Access to financial services is one of the important facets in inducing growth and reaching the Sustainable Development Goals. Then, there has to be, according to UNSDG 9, inclusive and sustainable industrialization that will foster innovation and resilient infrastructure. These goals include the improvement of access to financial services—so important in the course of economic development, most importantly in developing and underdeveloped regions.
Financial inclusion allows people and businesses access to necessary financial services: savings, credit, insurance, and payments. This access will enable them to undertake long-term investments in education, health, and business and hence drive growth and reduce poverty. Despite the tremendous success of FinTech, there exist to this day innumerable barriers to financial access—in many regions, especially in the developing world—due to lack of infrastructure, regulatory barriers, and socio-economic factors.
Startups and businesses have major roles to play in bridging these gaps through innovation or the provision of solutions that enhance financial accessibility or are transformative, leading to increased access to financial services. This paper reviews some organizations that have made huge contributions toward the same goal: improving access to financial services, with regard to actions, impacts, and how they merge with UNSDG 9.
1. Bharat Inclusion Initiative
Founder: Sanjay Jain
Founded: 2018
Location: Bangalore, India
The Bharat Inclusion Initiative (BII) is a committed organization to improve financial inclusion in India. It works on solutioning around the challenges that exist in access to financial services for underserved communities in the country. BII operates through a blend of research, incubation, and acceleration programs that would foster innovation in the space of financial inclusion.
Actions and Impact
Incubation and Acceleration Programs: BII offers support to a class of startups working on FinTech that seeks to improve access to banking, credit, insurance, and digital payments. BII will help such startups scale their solutions with mentorship, funding, and resources to reach many more.
Research and Development: BII does extensive research in identifying the hindrances to financial inclusion and designs the strategy to surmount them. This research forms the backbone of information that drives policy decisions and steers the creation of new financial products and services.
Collaborations and Partnerships: The program works with financial institutions, the government, other NGOs, and other stakeholders to create a broader enabling environment that furthers financial inclusion. Such partnerships are very important in delivering solutions that are scalable and sustainable.
Key Achievements
Innovation in Digital Payments: BII has had a very key role in pushing digital payment innovations to meet rural and semi-urban needs, thereby making transactions accessible to people who lack traditional banking and at a cost that is affordable to them.
Policy Advocacy: The work of BII, through research, has helped influence quite a number of policy changes, thereby paving the way to access financial services by underserved populations. This includes pushing for regulatory frameworks that can support fintech innovations.
2. Kiva
Founder: Matt Flannery and Jessica Jackley
Founded: 2005
Location: San Francisco, USA
Kiva is a global nonprofit organization that connects people who want to lend money with those who need it most through a crowd-lending platform. At Kiva, loans will be offered to the world's underserved populations by capitalizing on the power of the internet and the reach of a global network of microfinance institutions to help people create better lives and businesses for themselves.
Actions and Impact
Crowd-Lending Platform: Kiva's platform facilitates people lending as low as $25 to entrepreneurs and small businesses across the globe. A model like this democratizes access to capital and empowers people to directly finance things that matter to them.
Partnership with Microfinance Institutions: Kiva partners with local microfinance institutions in identifying and vetting borrowers. Partnerships ensure that the funds go to the very poor and are utilized effectively.
Interest-Free Loans: Such loans from Kiva, unlike traditional lenders, are interest-free, which means it is relatively easy to pay back and invest in one's future. Thus, this model eases the financial load on the borrower to attain financial stability.
Key Achievements
Global Reach: Kiva has lent over $1.5 billion to more than 3.5 million borrowers in 77 countries to date. In many ways, this remarkable reach of the organization at large shows the impact they have on including finance around the world.
Support for Women and Vulnerable Populations: A huge proportion of Kiva's loans go to women and other underprivileged groups for help in bridging both the gender and economic gaps in financial access.
3. Janalakshmi Financial Services
Founder: Ramesh Ramanathan
Founded: 2008
Location: Bangalore, India
Janalakshmi Financial Services (now Jana Small Finance Bank) is one of India's largest microfinance institutions, specifically focused on serving the urban poor. The organization's mission is to meet the financial requirements of those who have been bypassed by traditional banks.
Actions and Impact
Microfinance Services: Janalakshmi offers various microfinance services that extend to small businesses, housing, education, creation of assets, consumption smoothing, and investing in the future.
Urban Focus: Unlike many microfinance institutions that primarily operate in rural areas, Janalakshmi spots the urban poor people. It therefore addresses the challenges of low-income earning families living in urban areas, which are very different.
Financial Literacy Programs: As a way of ensuring that the clients effectively manage their money flow, Janalakshmi provides training on financial literacy. In this regard, the borrower is given a chance to learn how to budget, save, and borrow wisely, hence increasing their skills and knowledge in finance.
Key Achievements
Large Client Base: With over 5 million customers, Janalakshmi has done a great deal in improving access to finance among the urban poor in India.
Transformation into a Bank: Janalakshmi turned Jana Small Finance Bank in 2017. The addition of full-fledged banking services makes it easier for the organization to offer more financial products and services.
4. Lendingkart
Founder: Harshvardhan Lunia and Mukul Sachan
Founded: 2014
Location: Ahmedabad, India
Lendingkart happens to be one of the foremost Fintech companies in India, explicitly founded with a nagging concern for ease and speed in the context of working capital availability to the SME category. Lendingkart would use technology and data science in simplifying the loan process for offering financial services to unserved businesses.
Actions and Impact
Digital Lending Platform: Lendingkart's platform uses data analytics to check the creditworthiness of businesses and hence enables the approval of loans at a faster rate. The disbursal is also done at a quick rate. This digital approach reduces paperwork and hastens the loan process, making it more accessible to SMEs.
Flexible Loan Products: It offers flexible loan products that meet the requirements of SMEs. These include short-term working capital loans for business and loans that will aid businesses in managing their cash flow and investing in growth opportunities.
AI and Big Data: Lendingkart uses artificial intelligence and big data analytics in loan appraisal. This helps the company to lend to businesses that may not have traditional credit history but are very strong on other potential parameters that come out through alternative data.
Key Achievements
Loan Disbursement: Lendingkart has disbursed over INR 10,000 crores in loans to more than 100,000 SMEs across India, thereby making a huge impact on financial inclusion.
Awards and Recognition: The group has won several awards pertaining to its innovations in digital lending and financial inclusions that underline its leadership in the Fintech industry.
5. Indifi Technologies
Founder: Alok Mittal, Anup Agarwal, and Siddharth Mahanot
Founded: 2015
Location: Gurgaon, India
Indifi Technologies is a fin-tech company that offers financing solutions to small businesses in India. The platform collaborates with different sources of data and financial institutions to give tailored credit products, thereby meeting the exact requirements of SMEs across sectors.
Actions and Impact
Sector-Specific Loans: It provides loans to businesses in the travel, retail, and e-commerce segments. From that perspective itself, this sector-based approach attempts to ensure that the financial products will suit business needs of different industries.
Data-Driven Credit Assessment: This company relies on a data-driven approach toward assessing creditworthiness. Looking at transaction data and sales figures among other indicators on business performance helps Indifi extend credit to those businesses which otherwise may not get any loans from banks.
Partnerships: Indifi integrates its lending services with a host of online platforms, payment processors, and other partners. This greatly increases its reach and makes access to credit easier for businesses through familiar channels.
Key Achievements
Loan Portfolio: Indifi has facilitated loans to thousands of small businesses, greatly improving their access to credit and hence befitting their growth.
Impact: Its innovative financing approach has made it possible for a number of SMEs to expand operations, thereby creating jobs, and in some cases, starting to contribute towards economic development.
6. FinBox
Founder: Rajat Deshpande, Vasishta Rao, and Pradeep Garg
Founded: 2015
Location: Bangalore, India
FinBox is a digital lending platform that deploys data and technology to deliver credit solutions to unserved and underserved segments. It aims at increasing financial access to credit with new, innovative products and services.
Actions and Impact
Alternative Data: FinBox uses alternative data sources like mobile usage patterns, transaction history, and social behavior as a factor in evaluating creditworthiness. This helps in including those people who do not have traditional credit histories.
Embedded Finance: It provides embedded finance solutions, giving its users the ability to not only leverage its platform but also to be able to access lending services on a range of digital platforms. Essentially, this is making credit more accessible for users through the apps and services they already use.
Customized Credit Products: FinBox develops customized credit products that serve the demand of the different segments of users—for instance, small businesses or gig workers— or are first-time borrowers. These products cater to specific financial needs and also promote financial inclusion.
Key Achievements
Partnerships: FinBox has partnered with numerous financial institutions and FinTech companies to maximize its access and ensure a variety of credit options.
Impact: Access to credit has massively improved for the unserved, underrepresented, which has contributed tremendously to economic growth and financial stability.
7. MicroGraam
Founder: Rangan Varadan
Founded: 2010
Location: Bangalore, India
MicroGraam is a peer-to-peer lending platform that connects rural entrepreneurs and low-income households with socially conscious investors. The organization was established with the purpose of bridging the gap between urban investors and rural borrowers by way of promoting financial inclusion and economic development.
Actions and Impact
Peer-to-Peer Lending: This involves facilitating microloans among rural entrepreneurs and low-income earners to invest in generating activities aimed at improving their livelihoods and having financial independence.
Low-Interest Loans: The platform makes credit quite affordable, especially for the underserved populations in society, with low-interest loans. This enables them to avoid high-interest debt and fosters sustainable financial practices.
Community Engagement: At the local community level, MicroGraam engages with the financial needs expressed and avails relevant and appropriate solutions. This is what ensures that the financial products and services offered are very relevant and effective.
Key Achievements
Impact: MicroGraam has successfully provided microloans to thousands of borrowers, supporting small businesses, education, and healthcare in rural areas.
Social Investment: It has also drawn a considerable number of social investors to its platform, thus showing interest in impact investing and financial inclusion.
8. ZestMoney
Founder: Lizzie Chapman, Priya Sharma, and Ashish Anantharaman
Founded: 2015
Location: Bangalore, India
ZestMoney is one of India's largest Fintech companies, offering consumers digital lending solutions for lifestyle purchases. The core interest of the company is empowering credit access to people who do not have any traditional credit history, hence advancing financial inclusion.
Actions and Impact
Buy Now, Pay Later: ZestMoney's "Buy Now, Pay Later" facility gives consumers a chance to buy products now and pay for them later in installments. This facility eases out the financing and helps the customer afford essential goods and services.
Credit for the Underserved: The platform makes use of AI and machine learning to assess one's creditworthiness based on his/her digital footprint and transaction history. Such an approach helps ZestMoney in offering credit to those people who are otherwise outside the ambit of traditional banking services.
Partnerships with Merchants: With a wide range of merchants on board, from e-commerce platforms to offline retailers, its reach multiplies, thereby making its services highly accessible to consumers.
Key Achievements
User Base: It currently hosts millions of users, having extended credit to hundreds of thousands of consumers to help them meet their financial needs.
Recognition: The company has been recognized for its innovative approach toward digital lending and its initiatives in promoting financial inclusion.
9. Aye Finance
Founder: Sanjay Sharma and Vikram Jetley
Founded: 2014
Location: Gurgaon, India
Aye Finance is an NBFC that provides credit solutions to micro and small enterprises in India. It has been set up with the approach of bringing about a change in the conventional practice of meeting the credit gap of small business units generally overlooked by traditional providers of finances.
Actions and Impact
Credit Solutions for MSEs: Aye Finance offers a bouquet of credit products that are tailored for micro and small enterprises. This encompasses working capital loans, term loans, and equipment financing.
Data-Driven Approach: The organization bases its mode of operation on a data-driven approach toward the assessment of borrower creditworthiness. Using data analytics and technology, Aye Finance is able to extend credit to businesses with no traditional credit histories.
Financial Literacy and Support: Aye Finance provides financial literacy programs and business support services to help borrowers manage their finances and grow their businesses. This holistic approach ensures that borrowers have the resources they need to succeed.
Key Achievements
Loan Disbursement: Aye Finance has sanctioned over INR 5,000 crores of loans to more than 200,000 micro and small enterprises, thereby making huge contributions toward financial inclusions and growth.
Awards and Recognition: The organization has won a number of awards, not only for its leadership in innovation in the area of financial inclusion but also for its huge contributions to the microfinance sector.
10. Capital Float
Founder: Gaurav Hinduja and Sashank Rishyasringa
Founded: 2013
Location: Bangalore, India
Capital Float is another one of India's biggest digital finance companies. It specializes in offering working capital finance targeting small and medium-sized business enterprises. By the use of technology and alternative data, the company enables credits to businesses that have been denied such access by the current financial institutions.
Actions and Impact
Digital Lending Solutions: Capital Float's digital lending encompasses term loans, working capital loans, and business loans. We offer a range of digitally advanced lending products that would suit the working capital, term loan, and business needs of an SME.
Quick and Easy Access to Credit: The process that is usually involved in the application for loans has been simplified, and approvals and disbursements have been hastened due to the manner in which the digital platform operates. Businesses stand to benefit from gaining access to the much-needed funds just in time to assure their growth and survival.
Data-Driven Decisions: The company uses data analytics for assessing the risk of potential borrowers and to make the lending decision, thus it is one of the only organized lender in the country offering credit to businesses without having a strong traditional credit history but showing vast potential in its alternative data.
Key Achievements
Loan Disbursement: Capital Float has disbursed over INR 8,000 crores in loans to more than 100,000 SMEs, thus making a prominent contribution to financial inclusion.
Innovative Products: The company consistently keeps up with innovations in its product and includes new innovations to meet the needs of SMEs, thus maintaining leadership in the digital lending space.
11. Faircent
Founder: Rajat Gandhi
Founded: 2013
Location: Gurgaon, India
Faircent is India's largest peer-to-peer lending platform acting as an intermediate platform between individual borrowers and lenders. Faircent seeks to make credit available to people who are either underserved or not served at all by financial institutions with the inculcation of technology through this portal and models of peer-to-peer lending.
Actions and Impact
Peer-to-Peer Lending: With a portal, Faircent has made it possible for borrowers to directly access credit from lenders at their respective individual levels, hence bypassing traditional financial institutions. In this way, it is where the borrowers can access credit at very competitive rates.
Credit Assessment: Advanced algorithms and data analytics help assess the creditworthiness of a borrower and hence protect the risk associated with the lenders on the marketplace, as only the creditworthy individuals pass through to availing loans.
Financial Inclusion: An alternative source of credit provided by Faircent leads to financial inclusion for people who would otherwise be excluded from eligibility for credit by traditional banks, thus lacking a source to fill up the credit gap and support economic growth.
Key Achievements
Loan Disbursement: Faircent has enabled INR 2,000 crores+ disbursal of loans for multiple borrowers and championed access to finance.
Regulatory Compliance: The platform operates under the guidelines of the Reserve Bank of India (RBI), ensuring transparency and compliance with regulatory standards.
Conclusion
These are a few exemplary organizations showing new ways of increasing accessibility to financial services and achieving UNSDG 9. Their efforts contribute not only to financial inclusions but also to economic growth, reduction of poverty, and the attainment of sustainable development. Startups can learn from these models and create their solution to support financial inclusions in their regions.
References
Bharat Inclusion Initiative: https://bharatinclusion.ciie.co
Kiva: https://www.kiva.org
Janalakshmi Financial Services: https://www.janabank.com
Lendingkart: https://www.lendingkart.com
Indifi Technologies: https://www.indifi.com
ZestMoney: https://www.zestmoney.in
MicroGraam: https://www.micrograam.com
FinBox: https://www.finbox.in
Capital Float: https://www.capitalfloat.com
Faircent: https://www.faircent.com
Aye Finance: https://www.ayefin.com
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