Investment Thesis

The Indian digital lending sector is set for significant growth, with KreditBee positioned as a leading player offering short-term personal loans to underserved customers. The company benefits from a scalable business model, strong financial performance, and innovative technology, targeting a market of over 500 million underbanked individuals. With favorable regulatory support and strategic partnerships, KreditBee presents a compelling investment opportunity in the expanding fintech landscape.

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Investment Thesis

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Aman Singh

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Investment Thesis: Investing in the Digital Lending Sector – Focus on KreditBee

Introduction

The Indian digital lending sector is poised for exponential growth, driven by increasing internet
penetration, rising smartphone usage, and a growing credit gap in the formal banking sector. As
of 2023, India’s digital lending market was valued at $270 billion and is expected to grow at a
CAGR of 22% over the next five years. KreditBee, a leading player in the Indian digital lending
space, has shown remarkable growth by providing short-term personal loans to underserved
customers through a data-driven, AI-powered platform.

Investment Thesis

Investing in KreditBee presents a compelling opportunity due to its scalable business model,
strong market positioning, and the increasing demand for alternative lending solutions in India.
KreditBee targets a massive market of over 500 million underbanked individuals and
leverages proprietary credit scoring models to assess risk and deliver quick loan disbursements.
The company’s ability to use alternative data sources, including telecom usage and social media
behavior, to evaluate creditworthiness provides a significant competitive edge.

Key Arguments Supporting the Investment

1. Large and Growing Market: India’s digital lending market is expected to reach $1.3
trillion by 2030, with increased government support for financial inclusion and
digitization. KreditBee is well-positioned to capture a large share of this growth.
2. Strong Financial Performance: KreditBee disbursed over ₹12,000 crore in loans in
2023, with a consistent improvement in repayment rates and customer acquisition costs.
The company’s net profit margin has increased by 35% YoY, reflecting strong unit
economics.
3. Robust Technology and Risk Management: KreditBee’s AI and machine learning
models ensure accurate credit assessment and fraud detection, contributing to a low
default rate of <2%.
4. Strategic Partnerships and Scalability: KreditBee has partnered with leading financial
institutions like ICICI Bank and HDFC Bank, expanding its loan offerings and increasing
customer trust. Its asset-light model allows for quick scalability without significant capital
expenditure.
5. Regulatory Tailwinds: RBI’s recent guidelines supporting the growth of digital lending
platforms and the inclusion of alternative data sources for credit scoring further
strengthen KreditBee’s growth prospects.

Conclusion
KreditBee’s strong market positioning, innovative use of technology, and strategic partnerships
create a clear path to profitability and long-term value creation. Its focus on addressing the
credit gap for underserved customers in India presents a significant social and financial impact,
making it an attractive investment opportunity in the rapidly expanding fintech landscape.