Here's Why This Start-up is 'Cashe'ing in on Millennials This start-up's unique algorithm can predict the behaviour of millennials towards credit

Young salaried professionals often find it difficult to make ends meet and as a result are always living in the worry of paying off bills on time. But fintech players are recognizing this need and leading the race to do away with the worries of millennials is CASHe. Founded by veteran investor and entrepreneur V. Raman Kumar, CASHe has over 2 million downloads, has given loans to 70,000 people for Rs 400 crores.

The Need for Credit As he juggled with the idea of CASHe, Kumar looked at the credit business in India and worldwide. He realized that the idea of credit is linked to credit rating and invariably, if the credit rating bureau does not give a number which is supposed to be the qualifying number as per the financial institutions, then people just don't get any loans. But there was another thing – most young people do not have a prior credit history. "For someone who comes in fresh into the job market, there's hardly any credit history," he says. Kumar believed that they needed to give a fresh look to this business as he knew he didn't want to go about predicting the credit rating for the entire population. "Rather we wanted to look at a segment that is fairly uniform in nature – that's why we looked at the millennials. They have common traits not just in India but across the world. By the time they matured, the internet too had matured. It's easy to look at their footprint," he informs.

Creating the SLQ

Thus, came about the idea of creating the SLQ or Social Loan Quotient for millennials. Their idea was to build an algorithm that predicts the behaviour of millennials towards credit. By virtue of that, they could expand the credit rating from the conventional way in which agencies did. "SLQ is our yardstick to measure the creditworthiness of people. Anybody who comes into the CASHe platform will see his/her score," says Kumar.

Blind Loans For Data

A big challenge they faced while starting up was the missing data for millennials. "Primarily because the kids we are dealing with have no credit cards, no prior loan history. In order to create history for them, we had to start giving loans. So we gave blind loans to people," he asserts. When they officially launched in 2017, their delinquencies were 10-11 per cent and have now come down to 1 per cent. However, through their journey, they have been able to debunk myths about millennials. People believe millennials are only borrowing money to spend. "We found that 20 per cent of loan seekers were people who had emergencies. We are able to bridge the gap to ensure that these millennials are able to pay off the bills and are up to date on their payments," he adds.

The Investor And Entrepreneur

Kumar is not new to entrepreneurship. Having built technology companies earlier, he started CASHe at 57. As an investor in various start-ups, Kumar funded his own start-up in the beginning. "I didn't have to dilute my business for investors who probably didn't even understand the concept. Having led a technology company, I had a tech team too ready to work on advanced technological solutions," he concludes.