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The great Indian middle class is in Sachin Bansal's mind, not payments space

Bansal says that his new venture Navi will stay away from payments business, but he has plans to take his financial products to a billion Indians over the next few years

Rukmini Rao | July 24, 2020 | Updated 16:42 IST
The great Indian middle class is in Sachin Bansal's mind, not payments space

After moving out of Flipkart, Sachin Bansal along with Ankit Agarwal in 2018 co-founded Navi technologies to enter the banking, financial services and insurance space (BFSI) to bring the best of technology into the financial sector. In a conversation with Rajan Anandan, Sequoia Capital Indian's Managing director at the Global Fintech Festival 2020, he outlined why he is betting big on the financial services space.  With his new venture pivoted around tapping the large Indian-middle class and SME segment, ridden with problems of under penetration of credit and insurance, Bansal wants to take financial products to nearly a billion Indians. "We want to simplify financial services for a billion users and make it more accessible and affordable for them. Basically cost of operations is very high which gets passed on to the customers and hence they are underserved," said Bansal as Navi's mission statement.

While his lessons at Flipkart help him think big and make big bets, Bansal said that he will look at both means whether inorganic and organic to scale faster in the space. His new venture Navi has made two acquisitions to help him enter the BFSI space. In 2019, he invested over Rs 700 crore into an NBFC Chaitanya Rural Intermediation Developmental Services and has applied for a banking licence and earlier this year he bought erstwhile DHFL General Insurance  to enter into the general insurance space. "As of now we have our digital lending product in the market. It is still very early but we have seen promising traction," he said.

Chaitanya whose product portfolio includes two wheeler loans, and housing loans apart from microfinance operates in five states (Karnataka, Bihar, Maharashtra, Rajasthan and Jharkhand) with over 230 branches serving over 4.6 lakh customers, according to the company. "Within three months of the launch of the digital lending product we have become close to the largest digital lending app in the country," said Bansal. While in pre-COVID times India was witnessing a massive shift in low-income group moving north in economic barometer, the pandemic has certainly put a break to it and perhaps reversed it in few pockets. However, Bansal thinks the correction will happen over the next couple of years and believes that middle income group customers will eventually come to his company for fulfilment of financial services. "While the lending business is risky, we are confident of our credit underwriting and we understand and manage it very well," he further added.

Navi recently launched 'Navi Lending App' to provide instant personal loans digitally which is paperless and does not require uploading of any documents like pay slips or bank statements. The company disburses unsecured loans of up to Rs 5 lakh for tenure of up to 36 months to eligible customers. Navi has also applied for mutual funds licence and is awaiting approval. However one space that Bansal for now does not want to get into is payments business. "I'll stay away from payments because there are enough players in the space. We would rather partner with them," he said.

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