FatakPay, Ensuring “Employee Financial Well-Being” with Timely Credit Availability: Abhishek Gandhi, Co-Founder

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Fintechs – with the use of technology and process innovation – are trying to provide last mile credit in an easy and hassle-free way, from the comfort of their homes and in the language of their choice. To learn more about the development of various financial solutions in the Fintech sector, Srajan Agarwal of Elets Information Network (ENN) had a conversation with Abishek Gandhico-founder, Fatak Pay.

What is the central idea of ​​FatakPay? And on which platform FatakPay is currently working?

A large percentage of our population earns less than 2.4 to 3 liters per year and is not the targeted segment of the organized lending fraternity. This segment is constantly besieged by various financial difficulties and lacks awareness on how to achieve their financial goals. Inflation, the pandemic, the loss of jobs have also aggravated the financial tensions, which currently constitute important obstacles for the middle class and the lower middle class.

One of the main challenges for them is access to credit in a holistic way, which Fatakpay seeks to solve. FatakPay is focused on promoting financial inclusion by creating an employee financial wellness platform that allows an employee to access credit in a timely manner to meet their daily needs and raise awareness about the financial discipline and planning, among others.

Why do you think it is necessary to have a multilingual approach for Fintech organizations?

Today is the era of SMART clients. Bank account penetration, Aadhaar linkage, mobile internet access supported exponential digitization further catalyzed by demonetization, COVID and UPI penetration. Today’s Bharats, although not having technological challenges, are extremely diverse and prefer to transact in the language of their choice.

According to CEO of Niti Aayog, fintech companies risk alienating the public and faltering if they ignore India’s diverse set of languages ​​and dialects while helping to increase the coverage of formal financial services. Engaging with users in their local language, in a way that respects them and their culture, is an important first step when dealing with a first-time digital customer. The vernacular is key to inclusion, deepening engagement, and building trust, and therefore cornerstones for fintech organizations like ours.

You develop various financial solutions in the Fintech sector. What challenges does FatakPay see in Fintech development compared to traditional development?

Traditional bank-led financial solutions models have struggled both in terms of access and ability to serve the common man. They require traditional data points for credit underwriting which, to a large extent, are completely lacking for this segment. Additionally, manual processes, excessive paperwork, physical presence, and time taken to make decisions intimidate this customer segment and drive them away to extremely expensive but at least more accessible sources.

In addition, the small size of loan tickets, lack of documentation, collection difficulties, etc. make them non-profit for traditional players. Fintechs – with the use of technology and process innovation – are trying to provide last mile credit in an easy and hassle-free way, from the comfort of their homes and in the language of their choice. Fintechs, on the other hand, face stringent regulations in order not to get derailed and to pay adequate attention to governance and consumer protection. This, while important, also stifles innovation.

What specific target group is FatakPay currently focusing on?

In the invisible credit 50-55 crore or people who do not have access to formal credit, we have segmented them into around 20 crore people who are employed in various segments like construction, retail, logistics, manufacturing, etc. Next, we also looked at the issues that employers of a very large workforce face, i.e. retention.

For blue-collar workers, even an increase of 500 to 1,000 rupees is enough to make them change jobs. For employers, high attrition rates are becoming a major problem. There are many requests from these people for advance salaries. This segment lives paycheck to paycheck with little to no savings.

Any emergency or unrecorded expense can disrupt their lives. We partner with these companies and help them manage things like payday advance, attrition, working capital optimization, etc., and they use FatakPay as a benefits program, as a financial wellness program they can roll out for their employees. We are therefore currently working in a B2B2C model.

How bullish are you on the RBI’s decision on the co-lending model between banks and NBFCs?

The RBI has always taken very cautious steps for the improvement of the banking and financial services space. They are committed to supporting the innovative lending model for fintech companies while keeping consumer protection, fair practices and strong governance in mind. The main objective of the co-lending model is to improve the flow of credit to the unserved and undeserved sector of the economy and to make funds available at an affordable cost, given the lower cost of funds for banks. and the greater reach of NBFCs. While this is a step in the right direction, there is a huge disconnect between the current demand for credit from this segment and the penetration of traditional organizations such as NBFCs and banks. Fintechs, with their innovation and ability to evolve, play and will continue to play a key role in providing access to credit for this segment.

What new innovations are you implementing in your organization for the next 5 years?

Real India (average earners below 30,000 per month) will continue to be our top priority through our monthly line of credit, helping them bridge the payday gap. In addition, we intend to be the financial support system for this segment by offering a full range of financial products, including credit, savings, micro-mutuality and micro-insurance as they progress in their careers.

More importantly, Fatakpay will also allow them to establish credit scores and access the formal financial ecosystem, which would otherwise be extremely difficult for them. Increasing our product portfolio and wellness offerings in a quick, easy and personalized way will remain the thesis of innovation in our company.

How can virtual credit be used as an attrition management tool by employers in the organization?

The majority of low-to-middle income people who enter the workforce early face multiple financial challenges. Primarily, they have limited access to capital and resort to high cost lenders to support themselves.

Moreover, they hardly manage to meet their daily expenses and do not have significant savings and any unforeseen expenses (medical, household, education, etc.) create a lot of financial stress and force them into the trap of poverty again. indebtedness. Such financial stress has a direct impact on an employee’s work productivity, attrition and overall efficiency, the cost of all of which is borne indirectly by the employer.

The vision and mission of FatakPay is to solve the overall financial well-being of employees, which includes the timely availability of credit, education and awareness of the concept of small savings and investment for the future and security in terms of insurance and providing them with the same. We work closely with the employer and create an ecosystem for the financial well-being of employees through its offers. This resulted in decreased attrition and increased employee productivity.

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