[YS Exclusive] After Rs 4,000 Cr in credit disbursement, MoneyTap goes to FREO, a neobank focused on credit
In 2016, when Anuj Kacker, Kunal Varma, and Bala Parthasarathy MoneyTap started, they were serving a new and different segment. Back then, most banks and NBFCs weren’t dealing with the middle class who were increasingly going online.
They discovered that middle class borrowers were looking to avail themselves of credit without the hassle associated with the process. It started with providing flexible, fast and convenient credit using technology.
In five years,, the parent company, which is now an NBFC registered by the Reserve Bank of India, has attracted more than 11 million users to its ecosystem and disbursed more than Rs 4,000 crore in credit, as well as the issuance of 175,000 credit cards (in partnership with RBL Bank).
Building on its success in India, the company has also launched credit products in Vietnam, with the aim of creating a strong international presence.
Anuj Kacker, co-founder, MoneyTap and FREO
MoneyTap to FREEO
Now the startup is in the process of transitioning to a neobank FREO led by credit. It seeks to create an innovative digital banking experience that focuses on the unique needs of modern consumers in India and Southeast Asia with a host of financial products such as a digital savings account, Ultra-flexible line of credit, credit cards and EMI, Buy Now Pay Later (BNPL) programs – all in one place.
FREO’s parent company began operations in India with the launch of MoneyTap in late 2016. Its goal was to make credit flexible, convenient and affordable through an intuitive, category-building product.
In an exclusive conversation with Your story, Anuj said, âWe have built a strong heritage of five years of building strong lines of credit and systems aimed only at the middle class. The neobank is one more step in providing access to our consumers. “
He adds that there are several neobanks, but Freo will be India’s first credit-focused neobank.
âAll over the world, there are many neo-banking players. While some are payment-driven neobanks, where they start with payment as the primary value proposition and then expand to various services; others are guided by experience; and some like Upgrade in the US, Nubank in Brazil and now FREO – are all funded by credit, âsays Anuj.
He explains that the team has grown with the now MoneyTap sub-brand, and with credit as its core business, it will offer more options to consumers – such as bank accounts, loans, lines of credit, BNPL, etc. – everything a bank offers.
The founders believe this is more sustainable because credit for any bank is the primary form of income, and the team already understands credit, monetization, liabilities, underwriting, and better loans.
The exclusive statement also added that as part of its growth and expansion plans, the FREO team strives to deliver value to clients as a single point of access to a variety of financial products. throughout their life.
Why a neobank?
The advantage of neobanks is that they offer financial solutions in a fully digital framework by using mobile applications and ensuring a smooth and transparent banking experience for users. FREO aims to do so in India by merging the convenience of modern solutions with the trust and reliability provided by its partners – other banks and regulated financial institutions.
Neobanks can offer a wide range of simpler, faster and more attractive financial products, taking advantage of advanced technologies.
In early 2021, FREO entered the BNPL space by launching an innovative product that enables in-store purchases and online transactions based on a QR code.
The COVID-19 pandemic has led to a shift towards digital spaces, and the bank was no exception. With a growing demand for convenient and intuitive digital solutions and increasingly crowded and cumbersome offline banking, neobanks have emerged and grown exponentially across the globe.
In a conversation with Your story, Anuj further explains the thesis behind FREO and the main goals of the company.
Edited excerpts from the interaction:
Your story [YS]: What is the main reason and purpose of launching FREO? What problem does she intend to solve?
Anuj kacker [AK]: Millennials now demand simpler, faster and more efficient financial services. They are currently forced to use archaic banking products.
FREO responds to this need with its cutting-edge technology and by keeping the customer at the center of the entire experience. Even though a large number of Indians have bank accounts, they need help climbing the ladder of financial access, and that’s where FREO comes in.
FREO gives our existing and new customers the opportunity to get the most out of their banking experience by making credit more accessible, launching new products that enable smarter use of their money and becoming a one stop shop for all needs. financial – like an account, cards, etc.
If you look at how the banking industry has evolved, the first wave was that of PSUs. Then, in the 1990s, the second wave came with private banks nibbling away PSU market share. They offered better products, better service, ATMs, phone banking, etc. This third wave now concerns neobanks who will offer all financial products via a mobile application, all sitting at home.
Neobanks will partner with existing banks, but will have the technological DNA and the data to better serve the end consumer, and for all products via a single connection.
MoneyTap co-founders (left to right): Kunal Varma, Bala Parthasarathy and Anuj Kacker
YS: Why the change and addition to MoneyTap?
AK: We wanted to play a bigger role in the financial lives of our clients in India and South East Asia. The opportunity in these markets is immense, and now it allows us to address it. FREO was launched as an umbrella brand that will encompass the MoneyTap line of credit as well as a host of other products and services.
YS: What sets it apart from the rest?
AK: Neobanks are not a new concept, and many of them have been launched over the past two or three years in India. But while most of them focus primarily on goal-oriented savings or investing, FREO’s vision is to provide people with simple, intuitive, and smart ways to access and manage credit with ease. their money on their phone.
Through this credit-focused neobank, consumers will have access to financial products such as line of credit, credit cards, EMI cards, deposits and savings, BNPL and other financial services, in order to help them build their credit profiles, borrow flexibly, save easily, and spend smart.
Neobanks attract a large number of clients because of the experience they offer, however, it becomes difficult to monetize the business without an effective credit engine in place. FREO is different because it is credit driven which means it has a strong and proven monetization model.
YS: How do customers benefit?
AK: India has an estimated nearly 550 million people with smartphones and mobile internet access. Digital transformation is the way forward for banking and financial products, especially in the era of COVID-19.
Customers have access to various financial services from the comfort of their homes via a mobile application. They can also improve their overall credit profile by becoming a member of the FREO ecosystem.
FREO’s platform is powered by advanced technology, big data and AI / ML models for customer-product fit, risk management, customer engagement, retention, and upselling / cross-selling .
This allows us to meet the needs of customers and offer them the right FREO product, and throughout the customer’s lifecycle, recommend other FREO products to them.
YS: What are your future plans?
AK: Many other products are in preparation. As part of its growth and expansion plans, the FREO team strives to deliver value to clients as a single point of access to a variety of financial products throughout their lifetimes.
Each client’s journey can start early and continue for decades with the different products for savings, loans, wealth, investments, etc.
The study showed that emerging markets like India and Southeast Asia are bursting with potential, with billions of young, underbanked smartphone users looking for a banking partner who understands their needs and offers them relevant financial products. We could soon expand to other regions.
We are now looking at:
- Releasing new products. You will hear introductory announcements on credit, payment-related products, card products, and savings and deposit products over the next three to six months.
- Geographic expansion. We already have a strong presence in a Southeast Asian country. This footprint can extend over the medium and long term.
FREO’s vision is to provide users with exactly what they are looking for and to drive financial inclusion and affordability.