SoftBank-backed Balancehero still hungry for bigger market

In India, the world’s most populous country, about 1.2 billion people are estimated to have no credit score because most are unbanked, meaning they have no access to proper bank loans.

For them, True Balance, a digital lending platform operated by Balancehero India Pvt Ltd., is indispensable for creating financial security for citizens. Thanks to burgeoning demand, the fintech app's personal loan services now boast about 1 billion users, according to Lee Cheol-won, the founder and chief executive officer of Korea-headquartered fintech startup Balancehero Co., which wholly owns Balancehero India.

“Our platform offers fresh loan services with newly discovered credit information,” Lee said in a recent interview with The Korea Economic Daily.

The key to True Balance's success in India is Balancehero’s proprietary credit scoring system, dubbed alternative credit scoring system (ACS), which enables True Balance to accumulate the credit information of unbanked people based on 80 million user data points and offer them credit scores necessary in taking out loans. 

In India, most financial transactions are recorded in phone text messages, and all detailed money transaction information is found in those messages, Lee said, adding that Balancehero uses such messages to analyze user information with artificial intelligence technology to turn them into useful credit data, of course with the consent of its app users.

With improved accuracy through ACS, True Balance’s total delinquency rate dropped to 7% recently from 12% in the first year of its adoption.  

The company started offering personal loan services through True Balance in 2019.

Last year, it also reported a record-high operating profit of 16 billion won ($12 million), up 49.5% from the previous year on its highest-ever revenue of 84.5 billion won, up 21.7%. 

Its total loan book also zoomed 11 times to 430 billion won last year from three years ago.

Encouraged by the latest milestones, Balancehero plans to market its ACS credit scoring system to other countries, mostly in Southeast Asia where many are still unbanked without credit scores.

“I will expand our business to enable all people ineligible for loan services to receive loans through Balancehero,” said Lee.

The CEO, also called "Charlie" abroad, said the company is also reviewing plans to add insurance services to its offerings.

SHORT-TERM PERSONAL LOAN SERVICES

True Balance allows its users to take out short-term loans -- over three to 12 months -- ranging from 1,000 rupees ($11.9) to 100,000 rupees, with its easy-to-use app.  

Considering that the average monthly wage in India is 32,800 rupees, True Balance is targeting the middle class, said Lee.

True Balance was initially launched in the South Asian country in 2016 as a service for users to check their prepaid mobile data balance. Later, it added prepaid mobile phone top-up, bill payment and e-commerce services.

Its business model has garnered great interest from investors around the world, including SoftBank Ventures, which invested in the startup in 2017 and 2020.

Balancehero has raised a total of 129.8 billion won in funding since its inception in 2014, according to Seoul-based venture capital and startup tracker The VC.

Before entering the Indian fintech market, CEO Lee worked for the business-to-business shopping mall iMarketKorea and then started his own business in 2006 selling call-waiting tones to Southeast Asian countries.

It was then he began to see the great business potential in India, Lee said.

In January 2015, he established the India corporate office of Balancehero, which now operates True Balance.

Write to Joo-Wan Kim at kjwan@hankyung.com

Sookyung Seo edited this article.