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Case Study

Avanti | Reimagining Financial Inclusion through Choice, Context & Community


Financial inclusion is a necessary pathway to enable the sustainable growth of any country. It is about creating a more equitable economic system, that creates availability, and supports equal opportunities to access financial services. In India, this journey of taking banking and other financial services to the masses has been paved with challenges in spite of its stated intent of ameliorating poverty.  While 80 per cent of Indian adults have a bank account today – a great achievement indeed, according to the World Bank, over 48 per cent of these have had no transactions in the last one year. Another worrying statistic by the IMF bemoans that only 13 per cent of Indian adults have borrowed through formal channels, and hardly 35 per cent of Indian farmers have utilised institutional loans. Which means to say that the rest are dependent on non-institutional sources such as local moneylenders or acquaintances who levy exorbitant interest rates. 

The goal of financial inclusion – giving the financially excluded an opportunity to change their economic circumstances through better livelihood, can only be fulfilled if the financially excluded are part of the mainstream financial system and are empowered to save, borrow and receive benefits. It is critical that citizens are financially literate (and digitally literate to access online services), and have products that are tailored to their economic needs. However, ground realities are far from this – according to Standard & Poor’s ‘Global Financial Literacy Survey – 2014’, the average financial literacy rate in India is 24 per cent, resulting in poor financial health, especially in low-income segments.

The Indian government has invested substantially in building the foundation for financial inclusion through Aadhaar – a unique identity to each Indian citizen, Jan Dhan accounts (for direct transfer of social benefit payments) and a digital payment infrastructure called BHIM. However, these initiatives need to be leveraged by different actors to strengthen the agenda of financial inclusion. To address the aspirations of millions of the country, we need inclusive, diverse, local-level, on-ground solutions that impart financial counselling, entrepreneurial growth in rural & urban India, digital literacy and well-being.

“My work was going well, and I knew that I would be eligible for a loan. But every bank I visited asked me for many documents that I did not have.” – Netravathi from Tumakuru, Karnataka.

What is Avanti trying to solve?

Avanti Finance entered the microfinance sector with an unwavering intent on creating a sustainable model for interventions which have lasting impact on communities. Avanti’s approach is a trust-based model that relies on social reference – meaning, the model works on building ‘trust’ through on-ground partners and discussions with borrowers that are focused on livelihood generation. 

Avanti was aware that they needed an approach founded in restoring the agency of every loan taker, of addressing the diversity of the challenge – no one solution fits all and one that caters to the scale of the problem – not excluding anyone who needs a loan. 

Avanti found resonance in the Societal Platform approach and its core value, and adopted the approach which is encapsulated in their mission, Provide access to credit & affordable financial services in a timely manner to drive sustainable livelihoods & community-owned local capacity to service 100 million households in India.

Key elements of Avanti’s approach that enabled designing a Societal Platform

Avanti’s approach is resolutely centred around the borrower. Understanding the needs of the borrower, their repayment patterns, and structuring products that suit their livelihood are key aspects of their approach. This helps them Resolve for Diversity, one of the core values of Societal Platform Thinking, while they address the borrowers’ requirements attached to the loan.

Avanti’s goal is to improve access to credit with least friction and documentation, and empower the borrower to own their credit. They offer affordable, minimum paper incentive loans with zero processing fees or late fees, and a flexible repayment schedule aligned with people’s livelihood flow.

Avanti does this by leveraging the high repayment rate of microfinance, thereby, investing their efforts on making the actual usage of credit by the borrowers meaningful. In areas that Avanti is operating in, loans are taken to open small grocery stores, buy an automobile such as e-rickshaw, expand their dairy business – leading to income upliftment, sustainable livelihoods and impact, and they have proven to be reliable borrowers

The process

Avanti platform is one of the most affordable and least paper intensive borrowing platforms in the country and that makes it highly accessible to the borrowers. This process starts with borrowers’ group needs being assessed by the partner after which a product is designed to suit the income cycle and needs of the borrowers in partner geography. After this, the borrower is introduced to the Avanti platform and its offerings in the second step.

Once the borrower has concurred with the process and its details, the third step is to get them on-boarded on the Avanti platform with her basic details and documents. Following which a loan application of the borrower is filled by the partner agent on the Avanti platform. Then the borrower reads the terms and conditions and signs the loan in the fourth step. Once through this, the borrower receives a message with all their loan details. 

This process makes the role of a partner extremely pivotal and Avanti realizes how they need adept people for this role to reach the community and bridge them with the needs of the borrowers effectively. They conduct an extensive partner assessment based on the partners’ purpose, size, scale, reach and governance. Ability of the partner to create impact at a community level is another criteria that is applied while selecting potential partners. The partners that qualify are then onboarded on the Avanti with some basic data fields and documents to be uploaded on the platform. 

These partners are usually embedded in the community, have deep expertise and engagement with the community and have a nuanced understanding of the socio economic conditions as well as needs of the value chains. The partners become the connection between Avanti by conducting need assessments for the borrower, helping them come on the platform and applying and availing for the loan while helping Avanti provide a customized solution to their borrowers.This increases the capacity of the resources entrenched in the community to ensure sustainability in their interventions.

Partner agents are also involved in financial literacy (material and information provided by Avanti) of the borrower which enables them to repay the loan. Avanti ensures that the interface is responsive to the local needs of the communities. It is translated in multiple languages and the products can be customised based on the local needs for the community. 

“This is the first time I have borrowed from Avanti. I have expanded my shop and am earning profits. I am learning new skills through the process of repayment. I want to use this in my personal life and want to keep growing in the future.” – Sarajoni Devi from Bihar.

The importance of crowdsourcing for Avanti Finance 

Avanti is cognizant that it does not know everything. It is well understood at Avanti that local insights and knowledge are crucial to scale a customised solution and hence they crowdsource borrower evaluation processes, loan application, borrower sourcing and also repayment process from its partners and other platforms. It does this by onboarding multiple partners to rate and evaluate the users on its platform while also integrating itself with as many widely used payment platforms as possible. Not only does it widen their network and capabilities, it also can be used by any financial organization that aims to increase at scale – using Avanti interface to onboard, evaluate and monitor its loans which can be further used to reach a larger base.

This openness on the Avanti platform, that allows multiple partners to harness the available network and capabilities facilitates them to Resolve for Scale. Avanti platform is open access and designed for thousands of financial organisations to take advantage of to deliver on the same mission. It can be used as a service to any financial organisation that aims to increase its scale and reach by using the Avanti interface to onboard, evaluate and monitor its loans. Hence, it can be used by any financial organisation to reach a larger or specific borrower base. Hence, in turn helping Avanti bring Financial Inclusion and affordable financial goods and services to a larger demographic in the country.

Avanti is co-owned by the community 

Their Partner led operating model ensures the community comes together to support the credit process.  Second, the data on Avanti is used to help the borrowers gain ‘digital identity’ and thereby increase financial inclusion. Avanti ensures complete transparency and interaction on its platform and does not own data but is just a custodian of information. The knowledge gained by Avanti on its platform can be accessed by the community; only open source data is shared with partners and all personal details of the borrowers are protected. 

To Restore Agency and make the platform and its services extremely inclusive, the products are developed by Avanti with the community through the partner model to ensure delivery of a customized solution for all those coming on board. Hence, Avanti co owns the platform and its data with the community.

Looking forward

Avanti is at the beginning of a new generation of financial inclusion. The current COVID-19 crisis makes Avanti’s mission critical as it plays a part in building and restoring livelihoods. Digital delivery models are getting strong tailwinds, and traditional high-touch models will have to recalibrate.

Avanti does not compare (or compete) with NBFC-MFIs, rather they are looking to collaborate with them as a key partner to pursue their mission. While they embark on their own digital journey, Avanti sees a large number of them partnering on their platform to serve their end customers. Avanti’s platform has the potential to create a large number of small- and medium-sized financial organisations to serve local ecosystems.