“Financial inclusion is a necessary pathway to enable the sustainable growth of any country”

Rahul Gupta, CEO, Avanti Finance

It is about creating a more equitable economic system, that creates agency and supports equal opportunities to access financial services. In India, this journey of taking banking and other financial services to the masses has been paved with challenges in spite of its stated intent of ameliorating poverty. To know more about a digital delivery model to serve the unbanked, Rahul Gupta, CEO, Avanti Finance had an interaction with Rashi Aditi Ghosh of Elets News Network (ENN).”

How is Avanti fostering financial inclusion through its digital platform?

Avanti’s vision is to build a population-scale financial inclusion platform that makes financial services affordable and accessible in a timely manner to the tens of millions of un/underserved households. We have started with small ticket loans for income generation that provide the financially excluded an opportunity to change their economic circumstances through better & sustainable livelihoods. Financial inclusion is a necessary pathway to enable the sustainable growth of any country.

It is about creating a more equitable economic system, that creates agency and supports equal opportunities to access financial services. In India, this journey of taking banking and other financial services to the masses has been paved with challenges in spite of its stated intent of ameliorating poverty.

We are pioneering a digital delivery model based on key operating principles of paperless, presence-less & cashless. For our users this translates to lower friction & costs, building a digital financial footprint that takes them closer to financial empowerment.

To accelerate financial inclusion and build a next-gen platform there is a lot of re- imagining required. Some of this is evident in what we have created that has helped us quickly expand to 22 states, 200 + districts, and 200k households served, and we are just about to take off!

The heart of Avanti’s strategy is our population scale, hyperlocal, hyperflexible digital spine. This is the central engine around which Avanti will scale. This Digital Spine will encode all the sophisticated thinking, modeling, and instruments into a set of easy-to-access APIs, layered with an app that morphs itself to the various roles it is meant to be used by.

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Key advantages & differentiators of Avanti’s platform approach design & technology

Designed for population scale where wafer-thin margins at high volume are sustainable. Presenceless and touchless result in a lower cost of operations moving away from high-cost brick & mortar and high headcount models that are both expensive & have limited scalability.

Co-creation-centric platform fosters hyper-local livelihood innovation and mass customisation. This enables product development on the fly. We already have a diverse range of loan products today that have been tailored to the needs of our users for different livelihoods e.g., Agri, dairy, poultry, and micro SME. The tenures, moratorium periods, and repayment frequency carefully factor in the linked cash flows thereby addressing the user needs vs pushing a standard product.

Crowdsourcing: This is a necessary construct for people who are not addressed by “developed world” institutional capacity. Crowdsourcing for mission-critical uses needs curation, workflows, transparency, and translatability. Avanti is one such instance focused on financial inclusion – where everything from the curation data, the product design itself, local trust, and livelihood models are all crowdsourced.

Livelihood Centric: Avanti‘s focus is singularly on products that result in the livelihood expansion of borrowers. This has significant repercussions on the design of the platform, underwriting and risk management – which shifts from ensuring repayment to ensuring livelihood expansion – that results in a natural capacity to repay. Interestingly, the digitisation of livelihood capacity, and forecasting, combined with the digitisation of social trust reduces the risk.

Multiple capital pools are driven by a minimalistic, API-driven architecture. This is a big edge of the Avanti play with the use of diverse cases solving for priority sector lending, geographical expansion, acquisition digitisation, deployment of capital to new target segments, and concessionary debt for specific loan programs to restore pandemic-disrupted livelihoods.

Avanti recently collaborated with RBI Innovation Hub for Swanari TechSprint. What are you aspiring at with this initiative and collaboration?

Avanti Finance is proud to be associated with RBIH, Reserve Bank of India Innovation Hub as a scaleup partner for Swanari TechSprint. The TechSprint was aimed at advancing digital financial inclusion for women in India. The Inaugural Swanari TechSprint in India will connect fintech’s, financial service providers, innovators and subject matter experts to collaborate, ideate and solve specific problems and code prototype solutions in real time for seven problem statements identified.

Why do you think the economic empowerment of women is important? How do you see this in promoting financial inclusion?

Women are the key to economic development and hence economic empowerment of women is directly linked to economic growth. It also paves the way toward inclusivity and gender equality. Over the years governments, NGOs, and other organisations have opened and executed programs aimed at empowering women economically and socially. Livelihood finance is one such sector that is growing as a powerful instrument with a clear goal of reducing poverty and empowering such women. Income genration loans have enabled thousands of women to use small sums in creative and successful ways to develop livelihoods, improve their families’ well-being, and build up savings.

Also Read | Growth of NBFCs in India

Avanti recognises that sustained impact in low-income households is achieved through the economic empowerment of women and currently, more than 85 per cent of Avanti users are women. We also recognise the need to reduce the gender digital divide that will enable more equitable access to financial services and beyond.

Would you like to tell us about your fundraising? How are you planning to upscale your innovation quotient?

Our last fundraising was over a year ago when we raised USD 40 mm in equity & debt as part of our Series A. This helped us build 3 X growth momentum via a series of customer- centric initiatives e.g., enhancing the user’s digital onboarding, disbursal & repayment processes, a range of flexible loan products, accessibility via trusted partners in their communities, and overall organisation building. We are now poised for a quantum leap to serve a million unbanked households in the next 18 to 24 months and excited to be able to play a meaningful part in financial inclusion that will democratise credit & other financial products in the years to come benefitting the next 100 mm households.

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