Buddy, a microlending startup that provides students with small loans to use on ecommerce sites, raised $500,000 in pre-series A funding today from Blume Ventures, Tracxn Labs, and a few other angel investors. The startup was founded by Deepak Malhotra and Rajan Bajaj, ex-employees of PayPal and Flipkart respectively.
The startup analyzes over 1,000 online and offline data points in order to come up with a loan applicant’s risk profile.
The service is attempting to tackle a few issues in India at once. Without access to stable incomes, most students can’t afford to buy educational resources like laptops and mobile phones. Banks don’t cater to that kind of thing for a loan, and most students don’t have the financial credentials to apply for credit cards. Those who sign up with Buddy can take out small loans that are paid off in installments in periods of three to eighteen months. Interest rates are decided based on each student’s financial background.
Taking out microloans also helps nurture a culture of financial responsibility with minimal risk, explains co-founder Deepak Malhotra.
The latest funding will be used to build Buddy’s credit risk and technology team.
This is an excerpt from Tech in Asia. You can read the full article here
