Make a loan, change the world
Leveraging his Asset Direct platform, Adam Rice has set out to reimagine consumer lending in India. And it’s not hard to believe he’ll really do it
Photo: Adam Rice, founder of Asset Direct of Canada Inc.
REGULAR VIEWERS OF Law and Order quickly learned New York City seems to have a bodega on every block. The small, family-operated grocery stores have been the site of many of a murder and investigation over the last 22 years and 462 episodes.
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Adam Rice is as much a fan of Law and Order as anyone else. His bodega interest, however, is focused elsewhere. India has more than 12 million Kirana shops, the country’s version of the bodega. Had there been an Indian Law and Order spin-off, no doubt much of the action would have been Kirana-based.
Rice’s interest in Kirana shops goes beyond a general curiosity about shopping patterns in foreign countries and possible tie-ins to American courtroom dramas. Kirana shops, as it turns out, may well be the key to the next phase of growth for his company, Asset Direct of Canada Inc. After starting the company in 2015, he is working hard to, “change the world,” by offering personal financial products to hundreds of millions, if not billions, of people struggling to get credit.
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On first inspection, it’s difficult to match Rice’s ambitions with his firm’s headquarters. Asset Direct is housed in a typically nondescript Farhi building in downtown London. Its most intriguing feature may well be the oversized white board in the conference room, where multi-coloured charts, graphs and concepts merge to give visitors a look into Rice’s active imagination and dreams.
But it’s not just about dreams. His larger-than-life goals are matched by a degree of determination best demonstrated more than a decade ago. In 2011, he was seriously injured in a motorcycle accident in China. His recovery was long and painful, interrupted many times by an addiction to painkillers and almost everything else imaginable.
He’s had more second chances than a trust fund kid (which he’s not) and nearly died several times. Sober now for more than eight years, he employs 18 people, half in Canada and half in India. His co-founder, Chris Healy, is a partner and COO. Other owners include some venture capitalists and angel investors.
“Only seven per cent of Indians can get a loan from a bank, and only three per cent have a credit card. There are incredible opportunities. We’re using the same model we’ve used in Canada, but the potential is so much larger” ―Adam Rice
“We’ve been very successful connecting people with fintech lenders and other financial products in Canada,” he says.
The company does that through its LoanConnect brand, linking credit seekers with companies such as LowestRates.ca and GreedyRates. It has 45 partners in total; in 2020 it generated $3 billion in loan applications in Canada. Since it began operations, more than 600,000 Canadians have secured funds using its portal.
“We’ve developed the tools to connect people who don’t have access to credit or might be looking to build a credit rating. Three years ago, we commissioned some research to see where our model would best work around the world. The answer was India, Brazil, South Africa and Australia.”
Since India does business in English and dwarfs the other potential markets, Rice decided to focus there and made several Covid-complicated trips in the last two years. He’s seen more Kirana shops than your average Indian citizen, understanding the unique relationships shop owners have within their communities.
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It’s those relationships Asset Direct — branded as CreditLinks India — will lean on to introduce itself to millions of Indians. But that’s just the delivery system. His plans are much bigger than that.
“Only seven per cent of Indians can get a loan from a bank, and only three per cent have a credit card. There are incredible opportunities,” he says. “The market is ready for a product that helps people build a credit history. We’re using the same model we’ve used in Canada, but the potential is so much larger.”
It’s not just potential borrowers Rice is targeting in India. He’s also keen to work with the owners of all those Kirana shops. They can sign up and sell financial products, using CreditLinks to back them, “building their own book,” as he puts it.
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“Someone gets a credit card, and one of our lender partners issues a loan accessed through the card. They use the funds for their business or whatever they need, pay it back and establish a credit history. Once they do that, the card becomes credit bearing.”
But that’s not all. The card serves as the client’s entrée to still more products: investments, loans, insurance — limited only by the variety of partners Asset Direct can sign up. As of last April, CreditLinks is available in 2,500 Kirana shops. But Rice has partnered with a company that delivers pre-paid phone cards to 50,000 of those shops to get his product into many more very quickly. In fact, he expects to be in 100,000 stores by this summer.
The store owners get a cut of whatever activity is generated from selling the product. And they continue getting it as their customers access more and more financial services using it.
The sign-up process is simpler than some self-check grocery arrangements in Canada.
CreditLinks provides a small counter display with QR codes, front and back. Potential customers scan the code and sign up almost immediately through their phone. The shop owner scans the back side code to register and be “onboarded” with CreditLinks, establishing a relationship designed to last years. But it doesn’t end there. The owner gets a phone call every week (from a call centre in India calling people in India), offering encouragement, sales tips, goals and other help.
“It’s based on the model I learned when I worked at Sun Life,” Rice says. “But we adapt everything to work in whatever culture we’re operating in. People in India are used to using their phones like this, more so than here.”
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Indeed, Asset Direct is running the same kind of program in Ontario, albeit on a much smaller scale. It’s in 15 Ontario stores, going more slowly where shoppers don’t have the same communal relationship with local shop owners.
In Canada, LoanConnect has a conversion rate of about 20 per cent. One in five people who explores the site applies for a product. Rice hopes to achieve a conversion rate of seven per cent in India. If he gets close to that and is in 100,000 stores sometime this summer, well, the sheer numbers will dwarf anything happening in Canada.
That is only the beginning of course. The company is partnering with an ATM company allowing people to apply for loans at the ATM, be approved in under a minute, and walk away with the cash. Rice hopes to have a pilot project with 500 machines across India up within six months.
Another pilot project will put CreditLinks QR codes in 250 motorized rickshaws in Delhi.
“There are incredible opportunities. We’re using the same model we’ve used in Canada, but the potential is so much larger” ―Adam Rice
And then there’s the data. Scrubbed of individual identities, it could be valuable for many clients. Before he’s finished mentioning that possibility, he’s onto the Rakuten model, potentially using his growing Indian sales network to sell almost anything, with points and bonuses for clients on all sides of the goods and services world.
There’s also the most recent investor, SOSV of New York, which bought in last year and is already operating in India, partnering with Google Pay and gig workers to deliver groceries.
All told, Rice is going to need a bigger white board.
Meanwhile, for brand awareness as much as anything else, Asset Direct is running a crowdsourced fundraising campaign, “so everyday Canadians can get involved in what we’re doing.” The goal is to raise somewhere around $1 million, which isn’t pocket change, but also isn’t the primary fundraising activity.
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Beyond all the numbers, there’s an altruistic side to Rice’s venture. It’s true, his market in Canada and India is folks who have to pay more for loans because they can’t get the best rates from banks and other grade-A lenders. And sure, not everyone will follow the model of building a credit history and moving up the lender ladder to better rates and products.
But when he looks around some other options people use, with obscenely high rates, Rice believes his way is better. “And let’s be honest, it’s in our interest to help people move up to get another loan at a better rate and to keep using the products our partners provide.”
In the developing world, he believes Asset Direct, and its various locally branded divisions, will help millions of people to enter the financial world and improve their lives. That’s when he says the real goal is to change the world. He says it with a straight face; he means what he’s saying. And it’s not hard to believe he’ll really do it. Christopher Clark