Poonawalla Fincorp CEO Aims to Reduce Risk with Rs 15 Lakh Unsecured Loan

Mumbai: Poonawalla Fincorp is going against the tide by growing unsecured loans. However, a key differentiator is the segment with the company targeting premium borrowers with unsecured loans of up to Rs 15 lakh, disbursed digitally in just 15 minutes.
"We have extensive experience in unsecured lending, with low delinquency rates among top white-collar professionals," said CEO Arvind Kapil. "Rather than increasing risk, we are diversifying our portfolio while attracting high-quality borrowers." While the loan is for salaried borrowers the company plans to extend it to self-employed in a few months.
Unlike banks, which lack 24/7 digital approvals, Poonawalla Fincorp offers a seamless, fully digital process. "No paperwork, no branch visits—just quick access to credit," Kapil said. Interest rates start at 12%, varying with credit scores.
The company plans to expand into gold loans, consumer durable loans, used commercial vehicle loans, shopkeeper loans, and education loans. It uses data analytics to assess borrower risk, optimize pricing, and pre-empt defaults through early detection and intervention. "Tracking borrower behaviour allows proactive loss mitigation strategies like restructuring and credit counselling," Kapil added.
Kapil, the architect of HDFC Bank’s game-changing 10-second loan during his tenure as head of retail, was personally chosen by Adar Poonawalla to steer the group’s foray into financial services. In the aftermath of the pandemic, the Poonawalla group, buoyed by the global recognition of its Covid vaccine and its deep pockets, set its sights on retail lending. The acquisition of Magma Fincorp provided a ready-made platform, but the ambition was to craft a digital-first lender fit for the modern age.
In the eight months since Kapil took charge, the company has transformed with its corporate office moving to Mumbai and a whole line-up of senior bankers including several from HDFC Bank taking charge. Those who moved in from HDFC Bank include, Shriram Iyer, with 28 years in consumer lending, and senior executives Bhaskar Pandey, Vikas Pandey, and Veeraraghavan Iyer who leading Poonawalla Fincorp’s credit, risk, and retail finance.
Poonawalla Fincorp is pioneering fully digital unsecured loans despite banks' access to savings account data. CEO Arvind Kapil said the business remains retail-focused, with consumer lending as the mainstay, while MSME lending will account for 50-55% of the portfolio.
Kapil expects the RBI’s risk-weighted asset norms to boost liquidity and lower funding costs. The company targets a net credit cost of 1.5-2% and an ROA of over 3% within a few years, with one segment projected at 6%. "Prudent lending and data analytics help us manage risk and keep delinquencies in check," he noted.
The firm is piloting AI agent technology with IIT Mumbai to enhance lending efficiency and expanding into payments. It is diversifying funding sources, tapping institutional and mutual funds, and may raise capital next year. While not exploring credit cards due to privacy concerns, it remains open to future regulatory changes.