Loan applicants are many, but few are really aware of the criteria banks look for when passing one. This is where Satya Lalith Kumar and T Krishna step in to educate people about credit rating.
Taking a loan is commonplace these days. Be it a car, housing or personal loan. Yet, not many people are aware of what banks look for before approving one. In a bid to increase their profits, banks try to reduce potential non-performing assets (NPAs) by offering loans to those individuals who have a high credit score. Banks have been increasingly dependant upon the credit information bureau of India limited (CIBIL) since 2006 for these scores, before they pass a loan. However, there are not too many companies that help educate the public on the importance of creditworthiness.
This is where Satya Lalith Kumar V and T Krishna stepped in with ICrediZen, a credit counselling and consultancy firm with an investment of Rs.4 lakh. Talking about the business idea, Satya says, “We knew the importance of credit rating will increase over time. In the West, different institutions check these credit ratings for not only offering loans, but to rent a house or buy a house and at times even while offering an employment. This will soon become the trend in India as well. The idea behind our business was to educate people about financial credit rating that include building credibility and credit worthiness of an individual or a business.”
Incidentally, Satya is a chartered accountant and also a qualified cost accountant. “I had previously worked with PricewaterhouseCoopers and RSM International before initiating this project. My partner, Krishna is a management graduate from IIM, Kozhikode and has worked with credit rating companies. We met at a common friend’s wedding and I knew his expertise would be valuable for our business venture,” says Satya.
Although, the company got a breakeven in its first four months, the challenge lay in tapping the huge potential in the Indian market. “The first and foremost challenge is to educate and make people aware about the importance of credit rating in financial planning. Although, the credit repair industry is at a nascent stage in our country, it is a billion dollar industry across the world. We want to grow and expand to other cities,” he says.
Talking about services they offer, Krishna says, “We offer a range of services — credit health check-up of an individual, by seeking a credit report. This will help the individual to make sure that there is no identification theft on his name. After which, we act as an intermediary between banks, individuals and credit information companies to solve issues of identity theft and clearing loans and credit card defaults misusing an individual’s identity.
“We also do financial settlements between the bank and an individual. If an individual is unable to pay the loan due to a bad financial situation, we talk to banks and get issues settled. We also take care that the credit score does not get seriously damaged by such a default.”
The 10-employee company is seeing 200-300 per cent growth month on month for the last six months with 40 per cent margins. It is also planning to raise investments of `2 crore to expand operations to eight major cities in the country next year, which will happen over a two year period. After which, it will go for a second round of fund raising to expand operations to another 20 cities.
Talking about his ultimate objective, Satya says “As a young boy, I grew up seeing people around me going passionate about western products. The ‘made in Japan’ or ‘made in USA’ tag made people make a beeline for those products.
“I always thought of becoming an entrepreneur and my ultimate aim is to create products and services that will help build the ‘Made in India’ tag. Our ultimate aim is to do our part in making the world go crazy in choosing Indian products and services.”