Abhinov Balagoni Of PaxCredit On How They Are Helping To Promote Financial Inclusion

An Interview With Orlando Zayas

Gather user feedback. In our case, our initial users helped us learn more about their motivation for using our product. Listening to them definitely helped us identify our next product enhancements and new product requirements.

Most of us take it for granted that we can open a bank or a credit card. But the truth is, according to the World Bank, close to one-third of adults — 1.7 billion — are still unbanked, and have no access to a transaction account. About half of unbanked people include women in poor households in rural areas or out of the workforce. What can be done and what is being done to promote more financial inclusion? Authority Magazine is starting a new series about Companies Helping To Promote Financial Inclusion. In this series we are talking to leaders of companies and organizations who are helping to promote financial inclusion.

As part of this series I had the pleasure to interview Abhinov Balagoni.

Abhinov Balagoni is the Founder and CEO of Pax Credit, a Techstars company, that eases the financial needs of international students. Previously, Abhinov was part of the Entrepreneur First (EF) cohort in Singapore and completed his education from Singapore Management University and National Institute of Technology Warangal.)

Thank you so much for doing this with us! Before we dig in, our readers would like to ‘get to know you’. Can you tell us a bit about how you grew up?

I enjoyed playing computer games growing up and pursued engineering as a consequence. During my undergrad, I got intrigued by technology entrepreneurship as a career and have been working towards fulfilling that goal post-graduation. I’m currently building a financial technology company aimed at international students to ease their financial needs.

Is there a particular book that made a significant impact on you? Can you share a story or explain why it resonated with you so much?

Delivering Happiness by Tony Hsieh has been a great influence on me. The book focuses on building a team aligned with a common goal and how effective that team would be for winning in the market. I remember an anecdote where a customer support representative helped a potential customer find the closest pizza places near her hotel late at night, although it was not part of her job. This incident helped me understand how powerful a team working towards a common goal would be.

Do you have a favorite “Life Lesson Quote”? Do you have a story about how that was relevant in your life or your work?

One line that has resonated with me is that we have the freedom to make a choice in most cases but do not have the freedom to walk away from its consequences. This line of thinking helps me while evaluating critical decisions.

How do you define “Leadership”? Can you explain what you mean or give an example?

I am learning to be an effective leader on the job. From my understanding, leadership is about building synchronization across teams and setting the direction while holding yourself accountable for your team’s outcome.

Can you share the most interesting story that happened to you since you began your career?

I learned that trust is a multiplier factor in financial services from an elderly parent in Bangalore. He tried sending money to his son living abroad on a Friday but couldn’t do so before the cut-off time. So, to ensure timely funds transfer on Monday, he offered to transfer funds (approx USD 10K) to my personal account despite knowing me only through phone calls and transacting with our company only once prior. I couldn’t accept his suggestion, but that incident gave me an incredible insight into people’s relationships with money and trust.

Ok, thank you for all that. Now let’s move to the main focus of our interview. Let’s start with a basic definition so that all of our readers are on the same page. What exactly is Financial Inclusion?

Financial inclusion is about making sure that people or organizations have access to financial services and products such as payments, savings, credit, and insurance in an affordable way to meet their needs.

What does it mean to be “underbanked”?

Underbanked is a group of individuals or businesses deprived of access to financial services such as credit cards or loans traditionally offered by banks.

For the benefit of our readers, can you explain some of the typical reasons why a person might be underbanked? Why can’t they just walk into the local bank and open an account? Why can’t they simply open an account online?

When you are a newcomer to a country, the local banks’ standard documentation requirements for identity & address are not necessarily met. The person is often required to submit alternate documentation, thus limiting their access to open bank accounts. These limitations are also extended to the person while trying to access products such as credit cards and loans.

Can you tell our readers a bit about your work to promote Financial Inclusion? Without saying names, can you share a story about a person who was helped by your initiative?

One of our users had to travel to the US to attend to his family member’s medical treatment. He was planning to spend tens of thousands of dollars covering medical bills and was looking for a safer, easier, and more cost-effective way to carry funds. If only he could set up a bank account in the US online pre-arrival and transfer funds from his local bank account, but that was not an option. As an alternative, the user carried funds using our multi-currency card, saving hundreds of dollars on exchange rates and transaction costs. This incident helped us realize the market need for a simpler way to create a bank account for newcomers in a country.

This may be obvious to you, but it will be helpful to spell this out. Can you articulate to our readers a few reasons why it is so important for businesses to promote financial inclusion?

There is a substantial lost opportunity for businesses. Assume that you are running an educational institution with a significant intake of international students. If your online application accepts only card payment options, then you would effectively lock out students from emerging markets where credit card/debit card penetration is much lower. Similarly, lack of access to affordable credit for international students without collateral limits your educational institute’s reach in the market.

Ok. Here is the main question of our discussion. You are an influential business leader. Can you please share your “5 Steps Business Should Take To Promote Financial Inclusion”? Kindly share a story or example for each.

Let me share this through an example of how Pax Credit addresses financial inclusion.

1. Identify the customer segments that are underbanked

At PaxCredit, we aim to help international students and immigrant workers with their cross-border financial needs such as alternate payment methods, no fees savings account, and access to affordable credit. Discovering the customer segment is the foundation for building better, more inclusive financial solutions.

2. Determine the specific problem in the need of a better solution

Once we had identified our target users, we explored the user journey and realized that international money transfer service is widely used and still has room for significant improvement. Despite living in a high-paced world, our traditional banking systems are still rusty and take up to 4 days to complete an international transfer. As people expect money transfers in minutes, that’s what we have built.

3. Build the minimum viable product

We realized that price, transfer speed, and ease of use are key factors for our users. To meet their expectations, we secured payment partners for market-leading pricing and created an instant funds transfer network. We built an app keeping in view our target user’s behavior and preference for transparency through our real-time funds transfer tracking feature.

4. Gather user feedback

In our case, our initial users helped us learn more about their motivation for using our product. Listening to them definitely helped us identify our next product enhancements and new product requirements.

5. Repeat the process!

After gathering users’ insights, iterate steps 1–4 to keep improving your services by adding new features, refining existing products, and targeting new customer segments, as they might change over time.

You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

I believe programming/coding should be an integral part of the school curriculum. Coding can empower people and help them explore their creative side in any field of their interest. The current set of no-code tools would be a great starting point for anyone planning to start coding.

Is there a person in the world, or in the US, with whom you would like to have a private breakfast or lunch, and why? He or she might just see this, especially if we tag them. :-)

That would be the multi-talented globetrotter — Priyanka Chopra Jonas. Although she started her career as an actor in South Asia, she became a global entertainer. She didn’t just stop there but broke into other industries — music, TV. On top of that, she is building her own film production company and investing in startups such as Holberton School, Bumble, HumanCo. Eagerly waiting for her role in the upcoming movie, The Matrix Resurrections!

How can our readers further follow your work online?

You can follow my work on LinkedIn (@beabhinov) and Twitter (@beabhinov)

This was very meaningful, thank you so much. We wish you only continued success on your great work!