INTERVIEW How Korean startup became a financial lifeline for India's middle class
Balance Hero CEO Lee Cheol-won / Courtesy of Balance Hero
India is a massive financial market, yet few foreign startups have managed to break into it as successfully as Balance Hero, led by CEO Lee Cheol-won. Strict regulations and the difficulty of building consumer trust have posed significant barriers to entry.
Lee zeroed in on a sweet spot: India’s massive middle class. Depending on the definition, they account for as much as half of India’s 1.4 billion population, but are often overlooked by traditional finance due to a lack of credit history.
Founded in 2014, Balance Hero operates a nationwide-used microloan app in India called True Balance. It offers short-term loans ranging from 1,000 to 100,000 rupees ($1,170) to India’s middle-class population earning between 300,000 won and 1.2 million won ($876.3) per month.
Using an AI-based alternative credit scoring (ACS) system, the technology enables fast, contactless credit assessments, typically completed in under a minute. By the end of last year, the platform had issued a cumulative total of 1.64 trillion won in microloans.
Lee said he chose India in just seconds.
"The market was virtually limitless, and the pace of growth was incredibly fast. Acting quickly to enter India became one of our biggest competitive advantages," Lee told The Korea Times in a recent written interview. "Our strength lies in identifying real challenges in the world’s fastest-growing markets and solving them."
In 2024, Balance Hero posted 144.2 billion won in revenue and 35.5 billion won in operating profit — a 70 percent and 121 percent increase, respectively, from the previous year. Revenue in 2024 has grown nearly sixteenfold compared to 2020.
Its journey in India began with a mobile micro top-up service designed for India’s prepaid phone users. Nearly a billion Indians use prepaid mobile plans, often topping up their data or talk time in small increments. Lee introduced a service that showed users their remaining balance and made it easy to recharge on the go.
A promotional image of True Balance, an app operated by Balance Hero / Courtesy of Balance Hero
With the app surpassing 100 million downloads, True Balance quickly became a widely recognized name in India.
Just five years after entering the market, in 2019, the company received official approval from Indian authorities to begin offering lending services — a key turning point in its growth.
Only six companies across India have secured both non-banking financial company and prepaid payment instrument licenses from the Reserve Bank of India. Balance Hero is the only foreign company to do so.
For this new business opportunity, the startup developed a proprietary ACS system. Outside of India’s upper classes, the vast majority of the population lacks a traditional credit score as used by banks.
The system evaluates over 12,000 smartphone-based data points, including app usage, location patterns, social behavior, SMS history and even the type of smartphone used. Once users install the app and consent to the terms, the system analyzes the provided information to assess creditworthiness.
The company has also recently expanded into the platform business, in which Indian financial institutions pay a fee to use Balance Hero’s ACS to sell their products. Revenue from this segment now accounts for 32 percent of the company’s total earnings.
Lee said succeeding in the Indian market demands deep localization and agile regulatory response.
The service supports seven languages, reflecting India’s multilingual nature. It is currently available across 97 percent of India based on postal code coverage, with 80 percent of its users residing in small cities and rural areas.
Balance Hero's office in India / Courtesy of Balance Hero
"Success comes from truly understanding Indian consumers and market dynamics, and crafting strategies tailored to the local infrastructure and regulatory environment. You can’t simply transplant an existing business model," Lee said. "Just as crucial is building a company culture and systems that can quickly adapt to regulatory shifts."
For instance, during the COVID-19 pandemic in 2020, the Indian government announced a nationwide loan moratorium for all borrowers, threatening the startup’s business. The company weathered the critical moment thanks to restructuring efforts and investors, who recognized the company’s growth potential. In 2020, Krafton Chairman Chang Byung-gyu, SoftBank Ventures, Naver and Shinhan Capital stepped in with a 30 billion won investment.
Lee also noted that today, as India’s digital finance sector grows at an impressive 50 percent annually, regulatory guidelines are maturing rapidly to support this expansion. "We’re proud to have been one of the first companies to leverage the 'Digital India' initiative," Lee said.
Balance Hero’s ultimate goal is "Finance for All," providing a wide range of financial services to underserved communities. While the company currently focuses on credit and payment services, it also plans to expand into areas such as insurance and micro-investments.
"We are also exploring opportunities to enter other countries where access to financial services remains limited," Lee said. "However, our target customer base, or the so-called 'next billion,' will remain the same."
Lee added, "Moving forward, we’ll continue working to solve real challenges in local communities and ensure more people can benefit from accessible financial services."