Gaurav Jalan, Founder and CEO, mPokket, explains how technology is making lives of students easier.
Just like any other individual, college students also have several financial requirements varying from educational expenditures like tuition fees, to purchasing books, and from applying for workshops and seminars to even those incurred in leisure activities like going on trips, pursuing hobbies, and entertainment purposes. However, with no income, they have to depend on their parents and their pocket money for these expenses and there are times when it may not be enough.
However, technology is making life easier for such students as well with a lending app mPokket offering short-term personal loans to college students in a hassle-free and seamless manner. The instant-loan app provides financial assistance to college students, eliminating the need for the time-consuming as well as the paper-heavy process of obtaining loans from traditional sources. Gaurav Jalan, Founder and CEO, mPokket, explains how technology is making lives of students easier.
Are certain sections ignored when it comes to credit access, where in the chain do college students lie?
When it comes to college students in India, they do not generally have any kind of income. Because they have no avenues to earn money and have no financial history, they have long been starved of any access to credit since their creditworthiness cannot be duly assessed through conventional parameters. When they need even small amounts of credit to tide over short term needs, they have no one else but informal sources like family and friends to seek aid from. This is where mPokket comes in the picture, providing college students with short-term loans instantly via our mobile app.
What are the main financial requirements for college students for, which they need access to credit? Why?
The financial requirements of college students vary from educational expenditures like college and tuition fees, purchasing books, applying for workshops and seminars etc. to even those incurred in leisure activities like going on trips, pursuing hobbies, and other such entertainment purposes. A student ultimately has to meet these expenses using the pocket money they get from parents, any scholarships they have received, and part time income. However, it is not uncommon that some expenses are lumpy and cannot be perfectly matched with the cash inflows. It is in such situations that the need for credit arises.
What exactly does mPokket do to serve those requirements?
From small-ticket loans which start from Rs 500 to loans that may even go up to Rs 20,000 in case the student works part time and earns money, mPokket caters to the specific requirements of college students. These loans are made available instantly via our mobile app so that any urgent cash needs of students for small amounts is gratified.
With students not having a regular income, how do you assess their credit-worthiness and ensure they would return the money?
College students typically have no source of regular income, although there is an increasing trend of students working part time and earning money. So, for the majority their main source of cash is the pocket money they get from their parents. This cash flow profile, along with the small ticket size of the requirement, makes them ineligible for credit from traditional financial institutions. mPokket uses proprietary credit models that take into account multiple unrelated alternate data points to assess the creditworthiness of a college student.
How can one ensure credit access to students while also avoiding inculcating reckless spending habits?
In order to ensure that the college students do not inculcate reckless spending habits when availing a loan from our platform, we limit the amount of money that a student can borrow and also track how they are spending that money.
What is next on the cards for you?
At present, mPokket reaches about 1 per cent of the total college student population in India. Our goal over the next two years is to increase awareness of our product and expand our reach to 10-20 per cent of college students in India. In addition, we will launch a loan product to serve young professionals who have recently graduated from college and have secured a job. Similar to college students, we feel that this segment is also ignored by traditional finance and starved for credit.