In the age of digital transformation, access to financial services remains a critical issue in India, particularly in rural areas and Tier III and IV cities. While significant progress has been made in expanding financial inclusion through digital means, there’s still much ground to cover. A recent report by PwC revealed that less than 10% of rural Indians have life insurance, highlighting the pressing need for innovative solutions. Enter Finhaat, a startup that aims to revolutionize the financial services landscape by creating a tech-enabled platform tailored to the emerging middle-class and lower-income segments in underserved regions.
Founded in October 2021 by three alumni of the Institute of Rural Management—Sandeep Katiyar, Vinod Singh, and Navneet Srivastava—Finhaat has set out to address the financial disparities that persist in rural India. The company’s assisted financial product delivery platform focuses on making insurance and other financial services more accessible to those who need them the most.
The Digital Revolution in Financial Inclusion
Over the past few years, India has witnessed a significant push to bridge the financial access gap, driven by digital penetration and various initiatives from both the public and private sectors. One notable metric of progress is the RBI’s Financial Inclusion Index, which surged from 43.4 in March 2017 to 56.4 in March 2022. This increase reflects improvements in access, usage, and the overall quality of financial services across the country.
However, the numbers tell only part of the story. Despite these advances, there remains a substantial portion of the population that lacks access to essential financial services. According to the PwC report, a mere 11.5% of rural households have net financial savings, and less than 10% have life insurance coverage. This underscores the persistent gap that Finhaat seeks to close.
Finhaat’s Vision for Financial Inclusion
Finhaat’s mission is clear: to ensure that financial services, particularly insurance, reach the underpenetrated and underserved areas of rural India. CEO Vinod Singh explains, “We feel that in the high-income segment, there are enough service providers. Whether you look at banks, boutique investment firms, or wealth management, there is a lot of focus, and this [rural] is a segment in which we can add much more value.”
The startup’s approach involves connecting major financial product companies with local agents and institutions, such as Microfinance Institutions (MFIs), Non-Banking Financial Companies (NBFCs), non-profits, and grassroots-level organizations. These local agents and organizations play a pivotal role in facilitating last-mile delivery of financial products and providing crucial after-sales support.
The Tech-Enabled Finhaat Platform
At the heart of Finhaat’s operations is its tech-enabled platform, which acts as the bridge between financial product providers and the end customers. With its headquarters in Mumbai and branch offices in Delhi and Bihar, the startup is strategically positioned to serve these diverse markets effectively.
The Finhaat platform streamlines the distribution process, making it more efficient and cost-effective. Local agents and institutions can access a wide range of financial products, including insurance policies, through the platform. This not only simplifies the buying process for customers but also ensures that they have access to products that are tailored to their unique needs and circumstances.
Empowering Local Agents and Institutions
One of the standout features of Finhaat’s approach is its emphasis on empowering local agents and institutions. These partners are vital to reaching remote and underserved communities, as they possess the local knowledge and trust needed to engage with customers effectively.
Finhaat’s platform equips these agents and organizations with the tools and resources they need to deliver financial products and services efficiently. This includes training, access to a diverse product portfolio, and the ability to provide after-sales support, such as claims processing and customer assistance.
A Vision for a More Inclusive Financial Future
As Finhaat continues to expand its footprint and impact, it envisions a future where financial services are not a luxury but a fundamental right for all Indians, regardless of their location or income level. By leveraging technology and empowering local stakeholders, the startup is contributing to the realization of this vision.
In conclusion, Finhaat’s journey to make financial services easily accessible in rural India is a testament to the power of innovation and entrepreneurship in addressing complex societal challenges. With a clear mission, a tech-enabled platform, and a commitment to empowering local partners, Finhaat is making significant strides toward bridging the financial divide and creating a more inclusive financial landscape for all.