Bangalore-based online lending platform KrazyBee, that provides micro-loans to college students has decided to put a brake on lending money to students looking to buy two-wheelers, according to Wan Hong, one of the co-founders of KrazyBee.
It has been almost a year since the company started providing loans for two-wheelers, a product aimed specifically at students. “We are facing issues with that business, so we are going to put a stop on it. It is a very new product and we haven’t even provided 100 motorbikes,” Hong said.
One of the main reasons, according to Hong, for shutting down the two-wheeler loan service is that the company was getting a lot of damaged and broken two-wheelers from its third-party dealers who were providing vehicles. KrazyBee offered loans for new as well as used two-wheelers.
“A lot of second-hand bikes that we got from our partners was either broken or not up to our standards. Bike servicing in India is not as standardised as it is for mobile phones,” Hong said.
According to a report, NBFCs (Non-Banking Financial Company) are leading in the two-wheeler financing portfolio. The loan disbursement for two-wheelers increased by 31% over two quarters for financial year 2107-18 to Rs. 256 billion. KrazyBee holds an NBFC (Non-Banking Financial Company) licence under the brand name of KrazyBee Services Pvt. Ltd.
Last year, the micro-lending platform came to limelight after its Series A fund-raise of USD 8 million led by Chinese smartphone manufacturer Xiaomi and a Beijing-based venture capital firm, Shunwei Capital. Micro-lending platforms such as KrazyBee, CreditMate and Slicepay are banking on India’s untapped market where college students do not have access to credits. It claims to have provided Rs 150 crore (USD 22 million )loan to students in 2017 and aims to triple the disbursement to Rs 450 crore (USD 66 million) in 2018.
Apart from receiving damaged two-wheelers, KrazyBee said it had to spend a lot of time with offline processes pertaining to the paperwork of two-wheelers at Regional Transport Office (RTO). Madhusudan E, co-founder of KrazyBee said the company’s idea is to bring everything online, so that paperwork doesn’t take much time.
"Doing offline processing was a pretty big challenge for us. Considering that a lot of RTO’s paperwork such as licence and everything happens offline, we had to do a lot of processing on-ground. We didn’t want to go ahead and get into offline screening,” Madhusudan said.
However, according to Madhusudan, the two-wheeler product might see a return once the company is able to crack offline processes. “We want to streamline these services. Offline is something we need to understand and crack in the future in a better way," he said.