Discover Axio, the Fintech that now helps 6 million Indians access credit

Fellow MBA students from Stanford University, Axio co-founders Sashank Rishyasringa and Gaurav Hinduja always knew they wanted to return to India after graduation. “We were passionate about doing something that would have a real impact at home,” recalls Rishyasringa. “But when we started researching potential opportunities, we realized that many of our fellow entrepreneurs felt the same way – so many different industries and markets seemed well catered for.”

Ultimately, however, that initial frustration led to inspiration. “We noticed that almost all of these entrepreneurs were facing the same problem: India’s lack of affordability,” says Rishyasringa. In any given sector, the number of Indians with the disposable income to take advantage of the exciting new ventures being launched was limited. “It looked like a horizontal issue holding back multiple verticals,” Rishyasringa adds.

This realization led to the launch of Axio, a fintech start-up that aims to close the affordability gap by ensuring that many more Indians can access credit – that they can increase their disposable income by borrowing. , in other words.

Currently, only around 30 million Indians have credit cards and have access to other types of loans from traditional financial service providers such as banks. The vast majority of the 1.4 billion inhabitants are excluded from these services.

Axios estimates that many of the 100 million of these people have started doing digital transactions in the last three years – buying goods on digital marketplaces, for example, or setting up businesses that trade via e-commerce. . This number is expected to reach 300 million over the next two years. This is Axio’s target market.

The company’s flagship product is Buy-Now-Pay-Later (BNPL) financing, which is offered to consumers when making purchases at one of the many online marketplaces and retailers that Axio has partnered with. , including Amazon India. Customers pay a deposit on their purchase, with Axio paying the rest of the initial cost; the borrower then repays this amount, with interest, in several smaller installments.

The business model is based on Axio’s technology, with its data engine capable of offering a loan decision to a consumer within three seconds of an enquiry. Indeed, the company offers instant decisions to customers at the point of sale.

BNPL deals are gaining popularity around the world, and in some regions there is now something of a backlash, with growing concern that consumers are being encouraged to take on debt they cannot afford to repay. But there is a crucial difference between these arrangements and what Axio offers, says Rishyasringa.

“In places like Europe, consumers use BNPL on top of all the other credit products they have access to,” he says. “In India, we are filling a structural void in the credit market; it is the first point of access to credit for most consumers.

Axio only lends relatively small amounts to new customers, he explains, in an effort to help them build up a good credit history. Assuming they keep their end of the bargain, by repaying on time, Axio borrowers can increase their credit availability over time. The company also recently launched unsecured loans, offering financing of up to $2,000 to customers with the best track records.

Rishyasringa and Hinduja see themselves as pioneers in this regard, opening up an area of ​​financial services in a country where exclusion remains a significant problem for the vast majority. Axio also offers a financial management app, with features like budget management and savings reminders. “We are working to drive the behavior change that we need to see around money management in India,” adds Rishyasringa.

Launched nine years ago, Axio’s growth accelerated last year when it secured $50 million in new funding from investors. The company now has 6 million customers and is adding new borrowers at the rate of 15,000 per day. The loans are running at an annualized rate of $700 million — and the founders expect to cross the $1 billion mark in the next six to nine months.

Encouragingly, borrowers seem to be doing well. The company’s default rate is around 1-1.5%, which is low for subprime loans. Rishyasringa attributes this to Axio’s responsible lending policies – and the growing sophistication of the data engine it uses to make underwriting decisions.

As for the future, there is clearly a lot of market to reach, if India’s digital user population is truly set to grow from 100 million to 300 million over the next two years. But the company’s founders also see potential for expansion into new areas. They have already started partnering with providers in areas such as healthcare, education and travel, where consumers often need help with major purchases, and the launch of the lending business represents a first foray into broader credit products.

Rishyasringa is particularly proud of the fact that 60% of new borrowers who come to the site come from areas outside India’s 10 largest cities – a constituency that has traditionally had even more difficulty accessing financial services. “We’re really keen to regionalize and localize even more,” he says.

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