Mehul Nath Jindal, Eeshan Sharma: Taking credit to those who need it most

How do chances stack up for the success of a college student—Mehul Jindal, around 19 then—who along with three friends started a consumer credit venture BharatX in the competitive financial services environment, a few weeks before the Covid-19 outbreak in 2019. Not very high. The lack of business experience, capital and a networking reach might have stared back at them as real concerns for investors at that time.

A little over two years down the line—after a Reserve Bank of India (RBI)-induced moratorium and two pandemic waves—BharatX and Jindal are riding high. In December 2021, it announced the raising of $250,000 (₹1.87 crore) in a pre-seed round, led by Java Capital and backed by Y Combinator, and marquee angel investors such as Shaadi.com’s founder Anupam Mittal and HSBC’s former chief operating officer (COO) Ritesh Jain, alongside other industry veterans.

Jindal and his co-founders Eeshan Sharma (also COO), Siddharth Venu and Shyam Murugan—who are all currently studying at the National Institute of Technology (Trichy)—acquired initial funding in early 2020 from some industry veterans, whose names they prefer to keep unidentified. BharatX provides embedded credit, where it partners with brands and websites to provide a credit feature in their apps to serve customers who need the credit.

But what convinced the investors was the fact that the four co-founders understood the problems of lack of credit availability to the needy and the best route to provide it. The availability of credit through banks and NBFCs is usually focussed towards the 50-odd million people in large cities. But there is a need to help direct-to-consumer businesses and low-income people in micro-markets, which are often ignored by large banks.

While the access to formal credit has been improving over the past five years with the entry of small finance banks and fintechs, these institutions follow their own algorithms for customer profiling and their ability to pay. Micro-lenders, on the other hand, offer loans to low-income groups, but at steep rates of interest. “Nobody wants to put their neck on the line by giving credit to people who need it most,” says Jindal.

BharatX’s collaboration with clients has jumped 10-fold in a few months to 30 brands now, compared to three last October.

Bengaluru-based BharatX has products such as a ‘khata’ plan for essential sellers to buy groceries and pay later; a ‘Pay-in-3’ option that allows customers to split their purchases in three, interest-free instalments and a ‘Try-and-buy’ option for ecommerce platforms. BharatX claims to have an “approval rate” of 45 to 55 percent, which indicates that more than half of the people approached through BharatX’s technology platform get the credit they seek. The plan for 2022 is to raise more capital, scale up further and increase the credit stack on offer through new products.

“I was pleasantly taken aback by the understanding and depth of knowledge of the subject that Mehul and the team have at such a young age,” says Karteek Pulapaka, co-founder of Java Capital, which has invested around ₹1.5 crore in BharatX. “The company understands the market it is trying to reach.”