BASIC Home Loan Success Story: Revolutionizing Home Loans in India

Getting a home loan is a big step toward owning a home, providing financial assistance to make your dream a reality. The Indian home loan market, valued at approximately USD 300 billion, is expected to achieve a CAGR of 22.5% during the forecast period from 2024 to 2029.

However, securing a home loan is not a simple process. While inherently complex, home loans have now embraced automation significantly. In this industry, a company making strides is BASIC Home Loan. The company stands out as India's pioneering automated platform for secured lending, with a specific focus on the affordable housing segment.

In this article, learn more about the BASIC Home Loan, how it started, its founders, business model, products, and services, among other details.

BASIC Home Loan - Company Highlights

BASIC Home Loan - About
BASIC Home Loan - Industry
BASIC Home Loan - Founders and Team
BASIC Home Loan - Startup Story
BASIC Home Loan - Vision and Mission
BASIC Home Loan - Name and Logo
BASIC Home Loan - Product/Services
BASIC Home Loan - Business and Revenue Model
BASIC Home Loan - Challenges Faced
BASIC Home Loan - Marketing Strategy
BASIC Home Loan - Recognition and Achievements
BASIC Home Loan - Key Tools and Software
BASIC Home Loan - Competitors
BASIC Home Loan - Future Plans

BASIC Home Loan - About

The adoption of new technologies has changed everything in how they live their lives. From ordering food to booking a cab to banking, there always seems to be an app for that. However, from a borrower’s perspective, the home loan process remains the most time-consuming and tedious job, requiring them to be physically present at a bank branch.

At BASIC, they want to empower consumers with technology, simplify the process of home buying, and bring financial stability to the lives of families in India. They are here to digitize and automate the home loan origination, documentation, customer verification, and disbursement process from the comfort of their homes.

Founded in 2020, BASIC Home Loan is a fintech company, developing an automated platform for home lending in India. They at BASIC, are building India’s first Neo-Housing Finance Company (Neo-HFC) to increase the penetration of affordable home loans. Banks operate through a branch-led model with fixed costs, so they prefer big-ticket loans to justify unit economics. On the other hand, HFCs lack technology & product innovation and have opaque and tedious offline processes. BASIC utilizes technology & product innovation to convert fixed branch costs to variable costs along with providing a convenient customer experience.

While mortgages in India face challenges due to the absence of a centralized property database and offline requirements mandated by the Reserve Bank of India (RBI), BASIC Home Loan has devised an effective solution. Using their Phygital approach, loan sanctioning occurs through a digital and paperless journey. At the time, offline fulfillment is facilitated by an asset-lite agent network comprising professionals such as Chartered Accountants (CAs) and property dealers.

Since their inception, they have successfully collaborated with 70 lenders and disbursed INR 7000 crores of loans. They prioritize sustainable growth and have achieved profitability in its core business since March 2021. Their commitment to delivering a seamless and stress-free experience for mid and low-income households drives them to continuously innovate and improve.

BASIC Home Loan - Industry

The Indian housing finance industry is on a trajectory of significant growth, driven by increasing demand for housing, supportive government policies, and technological advancements in the fintech sector. Based on this dynamic environment, BASIC Home Loan is strategically positioned to capitalize on these trends.

Industry and Target Market Size:
The industry's target market size can be estimated based on the Reserve Bank of India's data and research reports from brokers and industry analysts. With the total value of housing in India estimated at nearly Rs 150 lakh crore and the increasing trend of residential housing loans as a share of total loans, the demand for new home loans is substantial.

1. Target Market Size for New Home Loans: Approximately USD 175 billion, including the secondary market.
2. Affordable Housing Segment: This represents about 50% of this target market, indicating a significant portion of demand stems from the affordable housing sector.

These figures were derived from authoritative sources like the RBI, along with broker and industry reports, providing a reliable basis for understanding the market's scale and potential growth areas.

Market Share:
Calculating their current market share involves comparing their loan disbursements against the overall market size for home loans in India. With the focus on digitizing the home loan process and targeting the affordable housing segment, its ability to capture a larger market share will hinge on scaling its operations, broadening its lender network, and enhancing its technological offerings.

Industry Outlook in the Next Five Years:
Growth to USD 300 Billion: The industry is expected to grow to approximately USD 300 billion in new home loans by FY 2028, driven by population growth, urbanization, rising income levels, and government initiatives promoting affordable housing.

Technological Advancements: Fintech innovations will continue to reshape the housing finance landscape, making processes more efficient and accessible.

Increased Digitization: The trend towards digitization will accelerate, with more consumers expecting seamless online loan applications, approvals, and disbursement processes.

BASIC Home Loan's Outlook:
In the Next 5 Years: They aim to significantly increase their market share within the growing industry, especially in the affordable housing segment. The company plans to expand their services to more cities, enhance their technological platform, and deepen their integration with lenders to offer a wider range of products.

In the Next 10 Years: Looking further ahead, they envision becoming a leading player in the Indian housing finance market, synonymous with accessible, efficient, and innovative home loan solutions. The company anticipates expanding its product offerings beyond home loans to include related financial services and becoming a comprehensive platform for all housing finance needs.

BASIC Home Loan - Founders and Team

Atul Monga, Founder & CEO of BASIC Home Loan

Atul Monga is the Co-founder and CEO of BASIC Home Loans – a startup working on digitizing home loans and increasing affordable loan penetration for middle and low-income households. Atul found that the affordable housing market has vast potential in his career, yet ecosystem players ignore it. Through BASIC, he wants to ensure hassle-free loans with its automated platform. Before starting his venture, Atul worked in the Indian fintech industry, where he set up and led businesses for various digital lenders. He is an ex- PolicyBazaar and Credit Suisse. He has been an Intrapreneur at Three FinTech and a Mechanical Engineer from IIT Delhi.

He was also an investment banker and helped raise capital for Rubique Technologies - a fintech marketplace, Dogspot- India's biggest online platform for Dogs, Cats, and small pets, and Disha Solar- a solar power installation services provider. Atul's journey spans from being an Investment Banker and Angel Investor to becoming a technopreneur and a fintech specialist. He has held many leadership roles and helped companies in strategic alliances and partnerships, managed their operations, and executed several financial transactions for global companies, which included IPO, M&A, and other equity & debt products.

Kalyan Josyula, Co-Founder & COO of BASIC Home Loan

Kalyan Josyula is the Co-Founder & COO of BASIC Home Loan a platform for automating home loans for middle & low-income households in India. Kalyan is an ex-investment banker and consumer internet business specialist, who has 15+ years of cross-functional (Corporate Finance, Strategy, and Operations) experience in building organizations across e-commerce marketplaces & ride-hailing start-ups in India, SEA & Middle East. Kalyan has played a variety of roles across industries and has worked with large companies such as OLA Cabs, Lazada Group, and Credit Suisse. He has a strong analytical mindset and finance domain expertise, including deep know-how of IT solutions and financial modeling skills. He enjoys planning & executing operational strategy, particularly turning KRAs into actionable targets with budgets and measurable KPIs.

BASIC Home Loan - Startup Story

It all started with the pandemic and the migration of the working population from tier-1 cities to tier-2 and beyond. There were not enough houses for them to set up a living and they opted for renting as a solution. This is what his team and Atul saw as the starting point of BASIC Home Loan’s journey.

Nearly 17 percent of the world's homeless population lives in India. As many as 78 million Indians live in slums. Home loan is considered inaccessible and unaffordable in tier-2 and -3 cities, as banks do not have many branches. While most fintech firms are focused on instant personal loan disbursement, BASIC Home Loan wanted to disrupt the housing loan category.

In a concise span of a little over 1,000-day journey, the company has helped 80,000+ citizens from nondescript backgrounds to have a house of their own. Researching and validating the idea involved a multi-faceted approach. Initially, they conducted an extensive market analysis to understand the current landscape of the housing finance sector, the challenges faced by consumers, and the operational models of existing banks and HFCs (Housing Finance Companies).

This research highlighted the pressing need for innovation in the sector and the potential impact of a digital solution. To further validate the idea, Atul engaged with potential customers through surveys and interviews to gather insights into their experiences, pain points, and expectations from the home loan process. The
feedback overwhelmingly pointed towards the need for a simplified, faster, and transparent process.

Designing and prototyping the initial concept of BASIC Home Loan involved leveraging technology to create a user-friendly platform that could automate and streamline the home loan origination, documentation, and disbursement processes. The goal was to develop a 'Phygital' model that combines the efficiency of digital processes with the assurance of physical interactions through an agent network. This approach was designed to cater to the diverse needs of their target audience, including those not fully comfortable with digital transactions.

Entrepreneurs on Difference in Tier 1, Tier 2 and Tier 3 Audiences

Entrepreneurs from diverse fields were asked - ‘What is the difference between Tier 1, Tier 2, and Tier 3 audience’ Know their viewpoints as per expertise.

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BASIC Home Loan - Vision and Mission

The lending ecosystem in India has been in the process of digitizing for some time. A lot of innovation has happened in the personal and business loans space. But when it comes to home loans, the process is still very traditional and the digital penetration has not increased much.

As a percentage of GDP, mortgages are still around 11 percent. The overall mortgage industry remains an offline industry primarily because India doesn’t have a centralized database of property ownership.

Long-Term Vision: Long-term vision is focused on fundamentally changing how home financing is approached in India, particularly for affordable homes. The company aims to revolutionize the mortgage brokerage industry by becoming the largest online platform for this purpose in India. This vision extends to enhancing the home loan experience for middle and low-income households across the country, particularly in tier 2 and 3 cities.

Short-Term Vision: The short-term goals include making strides in areas such as loan origination, documentation, customer verification, and disbursement, making these processes faster and stress-free. The immediate goal is to provide end-to-end fulfillment through technology for quicker loan disbursements, thus
reducing the time and effort traditionally associated with acquiring home loans.

Core Belief: The core belief behind BASIC Home Loan is rooted in the power of technology to simplify and enhance financial processes. The company believes in empowering consumers through digital solutions, making financial services like home loans more accessible, efficient, and user-friendly. This belief in technological innovation as a tool for financial inclusion and empowerment forms the foundation of the company's operations and goals.

Motto: “To make home loans faster, stress-free & Basic for mid-&-low-income households,”.

BASIC Home Loan - Name and Logo

The name "BASIC" was selected because it directly speaks to the foundational needs of individuals and families – that of securing a home. Housing, being one of the basic needs alongside food and clothing, represents a universal aspiration towards stability and security. The term "basic" also suggests simplicity and ease, reflecting the company's mission to simplify the home loan process, making it accessible and straightforward for everyone.

This choice of name aligns perfectly with the company's aim to address and fulfill a fundamental human need in the most uncomplicated manner possible.

Tagline: Ghar Ka ab Loan Basic Hai
The tagline reinforces the idea that securing a loan for a home should not be a complex or daunting task. It emphasizes the company's commitment to making home loans accessible, affordable, and straightforward for its customers. The tagline is catchy, easy to remember, and speaks directly to the target audience, assuring them that with BASIC Home Loan, the path to homeownership is clear and uncomplicated.

Logo:
The logo, with its blue door, effectively conveys BASIC Home Loan's brand ethos and service philosophy. It's a visual promise of opening doors to homeownership, making the dream accessible and achievable for many. The imagery of the door, coupled with the company's name and tagline, creates a cohesive and compelling brand identity that speaks directly to the aspirations of its target audience.

BASIC Home Loan - Product/Services

The goal of the company is to become the first neo-housing finance firm in India. Accordingly, BASIC has adopted a ‘phygital’ approach to disbursing home loans — customers and onboarded and verified online and an on-ground agent assists the customer in completing the application process, and helps the lender in evaluating the mortgage.

Here is an overview of their offerings:

1. Digitized credit policies with an industry-leading success rate of >75 percent
2. Customer verification/ Risk control (Digi Locker-verified customer screening and onboarding reduce fraud risk)
3. Disbursement support: From origination to registry – Agents do all
4. Customer convenience: Single point of contact for the customer, and they provide step-by-step tracking; The customer requires no branch visit
5. Ease of documentation

Problems Solved:

1. Complexity and Inaccessibility: Simplifies the complex and time-consuming home loan application process, making it accessible and manageable for customers, especially those in underserved areas.
2. Lack of Transparency and Choice: Provides transparency in loan products and offers customers a choice among various lenders, ensuring they get the best deal according to their eligibility.
3. Digital Divide: Addresses the digital divide by offering a phygital approach that combines online efficiency with offline, personalized support.

USP and Innovation:

1. Phygital Model: A hybrid model that combines digital innovation with physical agent networks to offer doorstep service, ensuring the inclusivity of digital and non-digital customers.
2. Product Eligibility Matrix (PEM): An innovative matchmaking engine that uses algorithms to recommend the most suitable loan products based on the customer's financial and property profile.
3. Automated and Paperless Process: Streamlines the loan application, documentation, and verification process, making it faster, more efficient, and environmentally friendly.

BASIC Home Loan - Business and Revenue Model

They operate on a fintech business model that revolutionizes the traditional home loan process by digitizing and simplifying the way customers apply for and receive home loans.

Business Model:

Digital Marketplace: They function as a digital marketplace that connects customers looking for home loans with various banks and financial institutions. This platform allows customers to compare loan offers, apply online, and receive approvals, all in one place.

Phygital Approach: Combining digital processes with physical verification and assistance, BASIC Home Loan ensures that customers, even those in remote or underserved areas, can access their services. This hybrid model caters to the diverse needs of the Indian market, making home loans accessible to a broader audience.

Partner Network: They have established partnerships with over 75 lenders, including banks and housing finance companies (HFCs), allowing them to offer a wide range of loan products. This extensive network ensures that customers can find loan options that best suit their financial needs.

Revenue Model:
Commission-Based: Their primary revenue stream comes from commissions paid by partner banks and financial institutions for each loan disbursed through the platform. This commission is a percentage of the loan amount disbursed to the customer.

Commission Structure: The commission rate paid by the banks to them can go up to 2.25% of the loan amount. This rate may vary depending on the lender, the type of loan product, and other factors.

Free for Customers: The service is offered free of charge to customers, aligning with their mission to make the home loan process more accessible and customer-friendly. By not charging customers, the company ensures that its services are accessible to a wider audience, particularly targeting mid and low-income households.

Profit Margin: BASIC Home Loan operates with a Contribution Margin 1 (CM1) of 35%. This margin reflects the company's efficiency in generating revenue from its operations after variable costs associated with loan processing and disbursement are accounted for.

BASIC Home Loan - Challenges Faced

The most challenging part for BASIC Home Loan, like many fintech startups aiming to disrupt traditional sectors, was likely overcoming the regulatory complexities and consumer trust issues associated with digitizing the home loan process. The home loan sector, deeply rooted in traditional, offline processes,
requires significant paperwork, and face-to-face interactions, and is heavily regulated. Changing this entrenched system to a digital-first approach posed substantial challenges.

Overcoming Regulatory Complexities:

Regulatory complexities present a significant hurdle, especially when attempting to digitize and streamline processes that have long been conducted offline due to legal and compliance requirements.

1. Engaging with Regulators: Proactively working with regulatory bodies to understand compliance requirements and how digital solutions could meet these standards without compromising the integrity or security of the loan process.
2. Building a Compliant Platform: Developing a platform that not only adheres to regulatory standards but also incorporates robust security measures to protect sensitive customer data. This involved investing in advanced encryption technologies and secure data storage solutions.
3. Continuous Monitoring and Adaptation: Keeping abreast of changing regulations and being agile enough to adapt the platform and processes accordingly. This required a dedicated legal and compliance team to ensure ongoing adherence to regulatory changes.

Building Consumer Trust: Gaining the trust of consumers used to traditional, in-person banking relationships was another significant challenge. BASIC Home Loan addressed this issue by:

1. Educating Consumers: Launching educational campaigns to inform potential customers about the benefits of digital home loan processing, including the efficiency, convenience, and security of the platform.
2. Transparent Processes: Ensuring that every step of the loan application, from submission to approval and disbursement, was transparent. Implementing real-time tracking tools allowed customers to view the status of their applications at any time, building trust through openness.
3. Providing Personalized Support: Despite the digital nature of the service, BASIC Home Loan recognized the importance of human interaction. By offering personalized support through dedicated relationship managers and an agent network, the company was able to provide the reassurance and guidance that many customers desired.

In summary, BASIC Home Loan overcame its most significant challenges through proactive engagement with regulators, investment in technology that meets legal and security standards, educational initiatives to build consumer trust, and the innovative use of technology to streamline and secure the home loan process. Through these efforts, the company has managed to not only navigate these challenges but also set a new standard for the home loan industry.

BASIC Home Loan - Marketing Strategy

One of their finest campaigns remains ‘Ab Ghar Ka Loan BASIC Hain’. The campaign resonated well with both the customers and their on-ground agents (christened as advisors). Besides, it also won numerous awards and accolades.

The campaign was executed strategically. An advisor (agent) was onboarded by just asking to fill out a simple form, and the same was projected through various advisor video testimonials with glimpses of the BASIC Home Loan Advisor App on YouTube and Facebook. #AgentNahiAdvisor: Being a home loan agent is not considered a reputed job because of the negative perception around the word ‘agent’. The campaign was designed to bring honor and respect to the profession. Additionally, various surveys were conducted to show user behavior, results of which were floated on social media organically to create interest among advisors as well as consumers alike. Nearly 60+ direct builder partnerships with tech integrations were initiated, all through organic touch points, with the core messaging leading the light, and 12,000+ ecosystem touch points were created through CAs, architects, property dealers, insurance agents, financial consultants, etc.

The next best campaign was centered around the launch of the BASIC Home Loan Agent App, designed to empower agents across India by leveraging technology to connect customers with a diverse range of banking products. The campaign aimed to attract potential agents by emphasizing the ease of earning, the transformative power of technology, and the reliability of the platform. Hosted on YouTube, the strategy included engaging content that showcased success stories and testimonials from existing agents, effectively highlighting the financial freedom and opportunities the app offers. The key messaging, "With BASIC Home Loan, success is guaranteed (Tarakki Pakki)," resonated with the target audience, emphasizing the potential for agents to build a lucrative career with the support of BASIC Home Loan's innovative technology.

The outcome of the campaign was remarkable, leading to a substantial increase in the number of active agents on the platform, which in turn boosted sales and expanded BASIC Home Loan's reach to more customers. This strategy not only enhanced the brand's visibility but also reinforced its position as a leader in the tech-driven transformation of the home loan industry. The success of this campaign has laid the groundwork for future marketing strategies, establishing a model for leveraging digital platforms and narrative-driven content to attract talent and grow the business. Moving forward, BASIC Home Loan aims to scontinue innovating and scaling its operations, further democratizing access to home loans in India through technology and empowerment.

BASIC Home Loan - Recognition and Achievements

The company’s ‘phygital’ approach and marketing communications have been admired by the industry. It won the industry’s most prestigious awards namely :

1. Winner of Agency Reporter Stakes Award 2023 & 2022, Category: BFSI
2. Winner of Agency Reporter Stakes Award 2023 & 2022, Category: Integrated Marketing Campaign
3. Winner of Afaqs Startup Brands Award 2023, Category: Outstanding Use of PR
4. Winner of FiNext Award 2023, Category: Excellence in Finance – Lending
5. State Bank of India-Dun & Bradstreet Startup50 Trailblazer 2023
6. Entrepreneur India, STARTUP AWARDS 2023, Category: Best Social Impact Startup
7. Winner of AdGully IMAGEXX Award 2023, Category: BFSI
8. Winner of AdGully IMAGEXX Award 2023, Category: Brand Development (Service)
9. Winner of AdGully DIGIXX Award 2023, Category: PR/ORM
10. Winner of ET BrandEquity Brand Bharat Award North 2022, Category: BFSI
11. Winner of Campaign India PR Awards 2022, Category: Brand Development (Service)
12. Mint-TechCircle Business Transformation Awards 2021, Category: Social Impact (Good Business)
13. IDC India Industry Innovation Awards (IDCIIA) 2021, Category: BFSI (Innovation in Operations)
14. InkSpell Media Drivers of Digital Awards 2021, Category: Best Social Impact Startup
15. InkSpell Media Drivers of Digital Awards 2021, Category: Best Financial Startup
16. SKOCH AWARD 2023 – Innovation in Home Loan

BASIC Home Loan - Key Tools and Software

Some of the tools that BASIC Home Loan uses are:

• AWS
• ZOHO

BASIC Home Loan - Competitors

BASIC Home Loan competitors include:

• Andro Meda
• My Money Mantra

BASIC Home Loan - Future Plans

Their future plans for the next 1-2 years include significant expansion and diversification efforts aimed at enhancing their offerings and reaching a broader audience. Here are some key initiatives they are focusing on:

City Expansion: They plan to scale their operations from the current 30 cities to 100 cities within the next 1-2 years. This expansion will allow it to reach more customers and provide its services to a wider geographical area.

Home Setup Services: In addition to its core home loan services, they are diversifying into complementary offerings such as furniture, modular solutions, décor, and interior services. By offering these services, they aim to enhance the overall home-buying experience for their customers and provide them with end-to-end solutions for setting up their homes.

Lending Arm Establishment: They are in the process of establishing a lending arm to complement their existing services. This will involve introducing innovative products tailored to underserved segments of the market and leveraging technology to streamline the lending process and make credit more accessible to a wider range of customers.

Digitization of Credit: As part of their efforts to modernize and innovate, they are working towards digitizing the credit process. This includes leveraging technology such as AI and machine learning to assess creditworthiness, streamline application processes, and offer personalized loan solutions to their customers.

Overall, its goal is to continue growing and evolving as a company, expanding its reach, diversifying their offerings, and leveraging technology to better serve their customers and meet their evolving needs in the home finance and lending space.

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FAQs

What is BASIC Home Loan?

BASIC Home Loan is a fintech startup founded in 2020, aiming to digitize and automate the home loan origination, documentation, and disbursement process in India.

Who are the founders of BASIC Home Loan?

BASIC Home Loan was founded by Atul Monga and Kalyan Josyula.

Who are the competitors of BASIC Home Loan?

Some of the competitors of BASIC Home Loan include Andro Meda and My Money Mantra.

What is BASIC Home Loan's revenue model?

BASIC Home Loan operates on a commission-based revenue model, earning commissions from partner banks and financial institutions for each loan disbursed through their platform.