APNALOAN.COM: The C2B of E-borrowing

Today, a consumer looking for a loan is typically greeted with a plethora of

"options". On the face of it, this should translate into a beneficial

scenario for the consumer. However, given the limitations of time, the physical

effort required to procure information on all available options, the complexity

involved in analyzing and comparing the terms of each option and understanding

the true picture, the process of seeking a loan becomes a mind-boggling

exercise. And after all the effort, the choice that is finally made may not

necessarily be the wisest one. Moreover, most banks and other lending

organizations cannot possibly provide the consumer with a comparative analysis

of all the options available in the market. It’s here that e-market places

like apnaloan.com have a role to play.

Apnaloan.com caters to all kinds of

loans and credit needs through a common contact point. The consumer has the

option of analyzing services offered by different organizations in one place and

this makes his job easier.

The loan process

The consumer today has a crying need for help in understanding the entire

process of taking a loan, identifying and making a choice from those that best

match his individual needs. In another sense, you have an unusual situation

where the consumer perceives himself as the taker of a loan rather than a giver

of business–due to the treatment meted out to him along the entire loan-taking

process.

Apnaloan assists and guides the consumer at every step through the entire

process of taking the loan. Based on his requirements, the customer can narrow

down his options and apply for the deal that suits him the best. The company

offers a wide variety of personal and financial products such as auto loans,

personal loans, credit cards and home loans using the Internet as a primary

consumer contact channel, for both residents of India as well as NRIs.

The loan-seeker is required to provide certain basic details like his income,

the amount required and the reason for the loan. Every lending organization has

a set of minimum requirements that must be met to be eligible for a loan. Based

on these factors, Apnaloan selects and displays the options available and then

the customer can choose according to his preferences of interest amount, loan

duration or other criteria. "This is a much better deal for the consumer as

he has access to all the information in one place," says Manish Bhardwaj,

assistant manager, HDFC Bank.

In addition, Apnaloan also assists the consumer in the process of filling up

the application and provides counseling by sending its representative to meet

him personally. "Sometimes on meeting the customer we find that he doesn’t

have all the documents required for a particular loan. Here instead of rejecting

his application like most individual banks would do, we try and find him the

next best organization where he can be eligible for the loan," explains BK

Vishwanathan, COO, Apnaloan.com.

"Current marketers of loan products are restricted to supplying loans from

a single institution and are not, therefore, in a position to advise him beyond

their offerings."

The business model

In order to provide the consumers with loan options from various sources, apnaloan.com

has entered into tie-ups with leading banks and financial institutions to act as

a non-exclusive distributor of their products and services. The list covers most

of the multinational and nationalized Indian banks such as Citibank, American

Express, ICICI or HDFC. In addition, it has entered into arrangements with

manufacturers, dealers and associate sites to better the deals to the consumer.

The site is modeled around a consumer-to-business (C2B) model that is

designed to generate revenues through its transactions. Unlike most

eyeball-based sites working on banner-advertising revenue models, the main

source of revenue for apnaloan.com will be

through charges from the lending institutions on each transaction executed. The

amount of commission being the same for every institution, the information given

to the consumer will be without a vendor bias. Additional sources of revenue

will be generated through participation fees, various alliances with

complimentary sites and banner advertising. "We are not working on

futuristic dreams but have tried to create a realistic revenue model that will

be profitable. The company expects to break-even in the first year of operations

(excluding sales promotion and brand expenses) and make a profit in the second

year," says Vishwanathan.

The technology used by apnaloan.com–the

three-tier back-end architecture built on Mphasis-BFL software revolves around

these components:

• The delivery channels: The
  
  Web, mobile access devices, call center and e-mail.

• The
  
  applications integrator: Components like the customer information
  
  profile manager, business rules, decision engine, transaction manager,
  
  security sub-system and the workflow manager.

• The
  
  back-office systems: The loan origination and tracking system, the
  
  information database, compensation system, contract management system,
  
  e-mail response management system and an accounting subsystem.

Advantage lender, too

While the site provides a higher bargaining power to customers, it also

promises a useful business option to the lender. The participating banks or

financial institutions have access to a much larger database that can be tapped.

"It is certainly a good way to enhance our business as we can reach out to

many more customers," says Bhardwaj. "This creates an additional

channel of business for us with greater scalability. And when we gain from it,

we can also pass on the benefits to the consumer through more incentives and

schemes," agrees Shalini Singh, senior executive, ICICI Bank.

In a scenario where a majority of dot-coms are still struggling to define

their business models and most organizations have become skeptical of investing

in new e-ventures, this e-marketplace seems to suggest a rescue route. "We

are not providing any social service," says Vishwanathan, "Our site is

based on a sound business model that will be useful both for the buyer and

seller."

By bringing together a group of organizations together on a common platform

in this way, apnaloan helps cut down on intermediaries and create a more

cost-effective solution. While most multinational banks and lending institutions

also have their individual sites, the concept of such an e-market is emerging as

a useful common contact point for loans and credit cards.

SHWETA VERMA in New Delhi