Startup Circle: How Finhaat caters to the needs of the financially under-served population

Finhaat is a financial product delivery platform created for the emerging middle-class and lower-income segments, primarily based in the rural, tier 3 & 4 cities of India. The Start-up aims to leverage technology along with a nuanced understanding of its target segment to offer suitable, affordable financial products that are serviced through the product life-cycle (from onboarding to accessing benefits).

Finhaat has created an assisted digital delivery platform that connects existing large financial product providers to end customers. The platform offers curated products and a simplified end-to-end digital process of onboarding and claim issuance. Partnerships with various institutions, including MFIs, NBFCs, non-profits, and other grassroots-level organizations allow for a seamless last-mile delivery as well support in after sales process through the digital Finhaat platform.

Navneet Shrivastava is the Co-Founder and Group Chief Business Officer of Finhaat. He along with Sandeep Katiyar and Vinod Singh, founded Finhaat as a financial product delivery platform targeting the emerging middle-class and lower-income segments in India, with a particular focus on rural and tier 3 & 4 cities. Navneet’s key responsibilities in the company include conducting business development, overall corporate development, maintaining relationships with stakeholders, and exploring new avenues to reach out to the target segment.

Speaking to CIOL, Navneet Shrivastava, Co-Founder, and Group Chief Business Officer, Finhaat has shared his views on how is Finhaat accomplishing rural distribution and innovations through its unique model for distribution.

Tell us about Finhaat and your offerings, also tell us about the team

Finhaat is a financial product delivery platform created for the emerging middle-class and lower-income segments, primarily based in the rural, tier 3 & 4 cities of India. With its unique assisted digital model, Finhaat seeks to bring together the product partner (financial product provider), the distribution channel (partner institutions with the reach) to the target population that is underserved and offer much needed financial services.

The Start-up has set off this process by offering insurance products first; through its Insurance Broking Platform – Finhaat Insurance Broking Pvt Ltd.  The products being offered across Health, Life, and Motor categories are structured to ensure that they are suitable, affordable and cater to the specific requirements of the segments.

The assisted digital model also allows the start-up to service the offerings through the product life-cycle (from onboarding to accessing benefits) by leveraging technology and the presence of partner institutions on the ground. (The start-up has reached almost 60 percent of all Pin-codes all over India with approx. 60 percent of its customers are women)

Finhaat is founded by three alumni from IRMA (Institute of Rural Management) with an experience of more than 50 years of them in the fields of Insurance, wealth management, banking, and rural marketing. They are further supported by a strong founding team with a deep understanding of Technology, Insurance, Banking, Governance, and Marketing.

Founding Team:

Vinod Singh, Group CEO set up up and lead the Wealth lending solutions at Avendus. He has worked across verticals in the banking sector right from corporate banking, Rural & Agri, Private banking, Wealth management and Treasury while working with leading banks like ICICI Bank, HSBC and Standard Chartered.

Sandeep Katiyar, Group CFO in his last assignment was a key member of Arya.ag, a leading Agritech company, heading the finance and risk function. He has been recognised by Business World as one of the top 40 under-40 CFO and featured in the ET CFO Club.

Navneet, Group CBOhas an extensive experience working in the Insurance Sector working with companies across the spectrum - Life Insurance with Birla Sunlife, Non-Life with Future Generali, and my last assignment with Aditya Birla Insurance working with Health Insurance.

Please run us through your journey with Finhaat and when you started it.

It is a dream that we have lived for over 10 years, and thanks to my two co-founders who shared the same vision, we are finally making it a reality. The journey of Finhaat started with the belief that all individuals should be equipped to manage their financial health with ease and confidence. This is possible only when they have easy access to solutions that are in line with their financial goals.

All three of us were working with the Financial Services Sector with a background of our post-graduation from IRMA. We wanted to look at a solution that could be scaled and sustainable while at the same time running an efficient setup.

Working with multiple partner organisations and our individual financial partners, we aim to build a robust and fair distribution network. We believe that technology will hold the key to a wider reach and a large-scale distribution in this segment and so our team is building a cutting-edge technology platform to ensure that we not only deliver the right product to our customers but also deliver efficient post-sales services.

Share the details about Finhaat's recent tie-ups with key institutions all across India.

We are partnering with institutions that

1. Existing institutions that are engaging with our target segment and have a large reach like Co-operatives, Micro Finance Institutions, Banking Correspondents, FPOs, NGOs and other association of people working in target market.
2. New to insurance and savings entities like NGOs, FPOs etc that have a reach and connect with our target segment

We are already working in states like UP, Bihar, Maharashtra, Jharkhand, Tripura, Assam, Punjab, Orrisa, Chattisgarh, Andhra Pradesh, and Karnataka by partnering with such institutions.

What is your market positioning and brand USP?

We are a unique financial services distribution platform for millions of ordinary Indian households and small businesses living beyond the main metro cities. It is a platform created for the emerging middle-class and lower-income segments, primarily based in the rural, tier 3 & 4 cities of India.

Our work is driven by three guiding principles:

SUVIDHA

Providing easy access to curated financial services

SURAKSHA

Offering Protection from Financial Shocks

SAMRIDDHI

Working as a trusted partner for financial prosperity

Rural distribution of financial products and specifically Insurance has 3 key challenges:

1. Products built for urban areas are generally pushed into rural with price point & benefit reduction
2. Lack of post-sales support
3. Lack of trusted one-stop solution for Rural population

Finhaat targets to solve all these three problems through:

1. Its curated product platform is built to cater to the very specific needs of the target segment
2. Digitise the sales and post-sales support to ensure that we are able to provide a paperless journey through the product life cycle
3. Distribution through ties up with institutions that have a presence in these areas and providing the right product and digital platform to ensure that we are able to provide assistance at each level of the product journey

Tell us about your target customers and what customer represents the majority of your customer base.

Finhaat works in a defined geography, building its platform to deliver services for the population present in rural and semi-urban areas. Our product and distribution strategy is mainly built on the core philosophy of assisted digital with the following thought process:

• Households with INR 1-3lacs p.a. of Income: This category consists of more than 15crs of households in India, presenting with a big base but limited capacity to pay. What they need are products that are affordable, well-directed to their needs and that complement the present government schemes to ensure maximum benefit can be delivered to them. Finhaat will mainly focus on this segment through existing Institutions by getting the right innovative product and fully digital service journey for this population. One of the key areas of focus for us for this segment will be ensuring that the support is available post-product sales mainly during claims and that’s where we have built an end-to-end digital journey around claims for all the curated products we bring for this segment.
• Household with INR 3-5Lacs p.a. of Income: This is emerging India and placed at a unique economic juncture. This is the place where asset ownership starts increasing and the need for simple Insurance products like 2-wheeler Insurance, Shop Insurance, etc. starts. Again, this segment has a limited capacity to pay and hence there is a need for specifically targeted products with strong post-sales service mechanisms. In this case, we will continue to leverage our rural institution partnership to mainly focus on bringing curated products as explained above and cross-sell simple retail Insurance products like 2-wheeler Insurance, etc.
• Household with >5-20Lacs p.a. of Income: This segment needs more engagement for risk mitigation strategy and hence a distribution network that can engage on a wider range of products and services. Apart from partnering with specific Institutions that have engaged in this segment, we will also be building our own Individual financial partners (IFPs) to target this segment and deliver the right products on a complete digital distribution model.

What has 2022 changed for you? How are things now?

2022 was the year of setting up systems and processes and creating a digital architecture that will help us scale. We have seen our concepts being executed on the ground, and scaling up our relationships with various institutions. We can say that we have been able to achieve what we set out for at the beginning of last year.  Now the challenges are reaching out to new territories, and newer partners and creating a robust, seamless onboarding and claims service experience so that we can truly create a path-breaking platform for Emerging India.

What are your growth priorities for 2023?

Presently Finhaat caters to more than 40 Institutions covering more than 15 lacs lives across 60pct of the pin codes of India through our products in FY23.

In FY24, Finhaat's key focus area for growth will mainly be three-fold

• firstly, Focus on increasing the Curated product suite through the right product building,
• secondly, increase penetration through multiple partner tie-ups and enable our partners to offer the right product and experience to their clients and
• thirdly, reach out to more than 65lacs lives in FY24.