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After co-founding India’s largest e-commerce firm Flipkart, entrepreneur Sachin Bansal on Thursday said he plans to simplify and improve accessibility of financial services for a billion users, as he aggressively doubles down on the BFSI sector with his latest venture Navi.

Speaking at the Global Fintech Festival 2020, alongside managing director of Sequoia Capital India, Rajan Anandan, Bansal said the middle-class Indian is still under-tapped and doesn’t get good service from banks and other financial service institutions owing to the cost of operations.

“Our mission is to simplify financial services for a billion users and make it accessible for them, by creating a bank for a billion users. Basically the cost of operations is really high for this segment and it passes on to customers. Our focus is the middle income group, the top 50 million is well served by banks. And in spite of having the means, the next 100 million which isn’t the high income group, don’t get the attention of the banks," said Bansal.

“We are one of the largest digital lending startups in the country within a short span of time," he added.

Earlier this year, Bansal had said that he will be committing his entire proceedings from the sale of his stake in Flipkart (around $450 million) for the startup. In April, Navi raised 204 crore from private equity firm Gaja Capital and others.

In June, Navi launched a mobile app to provide instant personal loans targeted at consumers in the middle-income segment.

Bengaluru-based Navi was founded by Bansal in May, 2018 after he moved out of Flipkart. He has also backed several tech startups across sectors in his personal capacity, while Navi has also been making strategic investments in several financial sector firms in the last few months.

At present, Navi disburses unsecured loans to the middle income group, with ticket sizes ranging up to 5 lakh, for a 12-24 month period and underwrites it digitally without any documents, through its app.

Last September, Bansal acquired non-banking financial company (NBFC) Chaitanya Rural Intermediation Development Services Pvt. Ltd. and received approvals from Competition Commission of India (CCI) to acquire Essel Mutual Fund.

“Microfinance is an interesting space. In every rural household there is one smartphone and slowly the woman of the house is also getting a smartphone; gradually microfinance will become more mainstream. Covid changes it a difficult bit, but core focus will be the middle income, and lower income segments," Bansal said.

“We have acquired an NBFC working in rural financing and we also have a financial services play with life insurance, health and motor insurance. It is still very early stages," said Bansal.

Bansal added that Navi Technologies was positioned with the hypothesis that the demand is way higher than the supply for credit in the country.

“... it was a risky strategy but we are confident of underwriting models that we have," added Bansal.

Earlier this year, Navi acquired DHFL General Insurance Ltd from Wadhawan Global Capital, and applied for a banking license.

Last year, it had also applied for a mutual fund license through Chaitanya India Fin Credit Pvt. Ltd.

“Mutual Funds will see a big growth and again will benefit from automation, as margins come down. It is a complicated product, which needs to be simplified for users, just like insurance. We have also applied for a mutual fund license," said Bansal.

“The BFSI sector is not conducive to startups and if I was starting fresh and had no credibility it would have been hard to enter the space. All the financial services players can attract a lot more startups and that can kickstart the innovation in this space," he said.

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