Jai Kisan, an Indian start-up trying to bring financial services to rural India, where commercial banks have single-digit penetration, said on Monday it had raised $ 30 million in a new round of financing as it sought to expand its activities.
Hundreds of millions of people in India today live in rural areas. Most of them don’t have a credit score. The professions they work in – largely agriculture – are not considered a business by most lenders in India. These farmers and other professionals also do not have a documented credit history, which puts them in a risky category for banks to give them a loan.
Much of the credit these people get ends up being invested in unproductive use, resulting in higher interest and default rates.
Jai Kisan, 3, based in Mumbai, is trying to solve this problem by treating farmers and other similar professionals like businesses rather than consumers.
The start-up has developed its own system – which it calls Bharat Khata – which helps individuals and businesses access cheaper finance and ensures that the money they collect is used for agricultural inputs and equipment and other income-generating business transactions.
Arjun Ahluwalia, co-founder and managing director of Jai Kisan, said that financial services are essential for these people because their entire economy depends on it. “The ability to buy now and pay later is the way most people buy things in India. Credit is an expectation of the Indian customer – it’s not a value-added service, ”he told TechCrunch in an interview.
“If there is availability of formal financing for clients, it is not just the client who is successful. The whole ecosystem that revolves around these benefits for clients, ”he said, highlighting the rise of Bajaj Finance, which has helped several companies to thrive in India by providing loans to clients at the time of launch. purchase, and Xiaomi, the largest smartphone supplier in India, which sells a large number of its devices to customers on monthly plans.
The Bharat Khata service, which launched in April last year, captured more than $ 380 million in annualized GTV operating rate on more than 25,000 storefronts by the fiscal year that ended in March of this year, the startup said.
“Jai Kisan has funded more than 15% of transactions that illustrate the monetizability and quality of the trade captured. The possibility of having the visibility and virality of high quality transactions has enabled Jai Kisan to grow its activity by more than 50% in 3 months. The unprecedented growth trajectory is testament to Jai Kisan’s ability to deploy capital effectively by focusing on the credit needs of core customers, ”the startup said.
The startup, which operates in eight Indian states in southern India, is now looking to expand its presence across the country and increase its workforce. On Monday, he announced that he had raised $ 30 million in a Series A round led by Mirae Asset, Syngenta Ventures and existing investors Blume, Arkam Ventures, NABVENTURES, Prophetic Ventures and Better Capital.
An unspecified amount of funding was raised in the form of debt from Blacksoil, Stride Ventures and Trifecta Capital.
“Jai Kisan is on the verge of disrupting the rural finance industry and we are happy to be a part of their growth story. Jai Kisan’s exceptional growth, the excellent quality of its assets and its growing footprint make it a highly differentiated player in the segment, ”said Ashish Dave, Managing Director of India Venture Investments for South Korean firm Mirae Asset.
“Mirae Asset has always believed in supporting companies that aim to become category leaders, which is evident from our other investments and we believe Jai Kisan is doing it for rural finance,” he said. added.
Like most fintech startups, Jai Kisan has so far relied on its banks and other financial institutions to finance business credit. The startup said it will now fund 20% of all loans on its own. This is why it also raises money in the form of debt in the new cycle.