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Paisalo Digital Limited has recently launched a digital app for the Indian financial market. BE’s Ellora De spoke to Sunil Agarwal, Managing Director and Shantanu Agarwal, Chief Innovation Officer,  regarding this newly launched app.

Q. What is the Paisalo Digital app?

A. The Paisalo App has introduced an automated digital lending platform entailing paperless financing on the basis of the Aadhar cards and based on the bank account details of the borrower. People no longer have to visit banks for small loans. The entire documentation process is app based. The processing steps are open for the customer. The Know Your Customer (KYC) process gets authenticated through the Indian government. The Aadhar database and documents get digitally signed. All loan disbursements are routed through the bank account of the borrower and installment collection is done through National Automated Clearing House (Enach) mechanism.

Q. Who is the target audience?

A. Anyone and everyone who is looking to generate self-employment and is in need of money is our prospective customer.

Q. How can it help the economy?

A. The financial needs of 1.25 billion people (non-income tax payers) are covered by only 6% regulated entities. Customers’ repeated visits to the banks, first for borrowing and then for re-payment adds to the borrowing cost. The market size of these small loans is around $46 billion, just on a conservative credit demand of $400 per person per annum.

The digital penetration of 400 million or more. That’s over one-quarter of our population. And half of them transact online. The potential is huge. In three years, this number will be close to 650 million. Most Indians access the internet on mobile devices. Our app is poised to increase its loan book significantly, by providing income generation loan to people seeking small loans.

Q. What are the main features of this app?

A. Our app uses the trio of measures which include Jan Dhaan, Aadhaar Card and the JAM Yojna. Together with artificial intelligence, machine learning and current data analysis we try to provide smart, easy and legally eligible loans.

Q. How was this created?

A. The idea for Paisalo App was floated around October, 2017 and we were able to develop the platform and launch it on January, 24 2018. Till date, the app has disbursed 58,976 applications.

Q. How does this app function?

A. With just two compulsory documents and an Aadhar linked process, getting a loan on Paisalo is simple. The first step is to apply where the customer gives his details, loan purpose and loan amount. The second step is to select a loan offer where the customer needs to review the monthly payment and interest rate options. Once approved by the credit matrix algorithm, the loan is automatically deposited in the customer’s bank account.  

Q. How far is this digital project protected from cybercrime?

A. The app has been certified by Mobile Application Security and Stress-Testing Agency. In addition, the Aadhar number provided by the applicant is never captured on the app or stored. The e-KYC data returned from UIDAI is kept encrypted on the Aadhar vault remains encrypted. A unique reference number is generated for each and every Aadhar number on the Aadhar vault. The demographic data except the Aadhar number can be fetched from the Aadhar vault by specifying a unique reference number earlier sent by the Aadhar vault. The Aadhar number is never kept in the database. The demographic data received from Aadhar vault is kept in the database with the loan application and is only accessible by the loan origination software which is protected by username and password and is accessible only over HTTPS.