Arthan Finance Company Profile

Background

Arthan Finance Private Limited, established on December 11, 2018, is a Non-Deposit taking Non-Banking Financial Company (NBFC) licensed by the Reserve Bank of India (RBI) under registration number N-13.02354. The company specializes in providing financial solutions to self-employed entrepreneurs, Micro, Small, and Medium Enterprises (MSMEs), and consumers across India. Arthan Finance's mission is to transform small businesses by offering innovative and customized financial products, blending local expertise with a technology-enabled environment to support the "missing middle" and help them rise above. Its vision is to be a preferred financial partner and act as a growth catalyst for small businesses, enabling job creation, improving financial and social well-being, and contributing to economic development.

Key Strategic Focus

Arthan Finance focuses on providing growth capital to self-employed nano and micro enterprises in Tier II, III, and IV cities across Maharashtra, Odisha, Andhra Pradesh, and Telangana. The company leverages advanced data analytics, artificial intelligence (AI), and machine learning (ML) algorithms to assess credit risk and tailor financial solutions for the unorganized sector. This technological approach streamlines operations and enhances customer experience, positioning Arthan Finance as a key player in driving financial inclusion in India.

Financials and Funding

As of June 2024, Arthan Finance has raised approximately ₹83 crore in funding. In its Series B funding round, the company secured ₹50 crore from investors including Incofin India Progress Fund and the Michael & Susan Dell Foundation, a returning investor. The funds are intended to grow the company's Assets Under Management (AUM), expand its geographic footprint, and invest in advanced AI and ML-based underwriting systems.

Pipeline Development

Arthan Finance has disbursed over ₹500 crore to more than 20,000 borrowers, with loan amounts ranging from ₹2,000 to ₹20 lakh. The company plans to double its branch count and further invest in technology to improve operational efficiency and customer service. The goal is to reduce the loan sanctioning turnaround time from the current seven days to three to four days by automating the entire underwriting process.

Technological Platform and Innovation

Arthan Finance differentiates itself through its proprietary AI and ML-based underwriting systems, which enhance the company's ability to assess credit risk and tailor financial solutions for the unorganized sector. These technological advancements streamline operations and improve customer experience, ensuring efficient risk discovery and loan disbursement. The company's innovative approach combines operational excellence, community presence through phygital outreach, and cutting-edge technology to cater to an underbanked population of more than 11 million nano enterprises with an estimated credit demand exceeding $25 billion.

Leadership Team

Pravash Dash: Managing Director & CEO

Kunal Mehta: Founder & Director

Sunil Gulati: Independent Director

Gowrisankara Rao Alamanda: Chief Business Officer

Rupesh Kalokhe: Chief Operating Officer

Rudra Biswal: Chief Technology Officer

The leadership team brings extensive experience in financial services, technology, and business operations, driving Arthan Finance's mission to support small businesses and entrepreneurs.

Competitor Profile

Market Insights and Dynamics

The MSME lending market in India is substantial, with over 11 million nano enterprises and an estimated credit demand exceeding $25 billion. The sector is characterized by a significant underbanked population, presenting opportunities for financial institutions to provide tailored solutions. The integration of technology, particularly AI and ML, is becoming increasingly important in assessing credit risk and streamlining loan disbursement processes.

Competitor Analysis

Key competitors in the MSME lending space include traditional banks, other NBFCs, and fintech companies focusing on small business loans. These competitors vary in their focus areas, technologies, and achievements, contributing to a dynamic competitive landscape.

Strategic Collaborations and Partnerships

Arthan Finance has established significant partnerships with investors such as Incofin India Progress Fund and the Michael & Susan Dell Foundation. These collaborations provide not only financial support but also strategic guidance, aligning with Arthan's vision to drive financial inclusion in India.

Operational Insights

Arthan Finance's strategic considerations include leveraging its technological capabilities to differentiate itself from competitors, expanding its geographic footprint to reach underserved regions, and continuously enhancing its product offerings to meet the evolving needs of MSMEs. The company's commitment to innovation and customer-centric solutions positions it favorably in the competitive landscape.

Strategic Opportunities and Future Directions

Arthan Finance's strategic roadmap includes doubling its branch count, further investing in AI and ML technologies to automate underwriting processes, and reducing loan sanctioning turnaround times. By focusing on these areas, the company aims to strengthen its market position, expand its customer base, and contribute to the economic development of small businesses in India.