Acquisition project | Cash24

1.Synopsis

Access to quick funds has always been a cumbersome process 5 years ago, but now with the fintech revolution is this really a problem ? Personal loan market is highly cluttered with tons of players joining every year. Cash24 has found there initial adopters in this cluttered market and tried to answer three major questions Problem, People and Product.

💸 Problem - What exactly is their need ? (lifestyle, emergency, working capital something else)

🧑‍🤝‍🧑 People - Who are the people looking for a digital loan ?

💡 Product - How Cash24 is solving the problem for them ?

1.2 Product Selection framework

Pillars	Confirmations
Strong word of mouth	Yes, Based on the interview conducted.
Repeat/refer	PL through Cash24 is in Initial stage, however there have been repeat PL costumers in initial three months.
*Credibility to payback	Current performance of loan book

1.3 Core Value Proposition

Flexibility - Choose and moderate your repayment tenure, EMI amount.

Fee - Zero foreclosure and processing fee

Experience - Instant and Paperless disbursals

📈 2. Readiness for acquisition

What stage - Cash24 is currently in Pre-PMF stage, however Personal loan as a segment is a mature product with PMF established across the industry. With Cash24, though we have learned from PMF offerings of biggest competitors we have also developed our own understanding based on the initial disbursals, where we have captured costumers feedback on the offering.
Market Sizing

TAM - The personal loan market in India has experienced significant growth over the past few years, driven by increasing consumer demand, economic expansion, and advancements in digital lending platforms. To estimate the total addressable market (TAM) for personal loans in India, we can use a top-down approach, leveraging data from reputable sources such as CIBIL and CRIF.
- India's population as of 2023 is approximately 1.4 billion.
- According to estimates, around 65% of the population is aged 15-64, the prime age group for personal loans. This gives us roughly 910 million individuals.
- 30% is having a credit history worth paying back as per cibil (ref: [cibil](CIBIL Data: CIBIL reports indicate an increasing trend in personal loan uptake, with detailed insights into the average loan amounts and borrower profiles.)) We have approximately 273 million potential personal loan borrowers.
- Considering 200,000 as the average loan amount for Personal loans
```
             TAM= 273000000 X 200000
```
SAM

Now we need to dissect the TAM into markets where Cash24 could add value

	ICP - 1	ICP - 2
Age Group	25-40	22-30
Total Population	440 Mn	116 Mn
Filtered based on Pre-requisites	350Mn	100Mn
Filtered by income levels	135 Mn	30 Mn
Filtering based on location	60Mn	30Mn
Filtering Based on adoptions	6 Mn	5 Mn
Avg saving per person per month	Rs 2000	Rs 5000
Total AUM per yr	INR 14,400 Cr	Rs 30,000 Cr
Potential Earning - Typical Expense Ratio 1%	Rs 144 Cr	Rs 300 Cr

3. SOM Next from SOM, we need to identify achievable market that can be captured.

	ICP - 1	ICP - 2
Filtered based on Location	60 Mn	20 Mn
Filtered based on Adoptions	600 thousand	500 Thousand
Avg Disbursals per person per month	Rs 20000	Rs 50000
Total disbursals per year	Rs 14,400 Cr	Rs 30,000 Cr
Net interest Margin (2.5 %)	Rs 360 Cr	Rs 750 Cr
Other Fee (PF, Foreclosure, Partpayment) (1%)	Rs 144 Cr	Rs 300 Cr

3.Ideal Customer Profile

In order to identify the ideal customer profile, I have spoken to existing 6 customers of Cash24. We have tried to understand their nee for PL, how they discovered cash24, what influenced their decision. And few psychometric parameters to understand and identify ICP for our product.

3.1 User Interview

	Eshwar	Tarun	Ajinkya	Arjun	Akshay	Dilip
Demographics
Age	28	24	32	40	33	38
Gender	Male	Male	Male	Male	Male	Male
Location	Delhi	Manipal	Hyderabad	Pune	Delhi	Hyderabad
Occupation	Salaried	Student	Salaried	Self Employed - Car dealer	Self Employed - Car dealer	Self Employed - Car dealer
PL requirement
Was this your first personal loan through an app?	No	No	No	Yes	Yes	No
How many times have you taken a personal loan through an app?	2	3-4	2	0	0	4-5
Which app(s) have you used to take a personal loan? (Select all that apply)	1) Early Salary 2) Navi	1) Bajaj 2) Paytm	1) Cred	NA	NA	1) Dhani, 2) Navi, 3) Bank apps
What was the loan amount you borrowed?	100000	50000	250000	400000	270000	480000
What was the purpose of the loan?	Couldn't submit IT proof in March, Hence had to take PL to avoid penalty	Pay government traffic challan	Buy used car for my wife through Cars24	Car Bid on Olx	Car Bid offline	Car Bid offline
PL Experience
How you came to know about Cash24?	Booked Autopilot for my family	Checked my challan through super app	Car Buyer	Registered Dealer	Registered Dealer	Registered Dealer
What all alternatives have you considered ?	1) Kredit bee 2) Navi	Navi, Paytm	None	Dhani, PhonePe	Banks	Banks, Bajaj, Dhani
What features you compared with other competitors?	1) Processing Fee 2) Foreclosure charges	1) loan amount limit 2) Flexible repayment and no foreclosure	1) Instant	1) Zero Foreclosure fee	1) low tenure 1-2 months	1) Low tenure

3.4 ICP

Jolly Arora	Santosh Sharma

Used Car dealer from Pune	BPO worker 24 yr old from Banglore
Meet Jolly Bhai, he is a 34yr old, used car dealer based out of Pune (tier-1) city. He spends most of his time at work and this arounding sourcing new invetory through online and offline portals. He has multiple ways to maintain his working capital, but every here and then he comes across scenarios when he is in sudden need for liquidity.	Meet Santosh, He has recently join Teleworld an international BPO. He lives with his friends in a 3 bhk flat at HSR layout in Bangalore. Santosh new to Bangalore and pretty naive when it comes to finance management he ends up spending hi salary in first 20 days of the month.

4.Channels For Acquisition

4.1 Product Integration

Experiment 1 - Cars24 Dealer Portal

Cash24 being a subsidiary of cars 24 already has acess to around 15000 Used car dealers across India, who place 1,00,000 bids every month. During our ICP interviews as well we came across used car dealers who discovered about Cash24 through consumer app and used it as a part time business loan to buy vehicle.

Why Cars 24 Dealer portal?

Initial adopters already available
Trust factor already established as consumers are existing Cars24 partner
Funding here creates a flywheel - Which in turn will help the core business of selling for cars to dealers

How will the look like ?

Current portal Look

Untitled design.png

Proposed portal look

Experiment 2 - HRMS portals

Background : During ICP interviews we have came across a very strong use case of earli Job joiners who are still struggling to manage their finances. Which essentially make them look out for options to get acess to money and avoid such shortcomings.

Why HRMS Portals ?

Salary slip page of HRMS portal where employees frequently re-visit, due to anticipation for salary day will be the exact age to find ICP -2.

What is there for HRMS Portals ?

This will work on lead monetization model where Cash24 will be offering a certain % of their CAC to HRMS portals. This will be a win-win for both as HRMS portals are getting a additional revenue source and Cah24 is getting acess to it desirable TG.

Current View

Screenshot 2024-06-21 164953.png

Proposed View

Experiment 3 - Content Loops

Tough to create content loops for financial product that people would like to keep it private.

However we could work on podcast type of engagement. We can interview users or successful people about their wealth story and share it with the community. In this case

Content Creator : - Cash24 Team

Content Distributor : - Youtube/Instagram reels

Content Distributor Channel : - YouTube Auto-suggest, YouTube subscription Notification, or Notifications on Cash24 App.

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