When Vikas began working in the family business he noticed that his employees would frequently come up to the company and request for loans. The employees’ needs ranged from meeting emergency medical expenses or paying their children’s school fees to buying a smartphone. He noticed how his employees’ faces would light up, not just when they got the loan but also when they were returning it.
Vikas found out that banks would not give them a loan as they were never able to meet their standard and stringent eligibility checks. The employees often ended up going to opportunistic moneylenders or pawnbrokers who would charge inflated interest rates. Paying off these amounts took a long time, which made it impossible for them to have any savings. The other, safer and more trusted, alternative was to approach their employer.
Here were people who earned Rs. 15,000 or more. Some of them had been working in his family’s business for several years. They had good professional and personal track records proving themselves to be trustworthy and disciplined. And yet, they struggled to get a loan from a bank. They were financial outcasts.
A little research showed that his employees were not alone. Nearly 190 million working people in India were non-existent when it came to banks. With his background in venture capital and FinTech he was confident that he could use his experience to fill this void and create an impact.
That’s how PerkFinance was born in 2017. He dipped into his own savings and borrowed money from his family to make his dream of social innovation and financial inclusion a reality. His biggest mission was to enable working people to have access to money whenever they needed it.
Employers had access to a wealth of data that could be used to validate their employees’ creditworthiness. Vikas wanted to utilize this, combining it with alternative financial models and new technology to set up financial wellness programs in workplaces. His aim was to enable employees to borrow and pay back through salary deductions.
Initially, he found that HR personnel and CFOs were hesitant about this model that was new to India. It took legwork, multiple coffee-fuelled meetings and passionate demonstrations of PerkFinance’s effectiveness before companies began to come on board in large numbers.
Today, PerkFinance’s team of believers has grown steadily and has already enabled hundreds of customers to borrow and secure their financial futures. They no longer fear credit and now know that saving can be a reality.
We may be young and small but we have got plenty of heart and a mission to fulfil. Our audacious goal is to assist over a million underbanked families and touch over Rs 7,000 crore (US$ 1 billion) in lending in the next two years. Being easily approachable, and able to empathize with the struggles of these families, we know deep down that we are in the best position to help them. Our nearly-paperless and transparent process makes ours a win-win model, benefiting both the employee and the employer.
With this we are not just enabling lending. We are enabling a whole new way of life.