In Brief Shunya One Ep.27

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On this episode of Shunya One, Shiladitya and Amit are joined by Jonathan Bill, Co-founder, and CEO at CreditMate. CreditMate is a fin-tech company focused on the used motorcycle market in India since 2016. Jonathan helps give an insight into the consumer behavior patterns for used bikes in the country and the scale of the secured-lending system.

Jonathan spoke about the credit and lending system at CreditMate.

What we really do is we say look is there a match between this particular demographic, this particular bike, so obviously because we are also assessing the asset in our case. So there is the individual and then there is the bike itself. So what is this bike going to be worth in three years time after the end of the loan? If we go and recover the bike, have we got margin left in the bike? In terms of credit assessing customers, you are looking at stuff like demographics, age, gender, location, geography, occupation. So to give you a sense, 60% of our customers have no credit history.

Amit enquired if CreditMate would expand further to other verticles or markets. To which, Jonathan responded:

We are and we might, but I am a sort of a subscriber to the Peter Thiel theory that vaguely says to focus on a particular vertical and then get good at that. If anything, we might expand our activity inside that vertical beyond just finance. As opposed to necessarily adding new categories. The other thing you have to play around is with when you are lending is your raw material is capital, unlike a product company or a social network, for example, the raw material is people, in our case raw material is capital. So you’re sort of constantly looking for a relationship with other lenders that have large balance sheets that can lend in the asset that you are in. Never say never, used vehicles is definitely interesting. We like secured-lending, that works for us. Anything that you can secure in our case that would mean cars, bikes, possibly tractors, and three-wheelers.

Jonathan gave an insight on the scale of the used bike sector in the country.

India sells 20 million new bikes every year, and that stock has to go somewhere. And plus you have quite a sort of virtuous upgrade cycle so people are often buying new vehicles but will renew every two years. They will use that older bike as a trade-in and that then flows into the system as a used bike. So that’s pretty much how our market works.

Shiladitya wondered about what Jonathan thought of the UI (User Interface) sensibilities in the Indian market. Jonathan then explained:  

The trend towards Americanized minimalistic UI is a bit of a mistake, in my opinion in India. India is just not minimalistic or toned down, at a mass level. You walk down the street it is full of colour and noise and chaos. Most of those designs, I think are over-engineered and in fact, off-putting, intimidating to potentially to users. There is another parallel with China if you look at Chinese apps they are jangling. They are red and they are unabashedly Chinese. To us, they may look a bit cluttered. But it is right for China, it is right for the mass market. So, I think you have to be very careful with UI, it can’t be intimidating, off-putting and it can’t reek of richness and elitism when that isn’t the reality of your customer base.

Catch the episode here: