Bon Credit Offers Micro-Working Capital Loans, Suitable for Self-Employed Professionals who have Variable Earnings

Bon Credit launched their services in the market in 2018 January with one desk in Bengaluru. It was founded by Bhasker Kode. Today they have 20+ such outlets.Bon aims to fill in the every-day credit need for a self-employed professional, specifically for his/her work related expenses. For e.g. a Swiggy delivery driver can use Bon Credit to pay toll or petrol for his vehicle.

A customer interested in their product can apply for it through their App or walk into their retail outlets and walk out in 5 minutes with a Bon Card that can be used at various merchants that are related to their line of work.  Depending on the nature of work of the customer, the credit cycle is either weekly or synced to the payment cycle of the network partner. This makes the repayment process simpler for both the customer and them.
For customers who have lower earnings or do not have a credit score, they start with a very small credit amount, sometimes as low as Rs 500. They have an internal credit score mechanism which is updated for each customer every 100 hours. The credit limit is gradually increased basis their credit behaviour.

“The idea of starting Bon was seeded at the back seat of a cab. In my previous work engagement, I spent my 45 minutes commute time to office talking to the cab drivers. The conversations gave me insights about their earnings as well as the struggle to manage the daily cash requirements. One common thread that amazed me was that despite a steady monthly income of close to Rs 15,000 -30,000 , the drivers were not eligible for a credit card or personal loan from banks. This in turn resulted in vicious loan cycles with money lenders, dragging them into poverty. For a start I wanted to do something to help the hard-working workers who were being ignored by traditional financial institutions.” says Bhasker Kode, Founder of Bon Credit.

Financial inclusion in 30 seconds. To collect a Bon Kit, a customer just needs a proof of identity and very little documentation. Most important, a customer with low or absolutely no credit score can also apply for Bon.

“I also realized that with new era of technology driven market places, the number of Gig workers is only going to increase in the future and so will the demand for relevant financial services. After much deliberation, I quit my earlier job and decided to launch a service which can act as a credit card for Gig economy. We are trying to solve the working capital issues solved in recurring day to day expenses of the self employed. We have mapped out the top expenses for 25 different professions, and believe that in 5 years any profession will be a tap away for customers. And for them Bon will also be just a tap away.” adds Bhasker.

They offer micro-working capital loans, suitable for self-employed professionals who have variable earnings. While there are a few others fintech firms that are offering financial services to the salaried, there is no one who has the focus of Bon - targeting the non-salaried professionals, especially for the gig economy, freelancers and contractors. They want to fill in this gap.

They charge a sign-up fees for their customers. They also have a small revenue sharing arrangement with the NBFCs that they work with.

Going forward, they plan to expand their service offerings from just credit to other related financial services. They believe the addressable audience is 80 million blue collar and 20 million white collar workers. Only 5% of this sector is organized by gig platforms. According to an industry report, India employed close to 1.2 million gig workers in the last two years. The number is likely to increase to double every 3 years.

Bon Credit at present have over 35,000 customers, across 20 locations and have enabled over 600,000 micro loans.

"Our north-star at Bon is to find the right amount of credit that can enable our customers to maximise their earning capacity. In the years to come we would like to be synonymous with providing financial inclusion for the self employed.” says Bhasker.