Need to get your salary a little early so you can go to that party or get that shiny new gadget? This is where EarlySalary, a Fintech mobile app, aims to carve out a niche for itself by offering quick, low-interest loans for short periods of time – something that would normally involve borrowing from a friend or applying for an advance.
The startup, which just expanded to the Delhi-NCR region on July 28, aims to cater to young professional. The app makes use of an algorithm that requires users to sign in to their LinkedIn or Facebook profile, and uses their profile information to determine their ‘Social Worth Score’, which will determine whether they can avail a loan, and what amount they can ask for.
“We offer amounts ranging from Rs 10,000 to Rs 1,00,000. We kept the minimum at Rs 10,000 because that was the standard minimum young professionals seemed to need near the end of the month. We are experimenting by offering smaller loans as well,” said Akshay Mehrotra, CEO and co-founder at EarlySalary.com
The pitch is simple: Instead of long waiting periods and copious paperwork, users can request the amount they need and specify the date of repayment within a minute. From here, it takes a few more minutes for the algorithm to determine if the loan can be approved. Within the hour, the amount is automatically deposited into your bank account.
However, you can only receive the money into the bank account connected to your salary, as the idea is to automatically collect on the due amount a few days after you get your next paycheque.
While the idea has met with enthusiasm from the intended demographic, the mechanics of the app and the approval process has met with criticism. Despite previous launches in cities like Chennai, Bangalore and Mumbai, certain bugs have persisted, leading to complaints.
“Android OS is a challenge in terms of ensuring a stable application across all handsets, since the OS behaves differently in different handsets. But with each update we fix the most commonly faced issues by users. On the other hand iOS has a very strict approval process, and the app is stable on the OS,” said Mehrotra.
Others were displeased to find their requests for loans rejected for no apparent reason, as the exact calculations behind ‘Social Worth Score’ are not provided to customers. Furthermore, the use of social network to evaluate risk means that if you have friends with a ‘low credit score’, then your own request for a loan might not get approved.
Despite its flaws, however, the app has been generating tremendous interest, and has met with praise for its concept of cutting through long waiting periods or tedious paperwork. While its functions remain fairly basic at present, the company plans to add more features in the coming days.
“We are few weeks away from launching EarlySalary as a payment option on payment platforms and other merchants, wherein users can shop online or offline as per their convenience, and pay us later in EMIs,” Mehrotra revealed.