Emergency cash

It is the end of the month and all that partying & the EMI on your iPhone has left you broke. You have some other installment to pay or still want to attend NH7 Weekender amidst your financial crunch. Your options range from maxing your credit card debt to the usurious unofficial lender in the accounts department. Alternatively, if you aren't particularly bothered about losing face, you can cajole friends or family. Realising this month-end demand for cash among salaried spendthrifts and those in genuine need, Pune-based Akshay Chavan and Purushottam Kadam decided to cash in through their start-up Kadki.

With an initial investment of Rs.25 lakh, Kadki formally began lending in December, 2015 to those with a regular salary. “Through Kadki, we want to bring down the exorbitant interest rates charged by local money lenders and lessen the financial burden of borrowers,” says Kadam.

The process for applying for a loan at Kadki is simple and speedy. “Once the person applies for a loan, we send him a form and ask him to upload his Aadhaar card, PAN card, passport copy along with the filled form. Our executives then conduct a thorough house and company verification. The borrower then gives us a postdated cheque to be deposited on the day his salary gets credited. Once, the process is completed, money is transferred in the person’s bank account within 24 hours,” explains Chavan.

Kadki currently lends between Rs.5,000-25,000 at a interest of 1.5% for a maximum period of 31 days without any collateral. Their ‘eligibility calculator’ calculates the interest rate, the number of days along with the maximum amount they can borrow on their current monthly salary. They also pay a 5% commission to every successful referral. So far, Kadki has completed 700 transactions with an average lending amount between Rs.10,000-15,000. It has lent out Rs.70 lakhs and has attained operational breakeven with a revenue of Rs.65, 000 a month.

Kadki allows external investors to contribute funds with a return of 15% per annum and is working on getting more investors on board. While the concept and the high rate of return is intriguing, there are risks like defaults and cheque dishonouring. “If a borrower defaults on his payment, we report to CIBIL and his credit record is at stake. We can also book the person under Section 138 of the Negotiable Instruments Act,” adds Kadam.

They plan to expand to Mumbai and Bangalore by January next year. They are also eyeing a tie up with UIDAI to link their database and reduce the probability of fraud.