Flipkart-backed super.money irons out plans for secured lending

Prakash Sikaria, Founder and CEO, super.money
 
India’s ecommerce giant Flipkart’s credit-first UPI app super.money has plans to move aggressively into becoming a secured lender in coming months, rather than just a UPI (Unified Payments Interface)-first payments gateway app. 
 
During the beta phase, the app witnessed close to one million downloads, driving over 10 million transactions, the fintech said in a press release issued on Wednesday. As per NPCI, credit transactions on UPI are reaching Rs 10,000 crore each month. 
 

super.money’s first product is a RuPay credit card that operates like an interest bearing wallet on the UPI platform. super.money has already launched another product, unsecured personal loans, in tie-up with some of India’s top banks. 
 
“There is a great opportunity in the retail credit space which continues to grow. Secured credit products have not been innovated upon and have not seen the right type of penetration,” Prakash Sikaria, founder & CEO of super.money, told Forbes India, in an interview. 
 
Sikaria says the opportunity around credit on UPI emerges from India’s Tier II and III markets. From a user perspective, it is a 3x-4x opportunity rather than regular credit cards. “Our beta phase was instrumental in shaping the super.money experience, particularly in how we innovate at the forefront of credit on UPI,” he said in a press statement. 
 
But for super.money to differentiate itself in a still-growing but heavily congested lending space, led by banks and non-banking financial companies (NBFCs), it will first need to make a mark through the products it offers, rather than just through UPI-backed transaction volumes. 
 
Axis Bank and IDFC First Bank are live with super.money, to provide credit products. 
 
“The road to making financial inclusion goes from secured products. The secured credit card is a new product, the coming months will see the launch of credit line products with the banks,” Sikaria told Forbes India, adding that they were far more bullish on the secured products, rather than unsecured products. 

Also read: Edelweiss Alternatives: Tapping the credit opportunity

Why secured lending 

The Reserve Bank of India has, both in informal discussions with banks, and formal publication (half-yearly) Financial Stability Report highlighted the rapid pace of growth of unsecured loans in India’s retail loans segment over the past two years. 
 
In November 2023, the regulator had increased the risk weightages in some loan categories of unsecured loans. This has already had a desired result. The growth in credit card portfolios had fallen to 23 percent from 30 percent before the RBI move. Similarly, banks’ lending to NBFCs had slowed to 18 percent from 29 percent earlier.  
 
Unsecured loans—largely personal loans, loans on credit cards and some forms of consumer durables and student education loans—do not have collateral and thus are considered riskier than secured loans (auto, home, loan against property). Add to that a still high interest rate regime and it raises risks to the lending system.   
 
In the secured lending space, several of India’s fintechs are trying to sell digitised loans, particularly gold and fixed deposits. The other products, such as auto and home loans, are dominated by banks and NBFCs, which have a larger branch network and fleet on street.  
 
Sikaria is confident about the potential of the universe he plans to cater to. “Our surveys show that only 15-20 percent of people, who apply for a credit card, get one,” he says. In the unsecured lending space, super.money will aim to cross-sell financial products.  
 
The strategy would be to acquire customers who have a higher average revenue per user (ARPU), and provide them with better rewards to retain them. The challenge for super.money, like several other fintechs, will be cross-selling the financial products and then building the percentage of such a userbase. 
 
Super.money, which has a team of 80+ people, is majority Flipkart-owned. Sikaria declined to comment on the amount invested so far by Flipkart, but said they were “well-capitalised” for at least another year.