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NMI supports Svasti Microfinance through additional investments in pandemic times

Svasti Microfinance Private Limited, an RBI Licensed NBFC-MFI, has raised a total of INR 310 Million from its existing investors Mr. Adar Poonawalla, Nordic Microfinance Initiative (NMI) and Rajiv Dadlani Group.

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Svasti was co-founded by Arunkumar Padmanabhan and Narayanan Subramaniam in 2010 with the objective of bringing their extensive experience in banking, finance and technology development into the consumer finance sector to fulfil the right to finance, and transform the lives of women, especially those uncounted millions who do not have any collateral to support their bids for finance, thus bringing about a positive change in society.

Svasti today services around 1,87,500 customers across 63 branches spread over 4 states, aggregating a loan portfolio of around INR 4 Billion. Over the years, Svasti’s portfolio quality has been among the best in the industry. In fact, Svasti’s post-pandemic collection efficiency has reached 94% and it expects both collections and disbursements to reach pre-pandemic levels by the end of this financial year. In addition, Svasti has been certified as a Great Place to Work for the second year in a row.

In 2015, Svasti raised funds from billionaire Mr. Adar Poonawalla, who had subsequently invested in all follow-on rounds and again in the current round. In 2018, Svasti raised funds from Nordic Microfinance Initiative, who has made follow-on investments in 2019 and again in the current round. The Company has raised a total of INR 1.1 Billion capital to date. Existing investors also include Sajid Fazalbhoy, Kayenne Ventures (Singapore) and Arihant Patni Family. To boost its capital base and fund its growth plans, Svasti would be raising around INR 1.5 Billion of equity in FY 2021-22.

In order to amplify their efforts, Svasti has built a proprietary fintech platform for its business, SvasTech, using cutting edge technology embedded with artificial intelligence and machine learning. SvasTech helps Svasti to completely control and comprehensively manage its operational risks using fully automated processes. SvasTech brings in higher levels of operational efficiency that reduces redundancies and helps Svasti significantly reduce operating costs. SvasTech also helps Svasti to better understand each of its customers, who are from the informal micro-enterprise sector.

Commenting on the efficiency of SvasTech and escalating growth this transaction anticipates, Svasti’s Co-Founder Narayanan says, “SvasTech is more than a fintech, it is a powerful, dynamic, empowering business tool unmatched in the microfinance industry. We have productively used the last few months, when normal business was disrupted due to the pandemic, to make substantial improvements and upgrades to SvasTech. We’re very excited about the potential and the possibilities that SvasTech opens up for us as we scale up our business in the coming years. Furthermore, the constant trust of existing investors in Svasti will support the plan to double our branches and grow our portfolio to INR 8 Billion by March 2022.”

Svasti’s Co-Founder Arunkumar added, “We have built a great organization with over 800 employees who are all very excited to receive such strong support and validation from our existing investors during these difficult times. Our team is energized to pursue our vision to become a diversified financial services provider to the millions of low and middle income households across India. We have superior proprietary technology and analytics capabilities for our fintech platform, which we will further develop and leverage to build a top-quality consumer finance business that will be profitable and also have high social impact. This round of investment from our existing investors motivates everyone associated to achieve our mission of fulfilling every woman's Right to Finance and help transform the lives of their families as well.”

Arthur Sletteberg, Managing Director of NMI, commenting on the transaction says, “We are very happy with the manner in which Svasti has taken up and managed the challenges of the pandemic that has adversely impacted various businesses globally. We have a lot of faith in the Svasti team’s ability to navigate these challenges and to emerge as one of the leading companies in its sector in the coming years.”

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