According to a research issued last year by NITI Aayog, India’s gig labour would number 7.7 million in 2020-21, rising to 23.5 million by 2029-30. According to job search site Indeed, the gig economy in India is expected to generate 9-11 million people by 2025.
KarmaLife was formed in 2020 by Rohit Rathi, Naveen Budda, and Badal Malick to help the disadvantaged gig economy people. The fintech platform offers earnings-linked financing to assist pay unforeseen needs and operate day-to-day lives more responsibly to gig workers, contractors, self-employed persons, entrepreneurs, and others.
The roots for Karmalife were established in Rohit’s imagination in 2017, when a landlord reduced the upfront payment to rent a residence after recognising him (Rohit) as a successful entrepreneur who had previously gotten financing from Sachin Tendulkar.
Rohit intended to make the trust and belief that led to the landlord dropping his asking price the foundation of his next foray into the financial sector. He then brought on board Naveen, his Smarton colleague, and Badal, whom he met through a mutual acquaintance.
After leaving Smarton in 2018, Rohit saw that the booming gig economy presented several chances to establish a fintech platform that might accelerate financial inclusion.
COVID-19 merely boosted their economic contribution and aided in the expansion of KarmaLife’s business.
Although the creators began working on KarmaLife in 2019, the firm was not registered until 2020. That year was devoted analysing the market to determine what would and would not succeed.
When developing a product for gig workers, the entrepreneur claims there is a prejudice about the creditworthiness of the users. Unlike a typical bank, which offers services such as loans based on a set of fixed criteria, KarmaLife’s concept is based on dynamicity. It tracks its users’ trips, payment habits, and a variety of other behavioural factors, and then provides financial services based on those readings.
It basically pulls from the Indian cultural theory of Karma, which is the rule that determines an individual’s future based on good or bad deeds. The team then piloted its solution with a well-known firm, with 700 of the 2,000 gig workers using it.
The pilot demonstrated that persons who obtained loans but were unable to pay would actively seek extensions and ensure that the money was repaid. According to the team, the firm gained 700% year on year in terms of disbursement and revenue during the December quarter.
In terms of typical user usage, which includes the company’s capacity to underwrite consumers for a bigger amount and users that require free access, it has also increased from Rs 3,200 to Rs 13,000-Rs 14,000 per user, per month. The credit limit provided by the firm is now 70% of the user’s profits – this varies with each cycle.
KarmaLife is currently attempting to broaden its user base beyond delivery personnel to include security guards and insurance salespeople. The team is also working on a few new products/features, including a longer-term product that allows users to obtain a larger ticket loan (in trial phases). It intends to launch a savings/investment programme within the next three months.
For latest Bollywood Update Follow us on Instagram & Watch on Youtube
