A recent study indicates that there are around 120 mm households that have yearly income between Rs 2-5 lacs.
In the last decade, we saw the Fintech revolution kicking off in India, where a lot of NBFCs came up with very innovative products, helping customers in getting affordable and hassle-free loans. However, there is one segment that has remained largely untouched, The Blue Collar Workers' segment.
Bueno Finance aims to improve the financial health of Blue Collar workers segment and is working towards building the credit history of these customers. A recent study indicates that there are around 120 mm households (~45% of the total Indian households) that have yearly income between Rs 2-5 lacs. Most of these households are still not part of the formal credit economy as they do not have a credit score or they are new to credit.
Fintech players and small NBFCs have started targeting this segment, but they charge exorbitant interest rates in order to compensate for higher "risk" associated with this segment. Bueno Finance is striving towards changing this situation and bringing this segment of people to mainstream financial lending. Bueno Finance Prime customers can get a loan of 2-5 lacs at 15%-18% interest rates.
Financial literacy is very important
A big reason for staying with private financiers is a lack of awareness. Bueno Finance helps the customers by providing Financial Literacy through the gamified content & videos it hosts in many vernacular languages over their Mobile App. To make it interesting, the customer gains points by watching this content which helps him move up the ladder.
Sandeep Arora, Co-Founder of Bueno Finance, said, “One of the key issues catering to this segment in financial education. Almost 75% of the Indian populations do not understand the basic financial concepts and hence there is a huge opportunity to educate the customers especially in this segment. Bueno Finance is India’s first Credit Building Platform for such Blue Collar Workers.”
Creating a win-win situation
Bueno Finance's customer acquisition approach is a tie-up with Gig economy-related market places and Blue Collar employers to help their workers gain credit from the formal credit market.
The company aims to utilize the employment history to underwrite its customers. This incentivizes the workers to display the best behavior at work, creating a win-win situation for all the involved parties.