Creditas: cracking the loan code?

Abstract

It was a cold, crisp January morning in 2023 when Anshuman Panwar, CEO of Creditas Solutions, sat with his cup of tea, contemplating the next steps of his company. Creditas Solutions, a startup that operated in the loan collection and recovery space, had been challenging the traditional norm of using threat and intimidation to recover money from defaulting customers. Instead, the company focused on the education and empowerment of its customers, utilizing data and technology to improve the efficiency of its collection process. By profiling defaulting customers, they could target and recover money in a more cost-effective and streamlined way. They had also launched a Software-as-a-Service (SaaS) based platform called Ethera, which banks could use to load their defaulted accounts and monitor progress. The platform had seen significant success since its launch. The founder had given an interview stating that the company was on track to earn ₹100 crores in the financial year 20211. Anshuman was thinking about two issues going forward. First, the current monetization strategy was based on the recovery amount. The company was trying to move to a licensing-based monetization strategy for its platform. This could provide more benefits in terms of passing on recovery responsibilities to the banks. The issue was in figuring out how they should approach this change and convince their clients to embrace the new fee structure. The second issue had to do with expanding the business. The company had received inbound queries from banks in the west and southeast Asia2. Their solution was unique and ground-breaking for the collection industry. It could also be scaled to other geographies easily. They were also considering going into other banking processes, such as lending, and even expanding into insurance. The model was flexible enough to adapt to these different needs since it was very modular. The question was which of these expansion strategies made the most sense for the company at this point in time. As Anshuman sipped his tea, he acknowledged that the company had come far in the debt collection segment but also knew that there was a lot left to do.