Buenos Finances backed by Y Combinator, Kosh exploits blue collar borrowers



India is witnessing a growth spurt in fintech, aimed at improving the banking experience of millions of blue collar workers that universal lenders often ignore. These fintech startups who like to call themselves neo-banks have suddenly become the most sought after by domestic and global investors. One of these FinTech is Bueno Financee who raised $ 3 million in a roundtable with a group of investors, including Goat Capital, JAM Fund, Olive Tree Capital, Good Water Capital, and others from Silicon Valley.

The fundraising round also saw the participation of angel investors such as Kunal Shah, founder of the credit card bill payment platform CRED, and others.

Founded by Sauav Gandhme and Sandeep Arora at the end of 2019, Y Combiner-backed startup is a credit-focused neobank for the middle and lower income segment of India. The startup plans to use the funds to expand its product offerings and recruiting activities.

“Only 10% of formal credit (mostly secured) goes to 45% of Indian households who earn around $ 200 to $ 400 per month. Bueno Finance wants to democratize credit as well as other financial services for this massive segment, ”Gandhi said in a statement.

Kosh is another Indian fintech backed by Y Combinator, likely to raise its round table early next week to meet the massive demand for credit in this segment where the average worker earns between $ 150 and $ 300 per month is under ‘a formal employment sector.

Kosh has a unique model, based on the lines of traditional microfinance companies, in which the start-up brings together a minimum of three to a maximum of six of these blue-collar workers and grants them a loan. This is an app-based digital lender in which one of the users raises a loan request and adds other group members from their contact list, ensuring that everyone pays back on time. . It’s the premier community finance app that lends around $ 260 per user on average for a 10-month period at a 33% interest rate. However, forming a group to qualify for loans greatly reduces the cost. The company does not lend to any individual borrower.

Founded by Aaysuh Goel and Sahil Bansal As of March 2019, Kosh had so far disbursed over $ 500,000 in credit to around 2,000 borrowers since January of last year. However, the moratorium triggered by the pandemic had slowed aggregate demand for credit.

Talk to Crowdfund Insidersaid Goel, “With vaccines in place and no major national lockdowns, the demand for credit is likely to grow. As a result, the overall market size (AUM) for the blue-collar credit segment is expected to double to $ 60 billion by 2025, growing 20% ​​per year, and Kosh aims to grow 20-fold. here the end of next year. because the worst is behind us.

The Noida-based Kosh uses alternative data such as bill payment, phone recharge, and other utility bills from text messages to determine a person’s creditworthiness.

Some of the other players in the segment are PerkFinance and PhoneByLoan.


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