZestMoney, and ePayLater, operating in this space have, essentially, changed the way credit works in India.
Image credit: YourStory
In the last 18 months, online shopping has seen a spike, mostly from lower-tier cities as people took to the internet to order groceries, other essentials, clothes, utility items, and more amid the pandemic.
On the flipside, layoffs, a tight employment market, salary cuts, and suspension of increments has added to people’s cost of living expenses — forcing them to consider credit options to stave some of the financial pressure off.
All this has resulted in strong demand for credit and BNPL players have been able to capture a lot of that market. Seeing the success, even traditional banks and ecommerce companies have launched their own BNPL plays. Read more.
Are you a fintech startup, banking professional, or fintech enthusiast looking to transform your business into a digital-first enterprise by 2025? Don’t miss out on the third episode of ‘Digirupt Finance: Conversations around Digital Innovations in Fintech’ by Comviva.
Editor’s Pick: Building an award-winning machine tools business
In the Waluj industrial area of Aurangabad sits a 6,000 sq metres manufacturing facility proudly displaying its name, Tool Tech Toolings, and greeting visitors with its lush greenery. Its shop floors are as spic and span as its manicured gardens in the front.
This is how Founder and Managing Director Sunil Kirdak had always visualised a world-class factory when he was in the process of building one. Read more.
Raising funds is a big challenge startup founders have to grapple with while building and growing their businesses, especially when it comes to discussions around equity cuts. Not wanting to part with a lot of control in their own companies leads to founders missing out on valuable funds and time they could have used to scale.
Enter revenue-based financing — a concept that is slowly taking the startup world by storm — where the funding company takes a small cut of a venture’s future revenue stream as a flat fee in exchange for growth funds. Mumbai-based GetVantage is one such company. Read more.
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“We don’t believe that people need to go to banks and take out heavy loans to finance their purchases. These can be financed instantly, at the checkout, using technology and data intelligence. This is exactly what we have envisioned to build ZestMoney.”