Finserve marketplace MyMoneyMantra (MMM) was among the few companies that have witnessed a steep rise in demand for the services it offers, especially during the ongoing COVID pandemic. A company that has been operating since 1989 is looking at achieving a new milestone in FY 2022 due to this growth, stated Raj Khosla, founder, and managing director, MMM. Khosla in an interview with FPJ’s Jescilia K and R N Bhaskar talks about his journey that started with Rs 1,000.
Tell us about your journey as an entrepreneur.
I started my entrepreneurial journey with a capital of Rs 1,000 in 1989. There will be many companies that were started with that sum but that remained the paid-up capital of our company until May 2019. It was in 2019, we went for a fund raise of USD 15 million. For 30 years, we ran the company with Rs 1,000.
What does MMM do differently and how do you do it?
We operate in more than 200 cities across the length and breadth of the country. We are associated with over 120 banks and financial institutions. We serve millions of customers. We are firmly tilted towards the customer and its needs. We pride ourselves on finding the best solution for our customers.
The sheer volume in the financial sector made this sector more vibrant and adaptable to change quickly.
While we help the customer find the best product in an affordable and fastest way, we help the bank/NBFC build a high-quality book. Everything is moving fast in this space and we are in the middle of these activities.
We are in small-ticket loans and other small financial-related activities. We are not a full-course meal provider, but are [relevant to people who are looking for] a cup of tea from a Dhaba (eatery).
We provide end-to-end solutions. Even after providing services, we are in touch with the customer.
What has changed since 1989?
Borrowing was not a word people were fond of then. At that time, borrowing was looked at differently. Today, it is different. If you speak to someone in their 20s, it is a done thing. It is part of financial planning which includes estimating what the future income is likely to be and borrowing against it. Today, it is about building an asset, enjoying it, and paying it off slowly. This is par for the course.
In the last 30-40 years, societal thinking has changed around borrowing. And during this revolution, we were in the middle.
What is your topline?
Our monthly run rate, in terms of topline, that is revenue of MyMoneyMantra is Rs 40 crore. On an annualised basis, it could be around Rs 500 crore.
In the month of July 2020, we made a disbursal of Rs 1,500 crore and issued 6,000 credit cards.
What do you charge for issuing credit cards?
We do not charge the customers. But there is an amount that the bank pays us, that is a fixed amount.
Where are your customers based and the smallest ticket size of the loans offered?
My customers are evenly based around the country. There is a concentration in super metros and they account for 8-10 large cities of the country. This is because the people in metros are more aware of various financial products. However, we use technology to tap tier II and tier III cities. More than anything, it makes business sense for our company to offer services in tier II and tier III cities that are not saturated, unlike metros. For instance, we have found that tier II and tier III cities close deals faster as compared to people in metros.
The smallest ticket size of the loan will be Rs 50,000. In the case of home loans, it is 15-20 lakhs. Meanwhile, we also offer loans worth Rs 5,000 but that is not the bulk of our lending. In addition, such low loans attract high-interest rates. So, we do not recommend low loans to our customers.
However, we offer a Rs 5,000 loan as well. This is because we are here to cater to the demand of the customer.
Are you looking at raising any more funds anytime soon?
We will be looking at raising funds. However, there is time for that. This is because my model is not about spending millions to create a topline and create a huge loss. Our USP is that we do not make losses.
There will be future fund raises but we will do it with a structured approach -- why we need these funds for and how we will utilise them.
Are you looking at acquisitions?
Five years ago, we acquired a company in Bangalore and three years ago, we acquired one in Hyderabad. Now, we are in talks with a company in Eastern India.
When the business needs to have different flavours then you need to look at organic and inorganic growth. One cannot stick to just one concept.
Acquisition is tough. But the assimilation of these acquisitions is a lot tougher. The most important point about merger and acquisition (M&A) is what happens after M&A.
How was the growth post COVID?
In our three decades of operations, July 2021 had to date the largest turnover we had. It amazed me.
Seeing this growth, I can see tremendous growth ahead of us backed by technology.
What is the percentage of repeat customers?
During a normal growth period, I would say 50 per cent. However, the growth that we have seen lately is steep. Thus, I can say repeat customers are around 25 per cent. So, 75 per cent are new customers.