Hyderabad: City-based non-banking finance company (NBFC), Vivifi has launched FlexSalary, its online, virtual unsecured personal emergency line of credit. Through this, it offers loans ranging from Rs 2,000 to Rs 2 lakh to qualified individuals for a short duration, said its co-founder Anil Pinapala, chief executive officer.
Vivifi looks to serve the financial needs of the under-served customers with a risk-based pricing model. The customer acquisition and loan origination process is technology-driven, he said announcing FlexSalary on Wednesday.
The unsecured loan based on the credit score, salary structure and repayment capability and related aspects. The company takes a NACH mandate (ECS) for collecting the money back.
“The duration could be for a few days, weeks or a few months,” he said. The borrowers have to pay a onetime registration fee, which is around Rs 300. “For instance, if somebody takes a loan for Rs 10,000, they should pay an interest of Rs 10 per day till they repay,” he said. The interest, with the registration fee, will come to about 36 per cent per annum.
Pinapala said the company has a machine learning risk algorithm for underwriting and automating loan orgination and servicing. “The product will come handy for those who want money for a short period, may be a week or ten days before they get their salary. Such short duration loans for small amounts are not available in the formal banking channels as this will add up to their costs,” said Srinath Kompella, co-founder. The borrower can decided on the loan tenure and has no fixed EMI payment. The Customers can access multiple loans till their credit limit is reached, he said.
The company observed that many took loans to meet medical emergencies, vehicle expenses, make credit card payments and insurance premia, school fees and pay bank EMIs. Patrick Kishore, who earlier served as the chief operating officer of IDRBT and played a role in implementation of RTGS/NEFT, has joined the company as its chairman.
The company so far has invested about Rs 20 crore including in technology. It aims to raise funds for expansion, said Pinapala adding that it is hoping to have 10,000 borrowers in a year as it will launch new products.