Worldwide, an estimated two billion people lack what the World Bank deems ‘adequate’ financial services. Women, the poor and populations in rural areas are the worst affected. In a vast, emerging nation such as India, the problem is significant, but technology has begun to help bridge the gap.
In the past seven years, India has taken massive strides towards financial inclusion. When the World Bank’s first Global Findex database was launched in 2011, only 40% of adult Indians had bank accounts. In 2019, that figure is almost 80%. Helping to improve the country’s level of financial inclusion is Bonfleet Solutions.
Bonfleet was established in 2016 to provide working capital to gig economy workers in India, says Bhasker Kode, chief executive and founder of Bonfleet. Key targets are those underserved by traditional financial service providers, such as taxi drivers, plumbers, beauticians, contractors and the self-employed.
Across India, Bonfleet is active in 10 cities, with plans to expand by another 15 in the next year; there are also ambitions to spread internationally to a further three countries.
“We aim to enable financial inclusion by facilitating short-term credit to support [customers’] recurring expenses,” says Kode. “With the company’s support, the working class can now swipe the Bon card at various merchant locations and take care of any shortfall in cash during the interim.”
Unlike other credit lenders, Bonfleet lends through non-bank financial companies (NBFCs), which provide financial services and facilities without meeting the legal definition of a bank. NBFCs are, however, still covered under regulations set out by the Reserve Bank of India. Costs are therefore reduced as users can utilise existing payment frameworks that exist within most merchants.
To ensure the credit is being used for the correct purpose, Bonfleet has developed technology that limits use of the cards to certain merchants. Taxi drivers, for instance, can use the card at any petrol station across the country, but not at a supermarket. The company uses analytical software to track users’ repayment behaviour and adjusts credit limits on a weekly basis as a result.
“We have the world’s most real-time credit-scoring system,” says Kode. “Every customer is assessed every 100 hours and a new credit limit is devised for them through a proprietary customer-scoring algorithm.”
Bonfleet operates a completely automated onboarding model for its customers. Thus, the process allows only a handful of employees to onboard around 100 customers daily.
Although a relatively new company, Bonfleet has expanded at a rate of knots, with a customer base of 35,000 and 300,000 transactions processed to date. By the end of 2019, the company hopes to have built further momentum and reached 100,000 customers.