Vitto by Microfinance.AI: The New Age Bridge Between Lenders and Borrowers

Akash Kushwaha Akash Kushwaha
Dec 6, 2022 11 min read
Vitto by Microfinance.AI: The New Age Bridge Between Lenders and Borrowers

Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by Vitto.

Vitto by Microfinance.AI is an AI-powered mobile platform featuring simple-to-use customer onboarding and screening processes. It provides product management tools in a secure and safe environment. The platform addresses language gaps with the help of a voice-assisted user interface and uses speech-to-text technology for app inputs.

Vitto with its a mobile-first solution, where micro-lenders can entirely rely on them to bring their low-literate and local-language-preferring users onto the digital platform and offer bundled financial services in a fraction of the time.

Vitto offers micro-lenders a dedicated web dashboard to manage borrower relationships, a proprietary credit scoring model based on relevant alternate data sourced by the platform for enhanced underwriting, and an early warning on credit performance. It acts as an end-to-end loan operation management for any micro-credit lender. In addition, the platform enables a simple integration of value-added products such as digital micro-insurance to increase revenue streams. Microfinance.AI-Vitto mobile platform can be linked with any back-end software and can be operated as a full-service loan management platform.

Vitto - Company Highlights

Startup Name Microfinance.AI-Vitto
Headquarters New Delhi, India
Sector Micro-Finance
Type Private
Founder Swati Sinha and Kapil Patil
Founded 2019
Website vitto.money
Legal Name Uthaan Technologies Pvt Ltd

Vitto: Vision and Mission
Vitto: Market and Industry Details
Vitto: Idea and Starting up
Vitto: Product and Services
Vitto: USP
Vitto: Founders and Team
Vitto: Logo and Tagline
Vitto: Business model and Revenue model
Vitto: Launch
Vitto: Challenges and Achievements
Vitto: Funding
Vitto: Products/Services
Vitto: Awards and Recognition

Vitto: Vision and Mission

Microfinance.AI-Vitto's solution is targeted with a vision to reduce poverty in the long run. In a developing country like India, millions of people are denied access to basic financial services like credit, insurance, and savings. Because of the lack of these, people are forced to live an excluded life and find it difficult to come out of the poverty trap. Microfinance.AI-Vitto has helped its customers to come out of poverty, start their own businesses and generate a source of income for their families.

Microfinance.AI-Vitto is bridging the gap between lenders and borrowers of micro-credit. Micro-credit borrowers who are availing credit from micro-credit lenders, credit co-ops, and group lenders cannot transact digitally because they possess a low level of literacy, are less tech-savvy, and are more concerned about safety. Traditional FinTech platforms are not built for them.

Vitto: Market and Industry Details

Developing countries have substantial credit gaps among their low and middle-income groups. In India alone, the credit gap in Micro, Small and Medium enterprises is as high as $300 billion. India's micro-credit market has currently reached more than 150 million borrowers through micro-finance institutions, women’s self-help groups, and credit co-ops with a market size of $50 billion.

India aims to become a US$ 5 trillion economy by 2025 and the microfinance industry will play a significant role in uplifting the lives of millions of low-income households and enabling them to contribute to the country's economic growth.

The microfinance industry registered a 5% Y-o-Y growth during the year 2021-2022 and is expected to grow by more than 40% by 2025, predominantly on account of the increasing demand from the MSME sector. A huge market size, low penetration rates, and high growth rate make this industry an attractive investment area.

The future growth of this industry is assumed to be aided and propelled by the rapidly increasing smartphone penetration (6% growth forecasted in rural smartphone users by 2026) and the growing popularity of the digital world.

With the rise of the millennials and the mobile-first generation, traditional financial institutions need to take into consideration the constantly changing demographics and behavior of users. Since Covid, the gig economy has been witnessing an accelerated growth. Given the rise in the number of gig workers, there has been a dynamic shift in consumer demographics and behavior. The unstable nature of gig jobs will eventually render traditional credit scoring models inadequate. Deeper longitudinal data on worker lifestyle and behavior will be required to develop alternative credit scoring models.

Hyper-personalization of financial services has been the current talk of the Banking sector. Data analytics is required to deliver such personalized services to users. This personalization will not just be about the next best offer but will also anticipate consumer needs and provide them with the relevant nudge. The industry will focus on harnessing digitization and building high-tech models to serve consumer needs.

Vitto: Idea and Starting up

Founders have worked in the finance domain for more than 7 years with the most under-served sections of society. In those years They saw the challenges faced by the people in order to access basic financial services like opening a savings account, taking a small loan, or having their insurance money claimed.

Personally working in a finance company. They were managing more than 50k clients who belonged to very poor and marginalized categories. For a small company, it is very difficult to address the operational gaps as most of the work is manual and the software which is being used is very old and inefficient. This was Vitto's founder's inspiration to work in the direction of solving the real challenge of inaccessibility.

We have interacted with most of the providers of credit in the industry, and their leadership teams and wanted to understand the major pain points faced by them and their customers. After discussing with them our idea of the proposed intervention got more clarity as we understood that technology was not their core area of expertise and with their limited resources it is not possible for them to explore various options. They ultimately end up using poor services so what we are building can be a major disrupter.- Swati Sinha (Founder & Director,Vitto)

Vitto: Product and Services

Developing countries have substantial credit gaps among their low and middle-income groups. In India alone, the credit gap in Micro, Small and Medium enterprises is as high as $400 billion. India's micro-credit market has currently reached more than 150 million borrowers through micro-finance institutions, women’s self-help groups, and credit co-ops with a market size of $50 billion. However, this segment continues to face a huge credit crunch and most micro borrowers end up taking credit from informal segments. Sometimes, they even fall into a debt trap.

Another problem in this industry is that most of its services are still delivered through a physical network of agents. This high-touch model leads to:

A. Higher cost of services

B. Lack of systemic data to avail higher ticket loans

C. Inability to deliver added financial services such as insurance and saving.

Vitto is bridging the gap between lenders and borrowers of microcredit. Microcredit borrowers who are availing credit from micro-credit lenders, credit co-ops, and group lenders cannot transact digitally because they possess low levels of literacy, are less tech-savvy, and are more concerned about safety. Conventional FinTech platforms are not built for them.

The platform “Vitto” simplifies the entire microfinancing experience for its users. Vitto's AI-powered mobile platform simplifies customer onboarding and screening. For lenders, Vitto's web dashboard provides complete information on the profile of the borrowers, their credit scores, and a warning of a possible default on their loans.

Vitto: USP

Microfinance.AI-Vitto platform is a customer-centric platform that prioritizes customer experience. Vitto has built its platform to support multiple languages to address the language barriers faced by low-literate customers. They have also added an AI-powered speech-to-text in the local language so that borrowers need not type while using the platform.

Through Vitto's app, They provide access to credit to new-to-credit customers and thin-file customers. Vitto provides customers who have no access to banks or formal institutions a platform to meet their financial requirements. They have also educational videos to improve the financial literacy of their customers.

Vitto aims to establish a synergy with microfinance institutions, which specifically want to reach out to the underserved and unserved, using technology.

Vitto is ideating to create an Alternate Credit Scoring Model which has not been done by anyone yet. The credit scoring will be like a normal CIBIL score but as the customers of MFIs don't have online footprints or are not regular customers of formal financial institutions, the alternate score will be highly innovative.

Traditional technology providers present in the market charge a heavy subscription fee and a high annual maintenance cost as well. But Vitto is targeting to reach them with a “Pay as You Grow” model in which there is a relatively less burden.

Vitto: Founders and Team

Kapil Patil and Swati Sinha met each other during their first assignment after college. They both joined a world bank project in Orissa. The project was related to financial inclusion and livelihood management. They worked for more than a year and came to know each other closely.

Founders: Vitto-Microfinance.AI
Founders: Microfinance.AI-Vitto

They both developed an inclination toward solving this unmet demand for finance for the poor and deprived sections of society. Both of them belong to small towns and are from medium-income bracket family.

Both founders have been working passionately and tirelessly for their mission. Kapil Patil looks after the business and product development while Swati Sinha is focused on gaining capital for business expansion and hiring.

Vitto-Microfinance.AI- Team
Microfinance.AI-Vitto- Team

The current company size is 15 full-time people and the main hiring funda is to hire a good talent who is not only looking for a high-paying role but also has some passion to innovate.

Vitto: Logo and Tagline

Logo: Vitto-Microfinance.AI
Logo: Microfinance.AI-Vitto

Founders always have in mind how we can create a product exclusively for the people who belong to the underserved section and are often missed out. So we went with ‘Vitto’ as the brand name because it depicts Vitt meaning finances and we also want to solve the problem of inaccessibility of finance.

Vitto: Business model and Revenue model

Microfinance.AI-Vitto operates in a B2B model where they have partnered with micro-lenders who will use Vitto's digital platform to onboard and manage their borrowers. In addition, Vitto's mobile platform – “Vitto” (available on Google Playstore) directly sources digitally connected customers on behalf of their micro-lending partners. The company charges an initial setup fee while partnering up with institutions. Apart from this, continuous revenue stems from the commission charged on loan applications and processing repayments through the Vitto platform.

Microfinance.AI-Vitto immediate revenue sources:
Signup cost with corporate partners
Co-Lending: Interest income in the range of 12% - 14%
Loan Sourcing Fee: Loan sourcing fee at 1% - 2.5% (one time)
Repayment: Repayment fee at 1% - 1.5% on a collection
Long-term additional revenue (3rd year onwards):
Micro interest commission - 5% - 18%
Investment product commission at 0.5% - 4%

Vitto: Launch

They tested the idea within their network and got a very good response. This motivated founders to develop an MVP and then again go to the same people to check their responses. The Vitto team used their own experiences while designing the product and it helped them to gain their first 100 users.

Microfinance.AI-Vitto started to engage with other stakeholders about partnership. The idea is to take their amazing product into the market and have other similar users who can benefit from it.

It took us very little time to convince our first few partners as what we have built is super amazing and exactly meets the requirements of our end users. We have built a strong product and are continually iterating it to become more useful for the actual users.

- Swati Sinha (Founder & Director)

They have started to promote the same on their social media channels and they have also got support from industry veterans/leaders.

Vitto: Challenges and Achievements

They are creating a disruption around their idea. Microfinance.AI-Vitto's founders and their team have built something very different which is currently not available in the market. The major challenge is to convince the first set of people who are not tech-savvy and are happy with their present system of delivery.

Microfinance.AI-Vitto: Achievements
Partnered with 6+ micro-lenders
Received awards from LSE, CIIE, RBIT
Launched first pilot in early 2021 and commercial pilot in mid-2021
Went live with 6+ micro-lenders to date
Customer served to date - 40,000
Revenue in the last 12 months - US$ 8,000+
Cumulative revenue to date - US$ 20,000+

Vitto: Funding

On  18th March 2021, Microfinance.AI-Vitto received non-equity assistance from MassChallenge Israel. On 2nd December 2021, the company raised $300K in its pre-seed round. Let’s Venture, We Founder Circle, Faad Network, Ankit Prasad (Bobble Al Founder & CEO), and Saurabh Aggarwal (Fitso Co-Founder & CEO) are some of the company’s key investors.

We are in indirect competition with technology providers like Force Ten, Jayam, and Craft Silicon who have been in this sector for more than a decade and currently capture a major share of the market. These companies are focussing on digitizing operations, audits, and HR for the institutions and have built a very good LMS (Loan Management System) and CRM (Customer Relationship Management). They are working from the perspective of increasing efficiency for the MFIs and trying to reduce their operation cost while maximizing profits.- Swati Sinha (Founder & Director,Vitto)

FinTechs are also indirectly related to Vitto as they are lending using their own technology-led platforms. They are using deep tech in solving the problems in meeting the credit requirements of the underserved sector. They are also building good algorithms to mitigate the risk associated with lending to people who don't have a credit history.

A few deep tech companies like Navana Tech and Jiny are building customer-centric products and trying to digitize the end users by making the applications user-friendly and assistive. Hyperverge is also researching and innovating on the technology interface and working on fraud prevention techniques.

All these companies are indirect competitors to Microfinance.AI-Vitto, but they do not completely address all the problems in the market. Whereas, on the other hand, We are a purely customer-centric product development company working with a vision to revolutionize the microfinance space. We are working with a vision to bring billions of micro borrowers into a digital platform and provide them with a number of financial products and services through that platform.- Swati Sinha (Founder & Director, Vitto)

Vitto: Products & Services

Vitto's platform features
Vitto's platform features

Microfinance.AI’s platform “Vitto” simplifies the entire microfinancing experience for its users. They offer an end-to-end loan management system.

Vitto for Borrowers:

Available in Multiple Local Languages: The app supports multiple local languages and this removes all the language barriers faced by users. The availability of video assistance makes it even more simple for people to use.

Time-Saving: Borrowers can avoid the hassle of standing in long queues and frequently visiting the banks for getting their loans approved. There is zero typing involved in the app and it takes only 2 minutes to complete the loan application form in the app.

Continuous Support: The Vitto App guides the borrower from the start to the end. One can complete their entire KYC in the app. The app shows the status of loans, notifies when payments are due, accepts online payments, and extends access to top-up loans. Customer support can also be reached out to when needed via the app.

Educational Content: There are also short videos related to financial products on the app to improve the understanding of borrowers. This can help them make better financial decisions in the future.

Vitto for Lenders:

Live Tracking: Lenders can get live access and actionable insights on their portfolio performance, JLG exposure, customer history, and delinquency reports.

Fraud Detection: Vitto's facial recognition technology detects fraud as early as possible, i.e., even before customer onboarding.

Vitto: Awards and Recognition

Initially, Vitto's founders got initial support from LSE and also a small capital to start the journey of entrepreneurship. They got selected by CIIE for their financial inclusion lab program last year and inclusive fintech 50 award last month which is a global recognition for the innovative fintech working for billions of people who are left out of the formal ecosystem.

Microfinance.AI-Vitto has received awards from the London School of Economics, CIIE, IIM Ahmedabad, RBIT, and Inclusive Fintech 50.

FAQs

What are the main products of Vitto- Microfinance.AI?

Vitto App and Vitto Pro.

What are the benefits of using Vitto- Microfinace.AI?

Vitto has Assistive & Vernacular AI, saving you time, and reducing your cost, an amazing dashboard that helps customers to have control better and also it educates you on finance and lending.

Who are the founders of Vitto- Microfinance.AI?

Kapil Patil and Swati Sinha are the founders of Vitto- Microfinance.AI.

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