New Delhi: Truecaller Pay plans to enter into credit business by early next year with an aim to bring its customers accessing loans through informal means into the formal credit network. The Unified Payments Interface (UPI)-based app’s move to tap the growing demand among consumers for credit is a part of the expansion plan of the company.

“Around 60% of people who are coming on Truecaller pay happen to be experiencing UPI for the first time. Such a kind of user base definitely needs a solution like this to avail credit as they do not have enough access to the formal ways of credit. When they have a spike in their expenses, they turn to informal credit facilities," said Sony Joy, head of payments and financial services at Truecaller.

The new feature will initially be rolled out in around 22-24 cities and eventually expand to rest of the country.

Truecaller Pay lets users create their unique virtual payment address in the Truecaller app, and allows instant transfer of money using any UPI supported bank.

According to Joy, the company is awaiting for clarity from the regulators on the usage of Aadhaar based e-KYC (know your customer). “We have designed this in a way that the amount of documentation required is very minimal, in fact there is nothing much required to be uploaded expect for an ID card and there will definitely be a physical process as Aadhaar can’t be used for e-KYC."

On 26 September, a five-member constitution bench of the Supreme Court, headed by former chief justice Dipak Misra, had said that Aadhaar can only be used for welfare schemes and subsidies of the state under Section-7 of the Aadhaar Act. It had also barred private companies from using Aadhaar data for authenticating customers. This has adversely impacted the fintech industry.

Speaking about the process that will be used to evaluate the credit worthiness of the loan seekers, Joy said, “We don’t solely depend on the credit history of users. If they have a credit history with agencies like CIBIL, that will obviously help but even without credit history we can start serving our customers. The financial score that we arrive on is based on transactions done of various platforms or through their bank accounts etc."

Amount ranging from 10, 000- 300,000 would be given on credit for a period of 3 months to 2 years. The loan window will be a function of the disposable income one has. Interest rate charged will be dynamic, anywhere between 16-26%. It will depend on the credit score and the period of repayment of the principal amount, Joy added.

“Our platform will intelligently access and suggest to you that you might need 6 months to pay up this loan even if the users wants to aggressively pay, we adapt in a way that we decide the best for the users based on his/her finances," he said.

Truecaller claims to have around 250 million users globally, including more than 150 million in India.

Joy said the Swedish caller identification app has around 40% of users from tier-II & III cities.

Truecaller Pay was launched in March 2017 for Android users and in July this year for iOS users. Truecaller Pay will have at least 25 million users on-boarded by March just through organic channels, claims Joy.

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