Improving credit delivery in India

Improving credit delivery in India

Fintech 35

Ribbit Capital and Omidyar Network funded ZestMoney is a technology company that facilitates EMI payment option for products purchased online or offline through its partner merchants without the need for a credit card.

Lizzie Chapman, Co-Founder and CEO, Zest Money

Instant digital lending. That’s the buzzword that keeps Lizzie Chapman, co-founder of Zest Money, on her toes.  “There is a huge percentage of  the population in India that doesn’t have access to credit, as it is impossible to score credit worthiness using traditional methods,” says Chapman. And this thought brought together Chapman, Priya Sharma and Ashish Anantharaman to set up Zest Money in 2015 in Bengaluru. The company aims to use technology and data science to improve the way credit is delivered in India.

Solving the real financial problem

“We believe that there is a gap in the transactional credit side,” opines Chapman. Explaining this further, she says, “Traditional credit bureaus are reassessing the credit worthiness of the same people. In fact, traditional financial services companies do not have the expertise, technology, time and alternative ways of assessing credit worthiness of the mid-market consumer.” This effectively means there is an opportunity for fintech companies to understand the specific behaviour of this segment, especially those who don’t have employment history or are self-employed etc. Banks find it almost impossible to lend to this segment, Zest Money believes that using technology one can create models and project the credit worthiness of this population.  Effectively, it aids lending decisions based on alternative data sources, enabling lenders to reach a wider market, as well as make decisions quicker and without manual underwriting.

“If you need massive digital adoption, there has to be a quick repayment method  in the digital context.”

Not just this, the CEO of ZestMoney believes that credit cards do not really exist in India in the way it does in the rest of the world. It is used to get loyalty points and not really a financing solution. And so, targeting those who really need the financing solution, the company has created an equivalent to the EMI concept available in the offline world.  And so, the company partners with e-commerce companies to create a check out solution for the merchants. Hence, it facilitates EMI payment options for products purchased online or offline with its partner merchants without the need for credit card. It works with over 12 merchants including, juspay,, chillr and Zefo.

Challenges galore

Consumer education is one of the most prominent challenges that the company is facing in the industry.  “Customers don’t understand a lot of concepts that we talk about and hence, user adoption is difficult. We have to spend time and money in communicating with them so that they understand us,” says Chapman. The company also has to work on simplifying its message to its customers.

What ZestMoney has to permanently watch out for is the identity of a person and how it can map it to the entire digital footprint of that individual. “It is possible for people to have multiple identities in the online context. This means that our identity connect solution has to track this while working with a customer,” says she.

Path ahead

The pace of change over the last five years  in the fintech space has been very dramatic and the growth going forward is expected to be even more magnificent.  “More specifically, the Indian ecosystem is fully backed by Government initiatives.  KYC is being approached and built with full support from the Ministry of Finance and the RBI,” adds Chapman.  Given her global experience, Chapman believes that the Indian market is advanced when compared to the rest of the world. “For example, the platform behind IMPS and UPI does not exist anywhere else in the world. And there is no other country that has 24/7 real time, instant and low cost payment infrastructure this sophisticated,” adds she, explaining why India has the most conducive environment to create financial products.  This, combined with user population that is advancing at a fast pace, is adding to the strong potential for fintech sector in India.

While the company is all set to capitalise on this potential, it doesn’t believe in aggressive marketing effort and targets consumer education. It also works with its partners to help them target their product to the right consumer and believes that partnership led approach to marketing is sustainable in the long run.

To aid its growth and expansion, the company raised funds to the tune US $ 1.7 million from Ribbit Capital (a US-based VC firm which invests in global fintech) and Mumbai-based Omidyar Network. Currently, the company is raising a fresh round of funds.

“Going forward, with a sharp focus on the digital online transactional credit space, we aim to create new channels and will be led by our customers,” says Chapman. “We aim to use data and technology to create specific financial products and for the next few years, as the market has a lot of demand, we are focussing on the Indian market,” adds she, on a concluding note.


Founders: Lizzie Chapman, Priya Sharma and Ashish Anantharaman


Concept: It is a technology company that gives instant EMIs to online customers, thereby enabling shoppers with no credit card history to shop as much as they want. 

Investors: Raised US $ 1.7 million from Ribbit Capital (a US-based VC firm which invests in global fintech companies) and Mumbai-based Omidyar Network.

Poornima Kavlekar has been associated with The Smart CEO since the time of launch and is the Consulting Editor of the magazine. She has been writing for almost 20 years on a cross section of topics including stocks and personal finance and now, on entrepreneurship and growth enterprises. She is a trained Yoga Teacher, an avid endurance Cyclist and a Veena player.

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