FlexiLoans’ Chief Disruptor
Deepak Jain,Co-founder, Flexiloans
Deepak Jain was born in a family of jewellers and moneylenders. As one of the co-founders of FlexiLoans, he is disrupting his own family’s traditional trade, he says. FlexiLoans is a digital-only platform that lends to MSMEs and small businesses. Since its inception in 2016, FlexiLoans has disbursed loans worth roughly ₹1,600 crore with no physical presence for customer acquisition, loan distribution or collection. The company has around ₹400 crore assets under management.
Deepak Jain was an in-house consultant with JSW Group when he decided to become an investment banker. He joined Indian School of Business and started working for ENAM in 2009. He worked for 15 years in the corporate world before being bitten by the entrepreneurial bug. With his family background, Deepak had experienced the problems owners of small business faced in getting loans from financial institutions, forcing them to pay huge interest rates despite collaterals. He also wanted to ease the process for getting loans. FlexiLoans was born in 2016 with Deepak and his friends from ISB, Manish Lunia, Ritesh Jain and Abhishek Kothari, as co-founders.
The company disbursed around 5,700 loans, worth ₹230 crore, in FY2021. In FY2022, it had disbursed about 8,700 loans, worth ₹470 crore, by December 2021.
The underwriting model, which assesses lending risk through algorithms, has almost 20,000 variables that have been upgraded over five lending cycles.
Flexiloans borrows from financial institutions. The lending arbitrage, that is, gross profit margin on loans, is 12-13%. Its customer acquisition cost is around 2% and NPAs about 4.5%. Another income source is fixed fee earned from NBFCs who use FlexiLoans’ platform as their digital interface. In FY2021, 60-70% growth came from fee income. Revenues from lending are about 55% of total. Deepak expects fee to contribute more than 50%. The company had raised $25 million from HNI investors like Sanjay Nayar, CEO of KKR India, Gunit Chadha, founder, APAC Financial Services and Anil Jaggia, former CIO of HDFC Bank, in 2016. It has raised another $30 million, says Deepak.