India: Svasti Microfinance Raises INR 310 Mn from Existing Investors
India, March, 12 2021 -
Reserve Bank of India-licensed microfinance institution (MFI) Svasti Microfinance Private Limited announced to have raised a total of INR 310 million from its existing investors Adar Poonawalla, Nordic Microfinance Initiative (NMI), and Rajiv Dadlani Group.
Existing investors also include Sajid Fazalbhoy, Kayenne Ventures (Singapore), and Arihant Patni Family.
In order to amplify their efforts, Svasti has built a proprietary fintech platform for its business, SvasTech, using cutting-edge technology embedded with artificial intelligence and machine learning. SvasTech helps Svasti to completely control and comprehensively manage its operational risks using fully automated processes. SvasTech brings in higher levels of operational efficiency, which reduces redundancies, and helps Svasti significantly reduce operating costs. SvasTech also helps Svasti to better understand each of its customers, who are from the informal micro-enterprise sector.
“SvasTech is more than a fintech, it is a powerful, dynamic, empowering business tool unmatched in the microfinance industry. We have productively used the last few months, when normal business was disrupted due to the pandemic, to make substantial improvements and upgrades to SvasTech. We’re very excited about the potential and the possibilities that SvasTech opens up for us as we scale up our business in the coming years. Furthermore, the constant trust of existing investors in Svasti will support the plan to double our branches and grow our portfolio to INR 8 billion by March 2022,” said Narayanan Subramaniam, co-founder, Svasti.
The platform was co-founded by Arunkumar Padmanabhan and Narayanan Subramaniam in 2010 with the objective of bringing their extensive experience in banking, finance, and technology development into the consumer finance sector to fulfill the right to finance, and transform the lives of women, especially those uncounted millions who do not have any collateral to support their bids for finance, thus bringing about a positive change in society, the company shared.
“We have built a great organization with over 800 employees who are all very excited to receive such strong support and validation from our existing investors during these difficult times. Our team is energized to pursue our vision to become a diversified financial services provider to the millions of low and middle-income households across India. We have superior proprietary technology and analytics capabilities for our fintech platform, which we will further develop and leverage to build a top-quality consumer finance business that will be profitable and also have a high social impact. This round of investment from our existing investors motivates everyone associated to achieve our mission of fulfilling every woman's right to finance and help transform the lives of their families as well,” Arunkumar Padmanabhan, co-founder, Svasti.
The company claims to serve around 1,87,500 customers across 63 branches spread over 4 states, aggregating a loan portfolio of around INR 4 billion. Over the years, Svasti’s portfolio quality has been among the best in the industry. Its post-pandemic collection efficiency has reached 94 per cent and it expects both collections and disbursements to reach pre-pandemic levels by the end of this financial year.
“We are very happy with the manner in which Svasti has taken up and managed the challenges of the pandemic that has adversely impacted various businesses globally. We have a lot of faith in the Svasti team’s ability to navigate these challenges and to emerge as one of the leading companies in its sector in the coming years,” stated Arthur Sletteberg, managing director, NMI.
The company has raised a total of INR 1.3 billion capital to date.
To boost its capital base and fund its growth plans, the platform would be raising around INR1.5 billion of equity in FY 2021-22.