The Founder Background: Sameer Aggarwal, Founder of RevFin
“I have an Engineering Degree and an M.B.A. I worked for 15+ years in Credit Risk Management. I worked specifically on helping individuals get loans. I have led credit risk scoring teams at major banks. Credit risk scoring is using data to identify the potential risk of each segment borrowers based on characteristics.” – Sameer Aggarwal, Founder of RevFin.The underserved are building a new life through accessing financing for micro-enterprise provided by RevFin. Click To Tweet
The Core Problem
What problem is RevFin Solving?
There are over 2 billion adults globally who do not have access to affordable lending.
That can be for various reasons including no past credit history, no banking relationships, little or no formal education, poor English language skills, and finally because these people live in underserved geographies.
Why are these geographies underserved by traditional banks?
It’s very expensive to set up banking branches in these remote areas where the local population isn’t very dense.
The Target User
Who is the target borrower?
RevFin’s target borrower is mid 30 year old who has never taken a loan in the past. They live in a small town. They didn’t receive education beyond the age of 10. They use smartphones but are not very digitally savvy. They have a bank account – but a very low level of banking transactions. They aspire to start a small enterprise to increase their income.”
How large is your target addressable market?
That’s a great question. It’s really a question of when you want to look at the potential borrower market. Right now, we are focusing on India – where there are approximately 300 Million potential borrowers who could use RevFin’s services.
What were they doing before RevFin?
Before RevFin, they were struggling. They had limited options to borrow money. They are willing to work hard. They were working in the informal sectors. Possibly they were working in construction, farm labor, some of the carpenters and barbers. These types of jobs are often on-demand, which means their income can be uncertain. The hourly rates are often quite low. They would make around around USD150 per month.
Can you describe what life looks like after they utilize RevFin?
After taking the loan from Revfin to buy an electric vehicle, their income levels have gone up 2x – 3x. This often means they have a chance to save money. More importantly, they can send their children to school. As a result, the biggest impact is that those who utilize RevFin can have a better future for their children and their family. They are now asset owners who are running micro-enterprises.
Can you explain how they are asset owners, what kinds of assets do they own now?
They now own an electric vehicle. Usually 3-wheelers. This allows them to transport passengers or cargo. This is also what we mean by a micro-enterprise. They have something of value to offer – in part because the vehicle lets them provide transportation which pays a higher rate than day labor.
Innovation and Key Difference
How is RevFin an innovation beyond Financial Systems?
The way we underwrite is very different. Our RevFin platform has the ability to use transitional credit risk assessments. However, many of our borrowers are just getting started in credit. So to assess risk better we have identified additional predictive data sources. As you might know, in credit scoring quality of data is the key.
We use psychometrics and biometrics data to determine the buyer’s intention and capacity of repayment.
Additionally, we have found that providing micro-feedback to borrowers makes a big difference in the repayment stream. So we have developed a gamification system. Basically we show them how they are earning points towards rewards each time they make a repayment. “
Why is giving micro-feedback to borrowers when they make payments important?
Imagine you are taking out your first loan. You earn money from your first month of work, and finally have are able to save some money. When you come in and make your first payment – you get notified on your phone that you have earned points towards your first reward. This is important because the borrower knows that we are paying attention to them. They know that we value them making their payments on time. It’s important to provide this kind of micro-feedback, especially to new borrowers who are borrowing for the first time.
Can you share about your customer education?
We make it easy for our customers to understand that their RevFin loan is just the beginning of building a strong financial future. This future means they need to demonstrate responsibility. So each time they come into make a payment, our team speaks to them and explains repayment on time is helpful to their future. We can also provide this positive feedback and education on the phone when they call in to us.
You mentioned the primary target borrower, if you had to describe a second borrower profile what would it be?
We have our main focus for helping people who want electric 3 wheelers. This is a sizable market and we are focused on this for the immediate future.
Funding and Growth
How much money has RevFin raised?
In total we have raised about $10 Million through a combination of debt and equity.
What do you see as your primary source of growth over the next 12 months?
We have two key channels. The first is the dealers who have electric vehicles sales centers. We see this as our primary driver of growth. Secondly, for companies who are offering transport and delivery services and want more drivers who own their own vehicles. So these transport companies can inform their applicants who do not have a vehicle that they can obtain one through RevFin financing.
Where would you like to see RevFin at the next of 12 months?
We are the number one financier for small electric commercial vehicles in India.
Who are your ideal partners?
Small Commercial Electric Vehicle companies.
If one of your potential partners is listening right now, what would be their next step?
Please email us at firstname.lastname@example.org. We are looking forward to helping you grow your electric vehicle sales.
What question do you get most often from your partners?
“What are the interest rates? What are the financing terms?”
What would be the answer to that?
We are very transparent. Our terms are better than the competitors. Often we are 20%-30% lower in terms of interest rates than the competitors. Our process is far easier and faster. Most importantly, a lot of people were not able to get a loan at all before, but they can qualify with us because of our ability to use psychometric and biometric data – which goes beyond what other lenders are able to do.
What question do you get most often from your borrowers?
“Can you wave my loan payments?” Just kidding. Borrowers want to know if they can recommend their friends to the program. They are also interested in understanding the different ways that they can make repayments. Also, they want to keep track of how many payments are left, and how long they have left on their loan.
What would be the answer to that?
We can’t wave anyone’s loan. But the payment terms usually are set up to work with the income you are generating.
Importance Facts about RevFin
Are there any important facts that you want people to know about RevFin?
“Some recent reports have shown the target market is growing at 90% per year – annual compounded growth rate.”
“On our own portfolio, we are seeing a 50% annual compounded annual growth rate.”
“We maintain very good repayment behaviors. Which translates into a very low level of de-liquidation or bad debt.”
“Our losses are the lowest in the industry. Against any auto-financing, regular financing, or sub-prime lending.”