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FinTech firm True Balance to continue lending in rural India despite COVID crisis

Victor Choi, CEO, Balance Hero India

At a time when the top Indian NBFCs are shying away from engaging with the credit-starved rural consumers, Indo-Korean FinTech player True Balance is aggressively focussing and expanding its lending business in that market.

True Balance is operated by SoftBank-backed Balancehero India, which is a wholly-owned subsidiary of Balancehero Co. Ltd. Korea. The Gurugram-based FinTech firm, which received an NBFC license from the Indian central bank last year, plans to influx much need liquidity in the rural market even as the COVID-19 triggered pandemic caused a massive global socio-economic crisis. India, Asia’s third-largest economy, has been worst hit as the country went for a total lockdown in a bid to contain the spread of the COVID19 virus.

COVID19 was a double whammy for the country that was already facing a liquidity crisis since December 2018 and with the International Monetary Fund (IMF) slashing the economic growth to 1.9% from the previously estimated 5.8%, the situation has become grimmer. In a bid to revive the economy, the Indian government has announced some fiscal stimulus but lenders are being cautious, especially in the rural markets.

However, True Balance thinks this is the right opportunity to engage with the unbanked and uneducated rural consumers through a digital channel. There are over 4000 NBFCs in the country but only a mere 30 of them are lending digitally.

Victor Choi, Chief Executive Officer at Balance Hero India, told IBS Intelligence, “ These are unprecedented times. Even as the COVID19 has made the economy suffer, the first line of banks has become very picky in lending and most of the NBFCs have either tightened their credit lines or have stopped disbursements. We think it is an opportunity for us to be nearer to the needy during the time of crisis.”

Choi further added that True Balance is focused and committed to serving the rural market as he feels that the market is largely agriculture-driven and has not been impacted much.

The full-stack fintech platform, which claims to have 20 million direct and indirect users, had recently announced that despite COVID19 impact, the digital lender has already disbursed loans worth of INR 230 million in March 2020 with an average ticket size of INR 5,000-7,000 credit amount.

“We are committed to solving the last mile issue of credit in the rural market and all our disbursements are 100% digital. We hope to solve the issue of liquidity in this market, which accounts for 45% of the country’s GDP. We aim to strengthen our data and alternative credit scoring strategy to target the next billion Indian users coming out of the rural and small towns of India,” Choi said adding that the company is in the process of two lending products –Level-up Loan and Refer a Loan, in the July-September quarter. The ‘level-up loan’ is being run as a pilot at present.

The company had last year raised $23 million in its Series C financing round from seven Korean investors — NH Investment & Securities, IBK Capital, D3 Jubilee Partners, SB Partners, Shinhan Capital, and existing partners IMM Investment and HB Investment.

True Balance began as a digital payments company offering mobile balance, or top up pre-pay mobile credit in 2014. However, over the years it has evolved into a digital wallet app that helps users pay their mobile and electricity bills, and offer credit to customers so that they can pay later for their digital purchases. The company clocks over 300,000 digital transactions on its app each day. The start-up, which recently introduced e-commerce shopping services on its app to sell products like smartphones, has clocked $100 million in GMV sales so far.

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