Inclusive Business Analysis for Avanti Finance

Avanti Finance is a non-banking financial company (NBFC) founded in 2016 with the mission to serve 100 million households in India through its paperless, presence-less, and cashless lending solutions. Avanti Finance operates through a partnership model with microfinance institutions (MFIs), Agtech companies, non-governmental organizations (NGOs) and social enterprises, and farmer producer organisations (FPOs).

It provides agriculture, livelihood, livestock, and small business loans to rural and semi-urban customers. Notably, 90% of their borrowers are women and 60% are new-to-credit (NTC – no previous formal credit history).

Avanti Finance uses a digital mobile-based onboarding and underwriting application facilitating disbursements within 24-48 hours.

Key findings and observations from this IBA were:

1. Avanti Finance has a rapidly expanding customer base from 45,000 customers in 2021 to 300,000+ customers in 2024. It is spread across 27 states in India and works with 80+ partners. Rural women are the largest borrower segment with increasing uptake of higher ticket size loans.
2. MFIs are their largest partner segment due to extensive reach and stronger community presence, better portfolio performance, and ability to scale. However, MFIs command higher partner commissions translating to higher borrower interest rates. Agtechs or X-techs and FPOs have higher farmer impact potential but face challenges to scale. X-techs provide bundled services across the value chain (inputs, advisory, and market linkages) resulting in improving farmer incomes through deeper engagements. In the future, as X-techs and FPOs mature, this channel could drive growth for the company. Avanti Hubs enable a deeper local presence and could scale selectively for micro, small and medium enterprise (MSME) loans, product pilots, and higher-ticket individual loans.
3. Avanti’s digital platform drives efficiency through reduced onboarding costs, reduced collection and partner coordination efforts, and reduced cash-handling risks. It works in remote rural locations with limited internet connectivity. Borrowers save time and money due to fully digital onboarding process.
4. Borrowers value Avanti’s faster disbursements, respectful field staff and flexible repayment structures. Farmers see income improvements through an X-tech’s bundled services. Climate shocks such as erratic rainfall and drought are affecting farmers and climate insurance remains a major gap.