Charlie Lee, founder and global CEO of True Balance
With about 10 million users across the nation, and an additional few lakh gained during the Covid-19 lockdown, digital payments app True Balance says it aims to solve the access to credit issue many Indians face.
Launched in 2014, the app is operated by Gurugram-based Balancehero India Pvt Ltd. Its major focus has been on rural consumers and migrant workers. Edited excerpts from an interview with founder and CEO of the Softbank-funded company:
Q. How has True Balance evolved since 2014?
We began as a balance checking service because we believe that balance recharge is the gateway for a fintech for starting financial services in India. As you know very well, most of the fintech services started from balance recharge, because almost 1 billion users recharge their data plans three to four times a month—that’s almost 3 billion to 4 billion transactions in a month.
From there, we extended our services to utility payments, then onto e-commerce, insurance, digi-gold and now, to include loans. Today, we are a full stack financial services provider for 1 billion underbanked, uncredited, unaccessed and uneducated (in the financial space) Indians.
We continue to focus deeply on our loans services, because in this time, we need to solve the access to credit issue that so many Indians are facing. But we continue to provide other services, because we are not just a loans player. We want to make sure no Indian is left out of the financial system. In fact, this is one of the reasons I strongly believe that in India, the small loans business has a very bright future.
Q. During the pandemic, who were True Balance’s loan beneficiaries?
So, our loan beneficiaries primarily belong to what we call the four ‘uns’ – underbanked, uncredited, unaccessed and uneducated (in the financial space). Our focus is on the ‘Next Billion Indians’ as we call them, who suffer the most due to the lack of last mile finance.
A majority of loan beneficiaries for us are migrant workers, young individuals who either reside in rural areas, or have shifted to urban centers for work. They fall primarily in the age bracket of 20-35 years, and for us, loan beneficiaries are split gender wise in the ratio of 20 percent female to 80 percent male.
For example, among our beneficiaries, we have 31-year old Ashish Kumar, a computer operator and teacher from Sitamarhi, Bihar, who was taking loans from another NBFC pre-lockdown. During the lockdown, this NBFC shut down their loans business. He then downloaded the True Balance app and has since then taken four loans from us. As recently as last month, he took a loan of about Rs 9,000 to take care of his monthly expenses. We were thus able to help the gentleman and his family run their household.
There are several millions of beneficiaries across India that True Balance has been able to similarly support. The top few states from where we get loans requests in India are Maharashtra, Uttar Pradesh, Andhra Pradesh, Rajasthan, West Bengal, Delhi, Madhya Pradesh and Karnataka.
Q. Can you tell us something about your ‘gold member’ programme?
We have evolved the gold member programme into the ‘refer-and-earn’ programme. Because we hold a PPI license along with the NBFC license, should members complete their KYC, we are allowed to offer them cashback. We do so for every transaction that our KYC members do. Similarly, for our e-commerce offering, we have something called ‘sell-and-earn’, where again, cashbacks come into the picture.
These cashbacks may seem very small to the average urban Indian, but to a majority of the country, if in a village, you are able to provide recharge services to all your neighbours, the amount you can earn in cash backs is substantial and might help you to run your household. We have 10 lakh such full KYC members nationally.
Q. How are you tapping into India’s rural markets?
A majority of India resides in rural regions. Our referral programme in the rural regions met with great success. People wanted to be financially and credit-wise included, they just did not know how. They wanted to earn via cashbacks because that helped them manage their expenses, but they did not know how.
We intend to remain focused on rural India. However, a large portion of our audience is also the migrant labour workforce, and a certain smaller percentage of salaried Indians.
Q. How many users does True Balance have? How many new users did you gain since the Covid-19 crisis?
True Balance has about 10 million users across the nation. Were we to include the number of people who benefit through our app, via our KYC users, this number would go into tens of millions of Indians. Over the last few months, which is specific to the Covid-period, we have gained a few lakh loan facility users.
The Covid-19 impact is that after the moratorium, quite like other fintech companies, we did experience a higher default rate. After June therefore, we upgraded our underwriting and beneficiary selection process. For now, we are focused on slowly expanding our services to new lending users and then increasing our lending ticket size and numbers. Covid-19 has, in fact, increased our heartfelt business belief that the true potential of the loans business is yet to be tapped in India, especially in the small loans business. While our numbers have gone up during Covid, we see these further rising in the future. This is also keenly bolstered by the fact that the moratorium is not to be extended any further.
Q. What is the way forward for True Balance in India?
From the day we launched, our focus was the Next Billion Indian users. These people will continue to be at the heart of every decision-making process, every change, every pivot, every new service or product line that we introduce in India. We will continue focusing on non-online payment users, non-credit score users, people who deserve our help, but need a way to get to it.