Gold is a precious metal to possess, and it is also an asset for those in urgent need of money. But people are always worried about the social stigma attached to taking such loans as well as the security of their ornaments.
To solve these challenges, Ruptok Fintech, a New Delhi-based fintech startup, aims to remove the various pain points that any individual normally faces while securing a gold loan.
Founded in July 2020 by Ankur Gupta, Akshita Gupta, and Yashwardhan Aeren, Ruptok enables people to secure gold loan with minimal number of challenges. The startup got the idea when Ankur Gupta, during the first COVID-19 lockdown in 2020, was discussing with his extended family about the challenges associated with securing gold loans.
“There is a lot of social stigma associated with gold loans as people do not want others to know that they are raising money in this manner. Also, one is worried about the safety of their ornaments,” says Ankur.
Gaps in market
During their research, the co-founders found the entire process of securing a gold loan to be cumbersome. Typically, banks do not focus on small-ticket size loans. Apart from this, when there is an urgent requirement, there is a delay in providing the money, even though the interest rates are lower.
On the other hand, non-banking finance companies (NBFCs) provide gold loans in a shorter time frame, but the interest rates are higher — around 22-24 percent. In case of unorganised segment, these kind of loans can attract interest rate of up to 50 percent.
This led the co-founders to come up with a technology solution where they could take the gold ornaments and provide loan at the door step of the customers.
“We wanted to create a platform where one can get immediate loan at a reasonable interest rate and remove the pain points a customer faces while going to a bank,” says Ankur.
How it works?
Ruptok went about building a technology stack where the entire journey — from the moment a customer approaches their app to secure a gold loan, doing an audit, securing the ornaments, and providing the money — is digitalised to a great extent.
Ruptok’s loan securing process begins with the customer reaching out to them and Ruptok tells them what kind of jewellery they take, the documents that are needed, etc. Post that, the startup sends a person to visit the customers’ residence for the audit, KYC, and a digital agreement takes place to provide the gold loan.
To ensure the security of the gold ornaments and to rule out any misappropriation by the valuer who visits the customers’ location, Ruptok claims to have taken several security measures. The valuer is given the pincode and nearest landmark of the location. Post that, the individual is given the direction of the customer’s house, and if there is a deviation from that route, the startup gets an alert.
During this process, there is live streaming of the images and the gold ornaments are secured in tamper-proof packets. There is also a live audit done, which is also shared with the banks.
Ruptok has partnered with two financial institutions – Catholic Syrian Bank and FinCare Small Finance Bank – to provide gold loans, and has a profit sharing agreement with them. The startup leverages the funds and branches of the banks, while it brings in the logistics as well as technology.
“The interest rate we charge is between what a bank and NBFC charges,” says Ankur.
According to Ruptok co-founder, while they thought it would take about a year to achieve their internal target, they were surprised to see the market response as they reached their target within a few months.
“It took some time for the banks to get on-board with us, but now we are in the final stages of signing up some more financial institutions,” says Ankur.
The kind of customers who come onto the Ruptok platform are those who typically would not come under the CIBIL framework and seek small-ticket loans where the need is urgent. There are others who seek larger loans primarily to make capital purchases.
Ruptok today has assets under management of over Rs 60 crore within a year of operation with presence in Delhi, Mumbai, Jaipur, Vadodra, Surat, Pune, Nashik, and Hyderabad. It has plans to expand to 27 cities by the end of FY22.
The startup is backed by ABL Workspaces and has raised angel funding from Wurk, a Canada-based Investment Firm. It also secured debt funding of Rs 14 crore from Eclear Leasing & Finance.
The market and plans ahead
Ankur believes the gold loan market in India is big, with room for all kinds of participants.
According to the World Gold Council, the gold loan market is projected to growth at an annual rate of 15.7 per cent to reach Rs 4.617 lakh crore in FY22 from Rs 3.448 crore in FY20.
The USP of Ruptok is its technology framework where it enables financial institutions like banks or NBFCs to generate larger amount of business.
“This is a huge market and our biggest competition is the local pawnbroker. But our mission is to make the entire journey of getting a gold loan as comfortable as possible for the customer,” says Ankur.
The startup has also lined up plans to introduce newer products in the market like video KYC, digital wallet, etc., in the coming months.
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