Navadhan creating new wealth for rural-preneurs

In the heartlands of India, where innovation often meets necessity, Navadhan Capital is connecting small rural businesses with financial resources.

With a network of 18 lending partners across NBFCs, small finance banks and banks, the Mumbai-based fintech startup has enrolled over 250,000 customers and disbursed over Rs 120 crore. The startup’s revenue has gone up 20 times over the past two years. Encouraged by the market response, Navadhan has rolled out plans to expand its field operations from two states to 10 states in the next two years.

‘We are present in two states – Madhya Pradesh and Rajasthan. Our plan is to expand operations in eight more states, notably, Gujarat, Maharashtra, Karnataka, Andhra Pradesh, Telangana, Odisha, Chattisgarh and Bihar in the next two years. This will increase our services to over 700,000 small business owners,’ said Nitin Agrawal, the co-founder and CEO of Navadhan. ‘We have a robust network of 15 lenders, including Ugro, Vivriti, Northern Arc, Caspian, Unitus, and TruCap. We shall continue to do co-lending through these partnerships’ he added.

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‘We are a tech-led and revenue-first fintech. We are leveraging technology using alternative-credit, predictive analytics backed by data sciences. With both technology and people on-ground, we are making it work for the NBFCs and banks to generate priority sector assets. As the smartphone and UPI penetration improves, we have an early mover advantage in the rural markets,’ he added.

There are numerous players – big and small – in the rural lending space, so what is Navadhan’s unique proposition? According to Agrawal, the success behind Navadhan lies in its effort to simplify processes. The startup’s digital onboarding experience on its platform AceN Tech platform is designed to cut through bureaucracy, making the customer journey seamless and hassle-free.

‘In a departure from traditional methods, we have crafted an in-house proprietary alternative underwriting model. This ingenious approach leverages digital footprints and cash flow surrogates to assess households, enabling financing for customers who have traditionally been left underserved due to a lack of conventional income proofs and documents,’ Agrawal said. In his opinion, the power of Navadhan’s tech suite lies not only in its API integrations with lenders but also in its seamless, paperless digital journey for informal sector small-business owners.

‘At Navadhan, we want to make tech work for rural-preneurs and create new wealth for them. This makes us a unique fintech with a growing market and support from lenders due to RBI’s priority sector push,’ Agrawal said.

Additionally, the startup addresses the dual challenges posed by the predominantly cash-based economy and the limited banking history in rural markets. ‘By doing so, Navadhan takes a significant stride towards levelling the playing field for microenterprises and small businesses – the ‘missing middle’ – which often find themselves caught between the established MSMEs and microfinance institutions,’ he added.

Navadhan secured $1.5 million in its Seed round, led by fintech-focused fund Varanium NexGen. The round was co-led by existing investor Anicut Capital, with Gemba Capital also joining the ranks. This injection of capital is earmarked for expanding and enhancing the technological platform. Having previously garnered pre-Seed funding from Anicut Capital, BOPA, Flowstate, and other angel investors, Navashan has woven a cumulative funding tapestry of $16 million, combining equity and debt lines in partnership with NBFCs.

Looking at the future, Navadhan is gearing up to introduce new solutions and offerings, including credit limits and technology tools to digitise unorganised value chains. In a promising move towards environmental and social responsibility, the startup is also championing Climate Smart Agri practices among its rural clientele.

As smartphone and internet penetration are projected to surge by 44% by 2030, with a significant emphasis on rural areas and UPI transactions poised to breach the $4 trillion mark, the fertile ground for growth lies within rural markets, feels Agrawal. ‘Navadhan is ready to ride this wave, harnessing the momentum of mobile usage, data connectivity, and UPI transactions,’ he added.