In the vast and evolving world of financial services, the needs of the emerging middle-class and lower-income groups, particularly in rural areas and tier 3 & 4 cities of India, have often been overlooked. Recognizing this significant gap in the financial product market, a new platform has been established with a focused mission: to cater to this underserved segment of the population.

Finhaat, co-founded by Vinod Singh, Sandeep Katiyar, and Navneet, is a unique financial services distribution platform that caters to the distinctive needs of financially underserved population.

To have a more detailed view of the fintech landscape and how Finhaat aims to cater to emerging Indians, our team reached out to Vinod Singh, Co-Founder & CEO of Finhaat. In this interview, Vinod shares insights about Finhaat and the insurance industry.

About Vinod Singh:

Vinod is a seasoned finance industry professional with a rich background spanning two decades across various banking sectors like Wealth Management, Corporate Banking, and NBFC management. His early career at prominent banks like ICICI and HSBC laid the foundation for his deep understanding of finance complexities. At Avendus, a renowned financial services provider, he pioneered wealth lending solutions and led Treasury teams in retail and private banking at Standard Chartered.

Singh, currently the CEO and Co-Founder of Finhaat, holds an MBA from IRMA and a CFA charter from the USA. 

1Q: Could you provide an overview of Finhaat?

Ans: Finhaat is a financial product delivery platform catering to the emerging middle-class and lower-income segments, primarily based in the rural, tier 3 & 4 cities of India. With its unique assisted digital model, Finhaat seeks to bring together the product partner (financial product provider) and the distribution channel (partner institutions with the reach) to the target population that is underserved and offers much-needed financial services.

The startup has set off this process by offering insurance products first; through its Insurance Broking Platform – Finhaat Insurance Broking Pvt Ltd. The products being offered across the Parametric, Health, Life, and Motor categories are structured to ensure that they are suitable and affordable and cater to the specific requirements of the segment.

The assisted digital model also allows the startup to service the offerings through product life-cycle (from onboarding to accessing benefits) by leveraging technology and the presence of partner institutions on the ground. We are headquartered in Mumbai.

Finhaat is working with multiple partner organizations and our individual financial partners, with the aim to build a robust and fair distribution network. We believe that technology will hold the key to a wider reach and a large-scale distribution in this segment, and so our team is building a cutting-edge technology platform to ensure that we not only deliver the right product to our customers but also deliver efficient post-sales services.

2Q: Can you explain the nature and purpose of Finhaat’s partnership with Nidhi companies? What advantages or benefits does Finhaat expect to gain from this collaboration? How does this joint effort benefit the end users in tier 3 and tier 4 cities?

Ans: Finhaat started with the belief that all individuals should be equipped to manage their financial health with ease and confidence. Insurance has a very low penetration in the target segment that we are working with. One of our key strategies to overcome this challenge is to work with institutions that have an existing reach and build trust with the target population to offer these products.

Nidhi Companies have a long history in Maharashtra, having been started with the objective of promoting thrift and saving between the members and using these deposits for borrowing and lending money for the members. However, insurance relevant to their target population has not been introduced to their members – and we see this as a mutually beneficial partnership.

Nidhi Companies can offer the much-needed low ticket size and relevant insurance products to its members through our platform and we can reach communities and introduce them to products that can help them manage their financial risks and emergencies. We further bring them the fully digital claims platform for the curated products with support from Finhaat during any claims related complications.

We have observed that often end users in this target segment are not offered products that cater to their specific needs; at the same time no trusted partner to handhold them through the process of selecting and accessing the benefits of these products.

Our platform offers the end users the following:

·   A curated product platform that is built to cater to the very specific needs of the target segment

· Digitisation of sales and post-sales support to ensure that we are able to provide a paperless journey through the product life cycle

Our tie-up with Nidhi companies helps us create a robust distribution channel in hitherto underserved populations. The platform offered to the Nidhi companies allows us to present in these areas and provide the right product and digital assistance to ensure that we are able to assist at each level of the product journey.

Our Platform supports the Nidhi Companies through:

• Creating specific products In health and life and bringing them to their clients on a fully digital platform
• Offering multiple alternatives for suitable products from financial institutions (product partners)
• Handholding and proper training of their staff and agents on a regular basis to drive their sales effort
• Support onboarding and post sales, especially in terms of claims through our own Tech platform and trained resources
• Swift integration with their IT platform to drive sales and internal reporting
• Local-level marketing support to create awareness among customers
• Fully digital claims journey for curated products with support from Finhaat In claims journey. This ensures that they are able to provide a good service to their clients during claims.

3Q: In what ways are Nidhi Companies assisting Finhaat in addressing the financial needs of specific communities?

Ans: Nidhi Companies have helped create and sustain the culture of thrift and saving in their member community. This has helped create basic financial literacy in the target population, and they understand the need for basic financial products – however – there is a dearth of specific financial products that suit their needs. The partnership of Finhaat with Nidhi companies seeks to bridge this gap and offer curated products that are simple, and affordable, and also support post-sales to them through the complete product life cycle like claims.

4Q: What are the current challenges that Finhaat is encountering, and what strategies do they have in place to overcome them?

Ans: Rural distribution of financial products, specifically Insurance, has 3 key challenges:

1. Products built for urban areas are generally pushed into rural with price points & benefit reduction

2. Lack of post-sales support

3. Lack of trusted one-stop solution for Rural population

The startup targets to solve all these three problems through:

1. Finhaat’s curated product platform is built to cater to the very specific needs of the target segment

2. Digitise the sales and post-sales support to ensure that we are able to provide a paperless journey through the product life cycle

3. Distribution through ties up with institutions that have a presence in these areas and providing the right product and digital platform to ensure that we are able to provide assistance at each level of product journey

5Q: How does Finhaat distinguish itself from its competitors in the market?

Ans: We work in the financial services distribution space in the underserved semi-urban and rural population segments. There are organizations overlapping with our work. However, most of the competitors are working in urban spaces or tier-1/2 cities, whereas Finhaat is working predominantly in tier-3/4 cities & rural areas. Also, one of the capabilities Finhaat poses is a tech-enabled service platform, especially for claims. Finhaat is offering customized tech-enabled end-to-end services, along with a curated product that suits its lower-income target segment.

6Q: How many Nidhi companies have Finhaat partnered with in Mumbai?

Ans: Finhaat has active ongoing partnerships in Nashik, Aurangabad, and Konkan regions in Maharashtra. Given the strong presence and awareness of these institutions in the state, Finhaat is keen to build upon these partnerships and spread their reach and product offerings across the state.  

7Q: Could you share insights into Finhaat’s future plans and initiatives?

Ans: Presently, Finhaat caters to more than 50 Institutions covering more than 30 lacs lives across 60 percent of the pin codes of India through our products in FY23. In FY24, Finhaat’s key focus area for growth will mainly be three-fold:

1. To focus on increasing its curated product suite through the right product building
2. Increase penetration through multiple partner tie-ups and enable our partners to offer the right product and experience to their clients and,
3. To reach out to 35 lakh+ people in FY24.

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