ZestMoney: Avail Credit without a Card

• 12 February 2018 | 1537 Views | By Mint2Save

ZestMoney credit has quickly established itself as one of the staple digital credit company. A microloan based finance and payment platform, ZestMoney has made loans an easier process, thanks to, minimal paper work and shorter approval processes. How has it achieved such a remarkable feat in so small amount of time? How comfortable should one be while using ZestMoney? This and more information in this article.

What is ZestMoney?

The era of micro credit has finally arrived. Loans of small amounts in order to purchase electronic goods or go on a small trip, are frequently being availed by youth. The habit of not taking a huge debt for a long time is indeed a good habit, but how many finance have taken an aggressive stance on this?

Microcredit to the urban was earlier possible only via credit cards or secured overdrafts. There didn’t used to be a concept of loans for small amounts and even if there was, it was full of multiple documentation, high interest rates and complicated processes.

Now a few fintech startups have taken this as an opportunity to canvas easy loans. ZestMoney is one such startup. It is more focused towards financial assistance in buying mid and high end electronic gadgets and services from various websites over the internet. It is a type of digital credit card, where, once approved, user gets a line of credit to purchase things.

Based out of Bengaluru, this startup was founded in the year 2015 and has Indian and British founders: Priya Sharma, Lizzie Chapman and Ashish Anantharaman. The trio is a team of digital finance and technology professionals and their startup has received funding from Naspers, Ribbit Capital and Omidyar Network.

Availing a line of credit from ZestMoney

Following a three step process, anyone can avail products on EMI using ZestMoney. These steps are as follows:

1. Filling out a profile on the website comprising of PAN Card and Aadhar Card along with other personal details.
2. Uploading documents to ascertain the identity (such as certified account statements, e-KYC references or other ID proof).
3. Upon approval, you can activate your loan using an auto pay mode, which can be activated by uploading an NACH mandate.

Once you get approved and finish all the formalities, you can shop on all popular websites to purchase the expensive gadgets or service you want. As of now, ZestMoney has over 25 various websites, including Amazon, Flipkart, Cuemath etc., with whom it has tied up for services.

How Does It Work?

Undoubtedly, ZestMoney is a product of big data analysis, which uses credit score systems like CIBIL and Equifax to determine one’s ability to repay a loan. Other factors would include bank statement analysis. Statement analysis would reveal one’s income pattern, spending patterns etc. Being a data derived system, this system is constantly improving itself. This would result in better results and analysis.

Since one of the major objectives of this less turn around time or TAT, big data proves to be quite handy here. Technology upgradation would definitely make ZestMoney a staple in the world of small finance.

It is however important to note that ZestMoney website nowhere mentions about interest rates. Since the loans are of shorter duration and for gadgets whose value depreciate in a very small amount of time, it is expected that interest rates would be as high as of a personal loan.

The idea of bringing easy credit to masses is certainly quite lucrative and there is no doubt that the giants have flirted with this before. However, without a proper execution, revenue generation, there is no point of pursuing such an idea.

With startups like ZestMoney, the credit extended is indeed easy to get, but when compared to home loans and auto loans, the amount of loan as well as the tenure is one eighth to one tenth. This feature is the strength of the startup. Further, the frequency of customer defaulting would also be low as defaulting would ruin their credit score, which in turn would deem them ineligible for any other loan.