City start-up taps into inclusive fintech space

“There are people for whom financial services (that the higher salaried class is privy to) is denied. However, the needs of such individuals are as pressing and valid as ours,” says Senthil, CEO and Co-founder, OpenTap. 

The former Wall Street professional, with a 17-year-experience, opted to return to his roots – setting base in Chennai. He says, “It was a challenging 16-17 hour routine. An entrepreneur needs to put in that many hours or even more. Also, a brief brush with investment banking after coming back to India helped me firm up on the decision to become an entrepreneur.” 

The three founders aligned to “explore a market space with some element of social cause,” is how Senthil describes, the reasons for “cutting their lifelines to well-paying corporate jobs and venturing into the stormy waters of alternate finance.” 

“The credit card penetration in our country is at best 2.5 per cent while the non-banking financial companies (NBFCs) may have reached less than 10 per cent of the population,” Senthil points out. 

OpenTap, after an official tieup with a reputed financial institution, is engaged in discussions with more FIs including banks and NBFCs to partner so that it can progress in the P2P lending space. Senthil also says that NBFCs are more open to discussions as the regulatory framework allows such collaborations. 

From Chennai, Bangalore and Nashik, OpenTap plans to expand into Trichy, Coimbatore, Pune, Ahmedabad, Visakhapatnam and Vijayawada. OpenTap is targeting individuals whose monthly earning falls in the bracket of Rs 7,000-Rs 25,000 who require loans to meet educational needs, medical emergencies or life events. 

“A cheque book is what we use to obtain proof of salary from borrowers,” he said, adding those earning Rs 35,000 and Rs 1 lakh per month too were seeking their services. Noting the traditional banking system is not geared up to be inclusive, Senthil says their business model is built up in such a way that the default is negligible. Incidentally post the 2015 Chennai deluge, the company did not face any default. 

“We had 34 instances of repayment which got delayed by two weeks. But every single payment was received. Our customers called and asked us to be a little patient with them, considering their plight,” chips in Vaishali James, Marketing Director. 

Senthil sums up, “If our plans materialise in the next six months, we will be a profitable company. On a comparative scale, we are commensurate with the bank but they don’t even have a product like us.”