Application-Based Line of Credit Provider MoneyTap Crossed 1,000,000 App Installs in three months since its inception, becoming the fastest growing app-based lending startup. The company also lowered minimum wage eligibility to INR 20,000 per month and made the service available to consumers living in shared accommodation.
Since the entry barrier was lowered at the end of December 2016, MoneyTap has seen huge demand from consumers in the lower middle income group, with average salaries of around INR 22,000 per month and / or living with their friends in shared accommodation, the company said.
âIn the past 20 days, over 25% of consumers who have requested MoneyTap are in this category. This new category of young consumers, working in public, private or multinational companies in Tier 1 and 2 cities, are underserved by financial institutions and are generally shunned in the absence of a credible credit history, âsaid MoneyTap. âWe realized the need to tap into this segment and provide a line of credit to residents of eligible shared housing with a credible KYC. This is a significant number of potential customers for MoneyTap, âsaid the Bangalore-based lines of credit provider.
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MoneyTap first introduced the concept of line of credit (personal line of credit for consumers) in India when it was launched in late September 2016. âLine of creditâ means the bank will issue a limit of up to 5 lakhs. INR, without any guarantee or interest. The credit limit can be anywhere from INR 25,000 to INR 5 Lakhs depending on each person’s credit history. With a patent-pending chat interface, the free app quickly assesses a user’s credit in 7 minutes and immediately tells them how much they are entitled to. Against this limit, using the MoneyTap app, consumers can borrow as little as INR 3,000 or up to INR 5 lakhs and repay it as an IME from 2 months to 3 years. Interest is only paid on the amount borrowed and rates can be as low as 1.25% per month. The credit limit is also automatically topped up as soon as the IMEs are paid off.
MoneyTap launched the product at the end of September with its first banking partner, The RBL Bank. RBL’s technology enables MoneyTap to provide instant decision and instant access to money. While all actions are initiated on the MoneyTap app, per RBI guidelines, all financial transactions such as billing, refunds, or withdrawals are processed directly with the bank using secure APIs. Consumers do not need to have a bank account or any other account with the partner bank to benefit from MoneyTap. For convenience for purchasing purposes, a “MoneyTap RBL Credit Card” is also provided to the user. This is a regular MasterCard credit card that is accepted in all locations and for all card purchases – offline and online.
The MoneyTap app is available on Android Playstore for all employees living in Ahmedabad, Vadodara, Delhi NCR, Mumbai, Bangalore, Pune, Hyderabad and Chennai. The business is growing continuously throughout India and will soon announce other cities. Qualified customers, after completing the KYC (straight from the app with no paperwork), will pay a one-time line setup fee of INR 499 + tax on their first month of electronic settlement. This includes the cost of issuing the limit to the customer, a free MoneyTap RBL MasterCard, and a host of other benefits. There are no hidden fees or charges and each time the client chooses to take an IME they will be shown interest and any other applicable charges and the client will need to provide explicit consent prior to borrowing.
âSince its inception, MoneyTap’s goal has been to provide easy access to small credit needs. The lower middle income group in India is largely underserved by financial institutions. It is also a growing segment that needs credit. With the proliferation of smartphones in every nook and corner of the country, an expanding middle income group and an increasing ability to earn and spend, it will be interesting to see how access to a line of credit will change their lives, â Bala Parthasarathy, Co. – Founder, MoneyTap.