Surgical Strike on Surgery Finance

Surgical Strike on Surgery Finance

 

Surgical Strike on Surgery Finance


What's your first reaction when you hear about medical loans? Is it that:
  • They are mostly for critical illnesses like heart transplant, cancer treatments, etc.?
  • If people are insured why would they need to take a medical loan in the first place?
  • They are for accidental/emergency surgeries for paying urgent hospital fees?
  • They are an interim arrangement between hospital fees and insurance claims?
  • Loans are usually taken by below poverty line patients or daily/rural wage earners?
  • Loans have extremely high interest rates?

The general assumption is that India has a demographic dividend of a young and fast growing population. (This underlying assumption may seem unrelated, but is closely linked to the business model.)

Let’s do a surgical strike in this article on all the above myths.

It is no secret that consumer loans are the fastest growing segment in the alternative finance space and fintech VCs have gone full-throttle to invest in these businesses regardless of:
  • Their lack of uniqueness of business models
  • Low entry barriers
  • Their poor credit underwriting practices
  • Low standard of technology stack
  • Their heavy dependence on costly offline sourcing channels.
     
But within the personal loan space under general purposes category, the segment that is fast emerging from the shadows is surgery/medical finance. In fact, by certain estimates, the segment occupies anywhere between 10-30% of the loan books of most of the general personal loan providers in India.
Read here for revealing insights and ground reports of customer behaviour and shocking demographic revelations of the country.