In August 2015, Anshul Raheja stood in front of a billing clerk at an upscale jewellery store in Bengaluru. He was embarrassed and angry. It was his wife’s birthday and she had selected a diamond necklace. He had asked the store to swipe his AmEx card.

Payment declined.

“Try again,” he asked the billing clerk.

Same result.

He had to give up the necklace. He walked out of the store, seething.

“This was not the first time the card wouldn’t work. I could not let it go this time,” says Raheja (name changed on request). It was his pride that was hurt. He had been humiliated in front of his wife and a store full of people.

He got on the helpline and gave them a piece of his mind. He cancelled the card and refused to pay his dues. “I told them that if they stopped calling me for two months, I would clear my dues,” he says.

Raheja says he wanted to pay back sooner but just got lazy. In November, Raheja scored a job at a hot new startup in Gurugram. He decided to apply for a loan to fund his relocation and realized his cibil score was 620.

Banks, typically, do not lend to customers who have a score less than 740 and have outstanding bills. He realized he had outstanding balance of Rs 70,000 on his credit card, which he needed to pay off to be eligible for a loan.

He Googled and found Rupeelend. It agreed to give him a short-term, no-collateral loan.

Rupeelend isn’t the only company around. There are over seven of them, which have cropped up over the past year. Three of the biggest startups have over Rs 10 crore in circulation and claim to give out 150 loans a day. They collectively have over 100,000 downloads and around 50% active users and plan to have a loan book of Rs 100 crore each by the end of FY17. Most of these companies are not accountable to Reserve Bank of India as they exist in the grey area, where they act as a marketplace for non-banking financial companies (NBFCs), which actually dispense the loan. In the US, where such lenders have been around for over two decades, a Pew Charitable Trust study found in 2013 that Payday loan borrowers spend approximately $7.4 billion annually repaying their dues. The average interest rate at such companies there exceeds 450%.

So grave is the problem in the US that there are support groups to hold sessions for survivors of payday loan sharks. In July, Google did its bit and announced on its official blog:”We’re banning ads for payday loans and some related products from our ads system.”

In India, however, the numbers look modest now but may soon become monumental.

The first hit

Financial advisors will tell you it is advisable to get a personal loan to pay off your credit card dues.


Patanjali Pahwa

Patanjali has spent over seven years in journalism. He last worked at Business Standard as Principal Correspondent, where he wrote on startups, e-commerce companies and venture capital. He has worked at an array of institutions, which include Forbes India, Caravan and Outlook Business. He is a Mumbaikar, born and brought up. Patanjali did his BSc in IT from Mumbai University and then got his journalism degree from IIJNM in Bangalore. He is enamoured by Ernest Hemingway and Tom Waits and may try to sneak in references to them in his stories.

View Full Profile

Available exclusively to subscribers of The Ken India

This story is a part of The Ken India edition. Subscribe. Questions?


Annual Subscription

12-month access to 200+ stories, archive of 800+ stories from our India edition. Plus our premium newsletters, Beyond The First Order and The Nutgraf worth Rs. 99/month or $2/month each for free.

Rs. 2,750


Quarterly Subscription

3-month access to 60+ new stories with 3-months worth of archives from our India edition. Plus our premium newsletters, Beyond The First Order and The Nutgraf worth Rs. 99/month or $2/month each for free.

Rs. 1,750


Single Story

Instant access to this story for a year along with comment privileges.

Rs. 500


Annual Subscription

12-month access to 150+ stories from Southeast Asia.

$ 120


Quarterly Subscription

3-month access to 35+ stories from Southeast Asia.

$ 50


Single Story

Instant access to this story for a year along with comment privileges.

$ 20



What is The Ken?

The Ken is a subscription-only business journalism website and app that provides coverage across two editions - India and Southeast Asia.

What kind of stories do you write?

We publish sharp, original and reported stories on technology, business and healthcare. Our stories are forward-looking, analytical and directional — supported by data, visualisations and infographics.

We use language and narrative that is accessible to even lay readers. And we optimise for quality over quantity, every single time.

What do I get if I subscribe?

For subscribers of the India edition, we publish a new story every weekday, a premium daily newsletter, Beyond The First Order and a weekly newsletter - The Nutgraf.

For subscribers of the Southeast Asia edition, we publish a new story three days a week and a weekly newsletter, Strait Up.

The annual subscription will get you complete, exclusive access to our archive of previously published stories for your edition, along with access to our subscriber-only mobile apps, our premium comment sections, our newsletter archives and several other gifts and benefits.

Do I need to pay separately for your premium newsletters?

Nope. Paid, premium subscribers of The Ken get our newsletters delivered for free.

Does a subscription to the India edition grant me access to Southeast Asia stories? Or vice-versa?

Afraid not. Each edition is separate with its own subscription plan. The India edition publishes stories focused on India. The Southeast Asia edition is focused on Southeast Asia. We may occasionally cross-publish stories from one edition to the other.

Do you offer an all-access joint subscription for both editions?

Not yet. If you’d like to access both editions, you’ll have to purchase two subscriptions separately - one for India and the other for Southeast Asia.

Do you offer any discounts?

No. We have a zero discounts policy.

Is there a free trial I can opt for?

We don’t offer any trials, but you can sign up for a free account which will give you access to the weekly free story, our archive of free stories and summaries of the paid stories. You can stay on the free account as long as you’d like.

Do you offer refunds?

We allow you to sample our journalism for free before signing up, and after you do, we stand by its quality. But we do not offer refunds.

I am facing some trouble purchasing a subscription. What can I do?

Please write to us at [email protected] detailing the error or queries.