WeRize, a financial services platform focused on small-town India, has achieved operational profitability in 2-1/2 years of starting up. The company attributes this feat to its social distribution model and the lean approach to growth.

It has built a network of 10,000 social partners or freelancers at more than 1,000 small towns in India. These partners are usually LIC agents or common service centre agents – people who are digitally literate and are trusted by the local people. Interestingly, the company does not have any office in 1,000 cities where its social partners operate.

‘No physical presence’

“The management of our social partners is done completely through our tech platform and that’s where big cost saving happened. Other fintechs in our space establish a physical presence in each city they expand along with spending on building a team — which is capital intensive. But our model is different, we do not have any office or payroll team member outside Bengaluru,” Vishal Chopra, Co-Founder, and CEO, WeRize told BusinessLine .

WeRize develops and distributes a portfolio of customised credit, group insurance, and savings products to people earning between ₹15,000-30,000 per month in small towns.

Chopra noted that this segment faces challenges like getting access to loans, credit cards, insurance products as most banks do not serve this customer base because of their low lifetime value.

When it comes to taking a loan, customers belonging to this segment are forced to approach moneylenders for their emergency credit requirements and end up paying exorbitant interest rates. Health and Term-life insurance are not designed for this segment of customers either.

Earning via commission

The company claims to have a customer base of 500,000 families. For acquisition, WeRize depends on its network of freelancers who earn a commission on each sale (collection in case of loans) they make for the platform. A successful social partner with WeRize earns an average of ₹5,000 per month and 20 per cent of the partners are said to make more than ₹10,000 per month.

Commenting on what helped the company to keep the costs low, Chopra said, “Our loan defaults are 0.5 per cent. In the last two years, our write-off was just a couple of lakhs and that too because of the unfortunate deaths during Covid. Further, we also have no marketing costs, which typically makes 30-40 per cent of the costs of fintech companies.”

WeRize claims to have a top-line of nearly $6 million annualised run rate, which is said to be doubling every six months. “Three years from now, we want to reach $150 million to $200 million top-line run rate and by 2025 we plan to go for an IPO as well. In terms of customers, the company aims to onboard 50 lakh customers in the next two years and grow its presence in over 4,000 markets,” he added.

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