Rohanjeet Singh Juneja and Karan Desai, joint MDs at the Dhanvarsha Finvest Limited spoke to NewsX in its special segment, NewsX A-List. Their company aims to provide timely, affordable and sustainable access to credit to the country’s almost 500 million under-served borrowers.

Karan Desai started off by talking about their venture, “We are a very young company which started about three and a half years ago. We are an independent institution under the aegis of the 80-year-old Wilson Group of Mumbai. We started with a very simple premise aiming to empower the underserved and unserved entrepreneurs or individuals of India and give them access to timely and institutional credit.”

Talking about their vision, Desai said, “The mission here is not just to focus on financial inclusion where we want to provide for social capital. Our main achievement today is the funding that we provide to our small customers in the community. We are of the view that it’s a very rare occasion that a small institution like us gets to make such a big social impact and help our clients out. And this is achieved by providing timely and affordable finance to people in the MSME segment.”

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Elaborating on the observation of the market scenario especially in times like this, Rohanjeet Singh Juneja started off by quoting Mark Twain, “History doesn’t repeat itself, but it often rhymes. In our view, the situation in India today is very similar to what it was in the late 90s. Not just in India, but globally, that in good times, often, many people take on excessive debt, without knowing the commensurate risks that come with it or without appreciating the commensurate risks. Once the cycle dawns, if you recall back in the late 90s, in India, it was a very similar scenario when you had excessive debt, and changing regulation that eventually led to a shakeout in the sector. Now, a very similar situation has played out in India, which has led to a complete credit crunch for the sector and a commensurate slowdown in economic growth. Therefore, we believe that this time is no different from the late 90s. In India, another similar situation to the late 90s is from 2014 to 2018, there was a proliferation of many different  NBFS that came into doing business, not just because they had a good business model, but they came in search of exploration.”

“What happens at a time like that when there is excessive competition and high growth is, balance sheets get levered up, and if there’s any hiccup in asset quality due to dilution and norms for lending or in pricing, because of excessive competition, any hiccup in asset quality will lead to a disproportionate impact on profitability, and that is exactly what has happened with where we are today. Therefore, we believe that you know going forward just like it happened in the late 90s in India, there will be consolidation in the sector. But at the same time history has proven that in times like this if you can build a good business model, you will be successful. That is exactly where we are today for small and nimble organizations like us who have very governance, a strong foundation of trust or unendurable, like this, we feel that we will do very well.” Juneja further added explaining the mantra of their success so far.

Highlighting how Dhanvarsha is different from its competitors, Desai shared a few insights. He said, “Focusing extensively on the MSME segment, there is a specialized or more than one art than a science actually, where you need to take into account a variety of factors when you look at the businesses. So traditional banks typically do not do much business in this category because they will tend to focus on the larger ticket size loans, where the underwriting data is a lot more easily available.”

Further talking about how Dhanvarsha aims to help the Indian entrepreneurs and help them establish their very own businesses, Desai said, “We are essentially trying to chase those 500 odd million unsolved borrowers where we feel that using a specialized underwriting methodology, we can make a huge difference. I think our biggest differentiator is that we try to enable businesses and we want to be that catalyst to entrepreneurs of India by not just becoming the preferred financial partner, but also their partners in business and social growth. So a number of small customers that we funded have actually gone on to establish new factories, create employment.”

“Our mission is to empower these entrepreneurs, not just by lending a hand to them, but also lending them mind space and heart, which is trying to help them become social capital for all the stakeholders in the ecosystem. Largely, I think, it is also important to note that we are also very technology-focused. So while we call ourselves a FinTech company, we are trying to use technology increasingly, to mitigate risks in our underwriting. And also to reduce our turnaround time substantially,” added Desai.

Adding to this Juneja said,  “We believe in making a difference by building a strong partnership ecosystem. In that effort, we’ve collaborated with multiple partners across various segments that shaped our borrower profile. So we’re making significant strides in collaborating with these partners and stakeholders for future periods. Because our belief is that going forward, collaboration is going to be the key, rather than competition. Because when you have people that collaborate and build good businesses together, leveraging off each other’s strengths, establishes a stronger foothold for you on the market.”

Taking pride in Dhanvarsha’s achievements as an organization, Juneja stressed, “We take pride in ourselves for being able to constantly innovate to diversify our revenue streams, minimize risk, and use our assets and infrastructure more prudently. Therefore, we do not just underwrite on our own balance sheet but we also have a focus loan, retail distribution business, which generates a very strong income for us. And again, that is due to our collaboration with multiple partners.”

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