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Exclusive Interview with Nikhil Sama, Founder & CEO of InstaPaisa

LTP recently interviewed Nikhil Sama, Founder & CEO of InstaPaisa. Prior to founding InstaPaisa, Nikhil had co-founded SnapLion, and with his latest FinTech venture, he plans to enter the Lending space in India. By leveraging big data and machine learning, InstaPaisa plans to automate the lending process and originate loans online.

The company’s online and mobile platform brings together lenders & borrowers, creates credit profiles using its proprietary, new-age data-based proxy credit score technology, matches borrowers to the best lenders for their profile and executes lending transactions.

LTP: Would you brief us on what InstaPaisa is all about?

Nikhil Sama: We aim to be the marketplace for lending. Lenders can invest in our platform and while we advertise to potential consumer borrowers. Borrowers can apply using their mobile app, we connect them to the lender and process the transaction.

LTP: Can you tell us more about the model that you plan to operate on?

Nikhil: It is a B2C lending model. Borrowers are normally consumers. On the lenders’ side, we are planning to have institutional lenders (banks) and customers, but as of now, plan to have tie-ups with institutional lenders.

LTP: When was InstaPaisa founded?

Nikhil: We founded InstaPaisa in July this year (2015) and we went live in October.

LTP: What is your strategy in scaling or moving up the business?

Nikhil: Right now, we are experimenting with the online and offline sourcing channels. On the consumer side, we need to increase the awareness and reach of our product.

LTP: Being Delhi-based, would you consider Faircent (P2P lending platforms) & IndiaLends (Digital lending marketplace connecting borrowers and lenders to facilitate an instant loan transaction) as your direct competitors?

Nikhil: Yes, they are all Delhi-based and they are definitely our competitors.

LTP: What is your view on the market? Do you believe it to be big enough to incorporate all the players?

Nikhil: Yeah, absolutely. There are 38 banks in India – all of them lending. So there is no reason why there can’t be 5-10 online lending players. The online lending space is huge in the US and internationally and is picking up in India. We are confident it can grow in the same way like in the US and other countries. A lot of lending happens in offline channels here in India. Community-oriented borrowing is almost absent in Western economy. That is a great opportunity for India.

LTP: What according to you would be a distinguishing factor for InstaPaisa?

Nikhil: Actually, I think the mobile app is how we are distinguishing. Currently, we are the only mobile app based-lending platform; the other competitors are all Web-based.

LTP: How are you planning to process the overall lending mechanism?

Nikhil: We have got tie-ups with banks and lenders. They give us a list of factors where they want to lend and whom they want to lend. They give us parameters and they give us interest rates that they will lend at. When a borrower comes to us and matches those criteria, we automatically approve the loan.

LTP: You have some checks on the borrower side as well, right?

Nikhil: When the borrower approaches us, we create the whole profile; based on that profile, we match them with the appropriate lender.

LTP: How long do you think a borrower would take to generally match with the lender?

Nikhil: That depends on if the borrower is a new customer or if he is an existing customer. If he is new, then they might not immediately match with the lender profile. If they match with the lender, we can approve the loan in a couple of days.

LTP: And the time duration to finish all the KYC?

Nikhil: That depends on what policy the borrower matches with. Some borrowers match on a policy where their physical address verification is not required. In that case, the whole process can be completed in one or two hours. If they match with a policy where their physical address verification is required, that means someone needs to go and visit the address – in that case, it takes six to eight hours.

LTP: What is the size of your team right now?

Nikhil: There are 12 people. We have six to eight in technology and the remaining are into sales and other offline processes.

LTP: Are there any targets you have fixed for the near future?

Nikhil: In one to two years, we are definitely hoping to do 200 loans a day. We are forecasting to disburse Rs. 2 crore/day and Rs. 60 crore/month.

LTP: Do you plan to white-label your product and deliver it to other banks/NBFCs?

Nikhil: We are doing that with a couple of NBFCs. That is another line of revenue that we plan to bank on.

About Nikhil Sama [Founder & CEO]:

Before founding InstaPaisa, Nikhil Sama was Director at Rocket Internet (early-stage technology fund) where he built/incubated startups from the ground up, including hiring senior management, setting up operations that scale efficiently and playing a co-founder role. He also reviewed new investment opportunities in the online consumer space. Rocket Internet’s portfolio in India included jabong.com, fabfurnish.com, printvenue.com, foodpanda.com, officeyes.com and 21diamonds.com.

Prior to moving to India in 2011, he was a Strategy consultant with Bain & Company in Chicago, where he focused on technology and consumer packaged goods industries. He worked with C-level executives at multibillion-dollar companies to carve out high-level strategy and organization structure.

Prior to Bain, he had six years of Silicon Valley technology and management experience, both at blue-chip companies (such as Cisco Systems, Hughes Research Labs and Hewlett Packard) and with Sequoia, and Mayfield-funded Silicon Valley startups such as Nexsi Systems and Packet Design.

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