How Revfin is bringing Financial Inclusion In tier II and III Cities

Chayanika Goswami Chayanika Goswami
Feb 19, 2019 6 min read
How Revfin is bringing Financial Inclusion In tier II and III Cities

Revfin - Highlights

Startup Name Revfin
Headquarter NewDelhi
Founder Sameer Aggarwal
Sector Fintech
Founded 2018
Parent organization Revfin Services Pvt. Ltd.

Revfin - Introdcution

REVFIN is a financial technology (Fintech) start-up which is aimed at building the world’s most advanced digital lending platform. The platform will be used to underwrite and manage consumer loans to finance clean technologies through our own NBFC. Β 

Through the unique approach to underwriting, rich value proposition, and a differentiated distribution model, RevFin plan to build a lending book of Rs. 500Cr ($45Mn) in the next 5 years, with ROE of 20%+.

Their vision is to create a lending platform that is agnostic of language, literacy, geography, and culture. Once the platform has been proven successful, they will use it to rapidly scale the lending book in India while leveraging the platform in other geographies.

Currently they have financed E- Rickshaws in West Bengal (Kolkata), Bihar (Muzaffarpur), UP ( Jhansi, Saharanpur, Bareilly, Lucknow, Sultanpur, Ghaziabad, Noida), Uttarakhand (Dehradun), Punjab (Ludhiana, Amritsar, Jalandhar), Rajasthan (Dausa), Haryana (Hisar) and Delhi.

It now plans to expand into Maharashtra, Gujarat and more towns in UP. Β It has partnered with six manufacturers of electric vehicles, who have dealership presence in over 10 cities/towns in India. The collections rate is over 100% and has pipeline for loan demand of over Rs. 10 crores a month.

Consumer Lending - Industry Details

Consumer lending market in India is over $300 billion. Β Currently, over 3 lakh electric three wheelers are sold in India and over 1 lakh electric two wheelers. Taking average financing of Rs. 1 lakh for electric 3-wheelers and Rs. 50,000 for electric 2-wheelers, the market in which revfin is operating stands at INR 5,000 crores. This market has very poor availability of financing and in our opinion; the market can grow 10-15X in the next 10 years.

Revfin - Founder

Revfin is founded by Mr. Sameer Aggarwal. Sameer is an alumnus of IIT Kharagpur and has worked in consumer lending for 13 years, most of which were spent working in London with HSBC.

Sameer has worked in both prime and subprime lending space. During time in HSBC, he has worked in UK, France, Turkey, Egypt, UAE, Hong Kong, Australia, Philippines, USA, Canada, Mexico and Brazil. He has wide ranging experience in organization strategy setting, fund raising, managing large cross functional/site teams and converting a traditional lending business to a platform based digital business.

Revfin - The Idea and starting up

Being a part of the fintech industry in the UK, Sameer had the opportunity to experiment many unique ideas. While researching the Indian market, he found three clear trends –

  • Consumer fintech companies were focusing on lead generation, but not on lending;
  • Lending fintechs were focusing on SMEs, not on consumers; and
  • There was very little use of technology, analytics and alternative data/techniques.

All of the above gave rise to the idea of Revfin. At the same time our core lending focus is on retail consumers.

As we started our operations, we got an early opportunity to test lending in electric three-wheeler market. This market does not have organised finance available at a national level. So we tied up with some manufacturers to test the scale and ease of the market. We realised that there is huge untapped potential in the market and the players in the market are working with us to develop the complete ecosystem for manufacturing, sales and financing of such vehicles.

Friends and family were not very pleased initially for me to give up a job in London. However, once the decision was made, all of them have come out help me build the company. Several people, which included investors and other start-up founders, encouraged me and provided a lot of insight and advice.

When I came up with the idea, I was clear that our company will completely revolutionise the way lending in done. Therefore, the first name that sprang to my mind was Revolution in Finance. Later, we chopped it to RevFin.
Revfin Logo

When we started designing it, we wanted to use the rupee symbol and modify it to make it unique. Finally, after trying several versions, the logo has been create in such a way that it represents the rupee (for loans) but also β€˜R’ in both Hindi and English. Since it’s an β€˜R’, it also represents Revfin.

We realised how difficult it is for people to get a loan. Also loans are not very accessible for most people as they get declined by banks and other institutions. To be true to our objective of financial inclusion, our loans must me Convenient (to apply and process) and Accessible (high approval). Hence RevFin – Convenient, Accessible Loans!

Revfin - Product

Revfin provides 2 types of loan.

The first is a regular personal loan. This loan can be taken for a variety of purposes and is paid back in equal monthly installments.

The second, RevLoan, is an unsecured credit limit that you can use at any time per your need. In this, you can draw down any amount in denominations of Rs.1,000 up to your credit limit.

Revfin product

The platform is very focused on use of technology, analytics and alternative techniques like Psychometrics, Biometrics and Gamification. The platform is accessible through web, iOS and Android App.

Revfin - Business and Revenue Model

Our business model is very simple. Β A customer applies for a loan. The company charges a small fee and interest to every customer who is approved a loan. Β 

Three strong points which makes revfin unique are:

  • The digital lending platform uses alternative data and techniques to make lending decisions. This helps increase approval rates and provide loans to even those who do not get loans from traditional institutions.
  • Distribution of loans in a very under penetrated market
  • Unique features like Gamification that are designed to help customers be financially prudent and RevLoan which helps them in emergency situations.
When we first started, we wanted to enter several verticals in parallel. But we decided to focus on one big opportunity to start with and then expand in to other verticals/segments.

It uses third party data like credit bureaus, KYC checks for loan approval.

Revfin - Customer Acquisition

While we are still quite small, our distribution tie- ups with manufacturers is helping us expand quite quickly at a low cost and low risk.

Revfin - Funding

Revfin has raised a seed fund round in October 2018 from a group of angel investors. The investment was led by Harash Jain (CEO, Litejoy International and UK-based businessperson), Anil K Goyal (Founder, Anil K Goyal and Associates), Anil Lanba (Senior Technology Executive, EVP Pyramid Consulting) and Krishan B Singh (Investor based in New York).

The main thing is to show your commitment to your idea through your knowledge, deep belief and also by putting your money in to the mix.

Revfin - Challenges

The biggest challenge with our business is to get a modestly educated person in a Tier III town to apply for a loan on an App. The first time I went to a customer I thought we had got it all wrong and that this concept would never work. Soon, we changed our UX simple enough that anyone can understand the process. Also we now ask our distribution partners to help customers understand out process.

In Tier 3 towns, people find it hard to believe that they can apply for a loan on an app and then actually get the money in their account!

I had travelled to remote parts of the country to approve loans. This also gave confidence to both the customers and the distribution partners that we were a serious and a real player.

Revfin - Future Plans

We have tied up with several electric vehicle manufacturers. However, we are still not financing in all the geographies they have dealerships in. Therefore, the next step is to go in to newer geographies of our existing partners. We are also looking at financing electric two wheelers and variants of electric three wheelers.

Revfin - Advisors and Mentors

In setting up RevFin, Sameer is supported by many strategic advisors/investors, including Fintech executives, accountants and entrepreneurs based in USA, UK, Dubai and India.

Anil K Goyal – runs a full stack CA/financial advisory practice with Accounting, Tax, Audit, Wealth, FEMA, Company Secretary and Legal verticals.

Alok Verma – CA based in London, with expertise in private equity, M&As, SMEs

Harsh Jain – Serial entrepreneur with business in UK, Dubai and India in travel, aviation, electric cigarettes.

Krishan P Singh – New York based fintech/Investment banking expert

Anil Lanba – expert in IT services and recruitment, currently EVP at Pyramid Consulting

Revfin - Acquisitions and Merger

Revfin acquired an NBFC, Aristo Securities Private Limited in October 2018.

Revfin - Awards & Achievements

Revfin is a recognised as a startup by DIPP, Government of India.

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