Introduction
Vivek Bansal, the group CFO of fintech unicorn InCred, alongside Sunil Daga, the president of Kotak Mahindra Bank, are on the verge of launching a new startup named Saarthi Finance. This innovative venture is set to prioritize the financial needs of Micro, Small, and Medium Enterprises (MSMEs). Currently, both executives are in their notice periods at their respective companies and are actively seeking investors to fund their new initiative. Saarthi Finance, which was registered in August, is in the process of obtaining a non-banking financial company (NBFC) license from the Reserve Bank of India (RBI).
Funding and Valuation Plans
Saarthi Finance is currently in negotiations with private equity investors to raise approximately Rs 600 crore in equity, aiming for an estimated valuation of Rs 1,000 crore. Sources suggest that a portion of this capital might be contributed by Bansal and Daga themselves, indicating their strong belief in the venture’s potential for success.
Focus on MSME Financing
The primary objective of Saarthi Finance will be to provide secured loans ranging from Rs 5 lakh to Rs 20 lakh specifically designed for MSMEs. Additionally, the startup plans to offer unsecured loans ranging from Rs 1 lakh to Rs 5 lakh for salaried individuals. For secured lending options, Saarthi Finance will utilize its own in-house NBFC, while personal loans will be administered through partnerships with other financial institutions and fintech companies, adopting a co-lending model. This strategy aims to ensure a broad-based reach to meet diverse financing needs.
Digital-First Approach
Emphasizing a digital-first strategy, Saarthi Finance aims to cater to urban and semi-urban clientele through a comprehensive B2B2C super app. This approach will make financial services more accessible, addressing the credit gap that many MSMEs face in the current market.
Investor Sentiment Toward Fintech NBFCs
The launch of Saarthi Finance comes at a time when there is a marked increase in investor interest in fintech NBFCs. These companies are recognized for utilizing advanced technology to provide innovative financial services, particularly to under-served MSMEs. The fintech landscape has experienced steady growth given the rise of digital lending practices and a clearer regulatory framework surrounding NBFC operations, making this an opportune moment for new entrants like Saarthi Finance.
Conclusion
With the support of experienced leaders such as Vivek Bansal and Sunil Daga, Saarthi Finance is poised to make a significant impact in the financial services sector for MSMEs. As they work towards securing funding and establishing their operations, all eyes will be on how they navigate the competitive landscape to meet the evolving needs of their target market.
