Finhaat, a visionary initiative, with its technology-driven platform aims to simplify the accessibility of financial goods customized to the developing middle-class and lower-income groups, mainly in rural areas as well as Tier III and IV cities. By implementing digital solutions and effective strategies Finhaat focuses on reducing the financial access disparity involving both the government and private sectors. Notably, the Financial Inclusion Index of the Reserve Bank of India (RBI) has seen a significant rise over the last few years.
However, despite these strides, there remains substantial ground to cover, exemplified by the mere 11.5% of rural households having net financial savings as per the index. Additionally, a PwC report indicates that less than 10% of rural Indians possess life insurance. Here is where Finhaat steps in, introducing a revolutionary financial product delivery platform catering to the emergent middle-class and lower-income populace residing predominantly in rural areas, along with Tier III and IV cities.
Today The Inspiring Chapters is sharing the inspiring story of Finhaat.
Founding and Objectives of Finhaat
Established in October 2021 by Sandeep Katiyar, Vinod Singh, and Navneet Srivastava – alumni of the Institute of Rural Management – Finhaat’s platform is rooted in the objective of enhancing financial services accessibility, with a particular emphasis on insurance, to reach underserved regions. CEO Vinod Singh elaborates, “We believe that the affluent segment already has a multitude of service providers. Be it banks, exclusive investment firms, or wealth management entities, substantial attention is directed there. Conversely, the rural sector presents an avenue where we can contribute significantly more value.”
The core of this startup centers around establishing partnerships between leading financial product companies and local agents and institutions, including MFIs, NBFCs, non-profit organizations, and grassroots entities. This network collaboratively ensures the final-mile delivery to end-users, coupled with post-sales support via Finhaat’s platform. Finhaat, with its operational branches in Mumbai, Delhi, and Bihar is committed to serve the rural areas with its innovative approach.
The co-founders, with a collective experience of more than 50 years in banking, insurance, wealth management, and rural marketing, held a common vision to empower everyday Indian households and small businesses in non-metropolitan regions to actively take charge of their financial stability. The main goal was to come up with a plan that can grow, sustain for a long time, and work well.
Bridging the Gap
Sandeep Katiyar, one of the co-founders, explains that distributing financial products in rural areas, especially insurance, faces three significant challenges. Firstly, urban-centric products often infiltrate rural settings with altered price points and reduced benefits. Secondly, rural customers lack the necessary after-sales support for these products. Lastly, a deficiency of reliable comprehensive solutions prevails.
Finhaat with its platform addresses these challenges. It connects financial product providers with distribution networks and provides solutions to meet the specific needs of underserved communities through a guided digital approach.
Insurance products offered by Finhaat
Presently, Finhaat presents an array of insurance products through its brokerage platform, Finhaat Insurance Broking. These offerings include various types of insurance which include parametric, health, life, and motor insurance. They are carefully designed to be affordable and meet the specific needs of the target group.
The startup methodically transforms the sales process and ongoing support into digital formats across the entire product journey, starting from the initial introduction to accessing the benefits. The distribution process is made stronger through strategic partnerships with organizations present in these regions using their digital platforms to offer assistance.
Early Investment and Revenue Sources
As for its business model and revenue generation, Finhaat initiated its journey with a seed investment from undisclosed sources in November 2022, followed by significant personal investments from the three co-founders. Though the exact revenue remains undisclosed, the startup’s revenue stems from brokerage charges imposed on financial product companies, chiefly insurance providers.
Sandeep Katiyar emphasizes, “Our forte lies in rural management, and these financial product companies encounter difficulties in reaching this demographic due to insufficient infrastructure and resources. This led to a collaborative partnership where they work in tandem with us.”
Finhaat functions as the conduit and sales collaborator for these product companies, facilitating distribution and delivering customer support at the grassroot level. Vinod Singh adds, “Finhaat’s offerings are among the most economical in the market because we can price products competitively by achieving significant volumes and diversifying geographical risks. This empowers us to employ statistical assumptions to optimize product pricing.”
Finhaat’s team which consists of 64 members works closely with institutional partners. They offer training and assistance to the field teams of their partners, improving their sales efforts, simplifying the onboarding process, and efficiently managing post-sales inquiries. Additionally, Finhaat guarantees that the tailored products match the preferences of the target audience in cooperation with the insurance companies.
Growth Story
One notable aspect of Finhaat’s operations is its deep involvement in India’s growing insurtech sector, existing alongside other players such as Bima Plan, Zoppers, and Turtlemint. The sector’s growth is substantiated by substantial capital influx, witnessing $17.8 billion in funding in 2021 and witnessing the ascent of 22 unicorns. CEO Vinod Singh accentuates, “While most competitors concentrate on urban and Tier I, II cities, Finhaat is primarily devoted to Tier III, IV cities, and rural areas.”
This distinction arises from its technology-infused service platform, particularly evident in the claims process, to serve the lower-income segment. This manifests in a fully digitalized claims journey for products such as health and life insurance, regardless of the insurance provider involved.
Finhaat collaborates with a network of 50 local organizations, including microfinance institutions, MFIs, NBFCs, NGOs, and grassroots entities. These partnerships offer vital support in the form of local representation, conducted in the native language and aligned with local concerns.
Looking ahead, the startup remains dedicated to its foothold in the insurance sector, with plans to establish a savings vertical.
