Vivriti Capital facilitates Rs.50 crore securitisation deal for Vistaar Financial Services.
WOMEN’S DAY CELEBRATIONS IN VISTAAR
VISTAAR FINANCE has won “The Inclusive Finance India Award 2018.
Vistaar Finance is ranked 15th in the India’s TOP 50 NBFCs ranking under the category Social Engagement and Reach (in FY18) by The Banking & Finance Magazine.
Vistaar Finance case study published in The Asian Business Case Centre in Nanyang Business School, Nanyang Technological University, Singapore.
Vistaar Financial Services Pvt Ltd is awarded with the “Leaders” award in BIG 50 BFSI Leaders award.
Startups disbursing small loans to micro and small enterprises are grappling with the issue of combining tech and non-tech strategies to grow faster
Embracing Technology: Need of the Hour in BFSI
Vistaar Finance aims to disburse Rs 125 crores in MSME loans in FY18
VISTAAR FINANCE RANKED AMONG THE INDIA’s TOP 50 NBFCs
Fintech EDGE -The Experts@ Bengaluru- Ramakrishna Nishtala, MD & CEO, Vistaar Finance
On idea & opportunity of lending to MSMEs
Deal Street: Vistaar Finance Raises $18 Million In Debt Funding
Financing the ‘Missing Middle’
DEMONETISATION LONG-TERM BENEFITS FOR INDIA
On The Right Track
Vistaar appoints ex-Sebi chief C B Bhave as non-executive Chairman
Six Learnings on Innovation from Six Industries From the event “India’s National Competitiveness Forum and Porter Prize”.
Mint- Institute for Competitiveness Strategy Award in the ‘Finance Banking and Insurance’ category -2016
Vistaar Crosses Rs. 1,000 Crores Portfolio
Vistaar Finance won the SKOCH Award for “Segment Leadership & Financial Inclusion”
Exclusive coverage of Vistaar Finance on CNBC TV 18
In Pursuit of Excellence: The Tenth India CFO Awards
Technology trends and changing responsibilities of CIO in Financial Services
As Banks Step Back, B2B Markets Find an Action Role in SMB Story
Vistaar raises Rs. 250 crores
Find below the link for news paper publication on CSB transaction.https://timesofindia.indiatimes.com/business/india-business/vivriti-capital-facilitates-rs-50crore-securitisation-deal-for-vistaar-financial-services/articleshow/70894737.cms
VISTAAR FINANCE has won “The Inclusive Finance India Award 2018” co-hosted by NITI AAYOG, ACCESS Development Services & HSBC India, under the category – Non-Banking Finance Company Lending to Micro and Small Enterprises.
This award was presented for demonstrating excellence in pioneering technological innovation, strong governance and best practices with efficient delivery to small and micro enterprises.
India’s Top 50 NBFCs Ranking 2018 was carried out on the basis of two parameters: Annual Turnover and Social Media engagement
The citation about Vistaar is a follows:
Vistaar Finance is a new generation NBFC, well diversified across sectors, geographies and offers unique products aligned to the company’s long-term policy of de-risking, while meeting customer demands to a maximum. Vistaar Finance has serviced over 2 lakhs MSME customers till date since its inception in 2010, which has created direct & indirect employment of about 6 lakhs. Vistaar has a unique methodology for its vastly varied customer segments. It constantly innovates on its processes to serve its customers, using differentiation created through linkages. Vistaar focuses on providing customized products aligned to the needs of small businesses on the three key dimensions of loan size, repayment frequency and tenor. The company is committed to ensuring high standards of transparency and accountability in all its activities.
Read more about this here https://bfsi.eletsonline.com/indias-top-50-nbfcs-ranking-2018
The Award nomination was for the best projects related to customer experience where Vistaar Financial Services Pvt Ltd was among the first ones to implement vernacular BOTs supporting regional languages for digital channels like Facebook, inbound calls etc. Mr. Nikhil Bandi, Chief Information Officer & Head of Operations, Vistaar Finance had received the award at a function held on 7th June 2018 at Grand Hayatt Mumbai.
The increased complexity of IT systems and the presence of inter-linked (not-integrated) legacy systems is common in financial services, which many times becomes a challenge when the business wants to experiment new strategies with a quick time-to-market. In some cases, the functionality and business controls of age-old proven systems gets overshadowed by the new technologies where ease of use takes priority by the end users, this also has its long-term disadvantages. However the smart technology leaders hit a balance between proven legacy controls and new generation smart and user-friendly interface by designing hybrid business solutions. Such solutions help in keeping the business rules and stability intact, at the same time addresses the need of rapidly changing customer-facing applications. Over the years, the brain developed in terms of banking is present in the core banking (legacy) systems, but interface has been experimented with, time and again.
Unlike some of the other industries that are embracing the dynamic technology changes, banking industry was a bit apprehensive and careful to become a part of this transformation due to the nature of business, though this industry is also seen adapting this transformation lately. For example, earlier if someone had to withdraw money from bank, they visited ATMs. But now banks have revamped digital banking giving transaction access completely to the user to execute any transaction without compromising the customers’ security by introducing multi-layer authentications.
Proliferating adoption of web and mobile applications in the banking industry has made the industry prone to advanced cyber attacks. With the evolution of new technologies, carrying documents and other tools have been done away with. Thus, security in financial sector has taken the front seat. Banking sector is a highly regulated sector wherein a software is hosted in the data center. The industry has to go through certain RBI guidelines and norms that are taken care in terms of data security in banks. So whenever an application is built on mobile, PC, desktops, organisations have to be very sure to take stringent measures of vulnerability assessment of applications before implementation.
Moreover, the data centers also have to meet all the guidelines of not only RBI but also of international regulating bodies for banking. And these are the areas where hackers are trying to step ahead but companies are definitely catching up fast. There is no end to security protection as this is a continuously evolving area.
In order to provide flexibility and agility, banks are aggressively adapting public cloud services. In addition, financial institutes are in the need of private cloud services even more as they have to deal with vital information of the client. Also response time on cloud is faster. With the emergence of FinTech firms, banks are also exploring the possibility of using AI to improve efficiency and customer experience. The advent of AI has become a game changer. Presently, AI is exponentially being accepted across financial services industry and financial institutes are investing in AI platform leading to customers’ satisfaction. Consequently there has been increase in their customer base. When queries are being raised, chatbots extends support to the customers. Furthermore, bank having known customer’s requirements would immediately provide suggestions for services thereby saving time.
As banks have been facing challenges in meeting customer expectations, they need to emphasize on three aspects
1) the changing digital platforms and hence creating numerous interfaces,
2) AI which has become vital to acquire customers at fingertips, and
3) the power of analytics. These three aspects deal with how to use vast relevant data that needs to be crunched, to identify what type of customer we want to deal with- their social standing, their paying capacity (telephonic or electric bill); allis considered while acquiring a new customer, relevant for companies. For example an insurance company is subsidising a fitness wrist band (a calorie wrist band) for people who generally go for jogging. Purpose to subsidise is that the company will know if the person is healthy and the insurance company will further subsidise the insurance for the person and hence will receive a preferential rate. This is what the power of analytics, AI and Machine Learning, which is not just a step but a leap in building a new digitally transformed world.
The Bengaluru-based non-banking finance company, Vistaar Finance has come up with a new unsecured loan product for mid-level manufacturing enterprises. Here in an email interaction with ETCFO’s Mannu Arora, Sudesh Chinchewadi, EVP, CFO & Company Secretary shares some details of the sector and the new offering that the company is rolling out. Edited excerpts.
For the first time, The Banking and Finance Post, Asia and Middle East’s premier magazine has come up with the ranking of India’s top 50 Non-Banking Financial Companies (NBFCs). The “India’s Top 50 NBFCs Ranking 2017” has been introduced with an aim to provide useful insights into this important segment of the economy, which is being streamlined to fund the unfunded.
NBFCs play a critical role in the Indian financial system. They provide services such as personal loans, housing loans, gold loans, insurance and loans for purchasing commercial vehicles, machinery, and farm equipment, among others. The ability of NBFCs to understand their customer profile, their credit portfolio and deliver customised products and services are driving their fast growth in India.
Vistaar Financial Services Pvt Ltd was ranked 50th in the India’s TO 50 NBFCs
Read the original article: http://bfsi.eletsonline.com/indias-top-50-nbfcs-ranking-2017/
CNBC TV18 in association with Rubique is hosted a knowledge-sharing series in Bengaluru. The Series was about key stakeholders of the financial services industry debate and draw a Road map for A Viable & Future-Ready Financial Services Sector – as India charges ahead to emerge as the world’s next Fintech Superpower.
Mr Ramakrishna Nishtala was the Guest of Honor and was asked to share his insights , experiences and perspectives on the fast growing Fintech sector
Video link: https://youtu.be/hiXBG959RxU
Mr. Ramakrishna Nishtala, MD & CEO and Co-founder was invited for a special panel discussion for ‘MSME Leadership Series – Season 2’ which was jointly hosted by CNBC-TV18 and Union Bank of India. Theme for the panel discussion was ‘Re-Imagining The MSME Economy: Ideas, Incentives & Investments’.
Here below is the verbatim of the statements by Mr. Nishtala:
“I was working in a financial services company (in 2009) and I was travelling to a small place called Annur (Tamil Nadu) which I guess many people may not recognise on the Indian map and I met a person who was a classic micro-enterprise entrepreneur who had grown his business from two to 30 power-looms over a period of 15 years. He wanted to take this number from 30 to about 45 because of huge demand. He thought to apply for a loan and had been to a Bank. And over a five months period and about 23 visits later, the Bank said no to him. This was a moment of epiphany that if you have an entrepreneur who has grown like this from being a power-loom labourer to owner of two looms and later to 30 looms, and he wants to further expand his business but there was no space for him to get a loan. That is when I said let me look at starting a company which is not focused on the ‘SME’ part of the ‘MSME’ which actually gets focused in any way, but for the ‘M’ part- i.e., ‘Micro-enterprises’.”
Video link: https://www.youtube.com/watch?v=oxzBl_kyyTA
Bengaluru-based financial services startup, Vistaar Finance, raised around Rs 125 crore ($18 million) in debt funding from Reliance Mutual Funds, Ramakrishna Nishtala, managing director and CEO of Vistaar Finance, told BloombergQuint over the phone.
Founded in April 2010, the company aims to use the funds for onward lending to medium, small and micro enterprises in rural and urban areas. The lender provides loans in the ticket size of Rs 4-5 lakh, and has disbursed more than Rs 1,100 crore to over a lakh customers so far. Vistaar finance had last raised $27.3 million in a Series C round from Westbridge Capital, and followed it up with an internal round of $37.58 million, led by existing investor Westbridge Capital and earlier investors, Omidyar and Elevar Equity, in May 2015
The company currently operates across 205 cities.
Vistaar Financial Services is striving to create financial inclusion for the ‘missing middle’, typically family businesses run by entrepreneurs who deal with cash. So far, it has disbursed Rs. 1,100 crore in loans to over a lakh customers through 200 centres across India.When Brahmanand Hedge and Ramakrishna Nishtala founded Vistaar Financial Services in 2010, their goal was not to find a spot in India’s already cluttered fintech space, but to strive towards financial inclusion, particularly among businesses that operated in the MSME (Micro, Small and Medium Enterprises segment. Think Kirana store, a power loom or a brick kiln.
In numbers, Vistaar was looking at 36 million enterprises with a total unmet need of Rs. 2.9 trillion. Of course, while banks and NBFCs tried to address some of the sector’s credit demand, primarily of the medium and large businesses and of the productive poor (served by microfinance institutions) Vistaar envisioned a majority of the total MSMEs segment, the self-help groups or the missing middle, as its addressable market; 76 per cent of the market share, to be precise. “We were looking at family businesses, run by entrepreneurs who deal with cash. And, a key challenge we were faced with is, there is no documentary evidence of their revenue or cash flows and they have high loan requirements,” explains Nishtala.
“One of the biggest challenges we faced was in identifying the right team, especially because we served a segment that hadn’t been addressed before. To tackle this, we first brought together a core senior management team, whose ideas we aligned with the company’s vision. Later, we on-boarded and trained next level of talent to work on ground.”
Assessing Credit Worthiness
So, how did they arrive at a methodology to evaluate the borrower’s credit worthiness? As a first step, the team held an in-depth study of eight different sectors, such as hotels & bakery, dairy and allied businesses, home-based enterprises, Kirana stores and more, to arrive at a credit methodology. Customised to each sector, it arrived at a mechanism wherein it first assesses the borrower’s income by evaluating non-traditional documents for income, ability, intention, business sustainability and credit behaviour. Then, it determines the business’ credibility through reference checks in the supply chain, neighbourhood and other sources, and finally, it initiates a loan against collateral.
While refinement of product and credit methodology is an ongoing process at the company, it currently offers four products on the platform; Small Business Hypothecation Loan (SBHL) of up to Rs. 95,000 with a tenor of two years, Small Business Mortgage Loan (SBML) of up to Rs. 25 lakh with a tenor of five years, bill discounting with loan up to Rs. 25 lakh and a 90-day tenor and, Equipment Finance with a loan up to Rs. 25 lakh over a tenor of four years. “While bill discounting is targeted at manufacturers with an annual turnover of Rs. 1 crore, equipment finance is designed to enable individuals, partnership or proprietorship businesses purchase machinery,” shares Hegde.
Financing Its Growth
With loan disbursements also came a need for Vistaar to begin seeking external funding to fuel its venture. It raised its first round of US $3 million (before 2011) from Sama Capital and Elevar Equity, and followed it up with a US $1.5 million round in 2011. In 2012 again, it raised US $8 million from Lok Capital and Omidyar Network. “From here on, we wanted to explore commercial funds from large investors. That’s when Westbridge Capital came into light,” adds Nishtala. This was in May 2014, when Vistaar raised a Series C of US $27.37 million from Westbridge Capital, soon following it up with an internal round of US $37.58 million, led by existing investor Westbridge Capital and earlier investors, Omidyar and Elevar Equity.
During the last funding round, its co-founder, Hegde had pointed out that the money would be channelized towards increasing its portfolio to Rs. 2,500 crore in the next three years, along with an expansion (of its centres) from 150 at that time to 275 in two years. “While this continues to remain our focus, we also plan to double the number of customers we serve from the current 1,30,000 across MSME segments,” adds Hegde.
While being an NBFC institution serving the ‘missing middle’ stands as a key positioning for Vistaar, it counts its technology and digital backend to be its key strength and game-changer. “All our processes are paperless, digitised and automated. Take for example, our in-house IT platform; it can process 7,000+ transactions in a month and enable electronic disbursement of loans via banks, not only bringing agility into the process but also minimising risk for customers,” explains Hegde.
With psychometric tests (to evaluate a borrower) and deeper adoption of data and analytics being the key focus for Vistaar going forward, its co-founders are confident that anyone wanting to replicate Vistaar’s model in the market will take at least three to four years to stand neck-to-neck. “We want to be a leader in this segment and specialise specifically in the MSME financial space,” concludes Hegde on an ending note.
Read Original article: http://www.thesmartceo.in/fintech-35/financing-the-missing-middle.html
But short-term impact could be mixed for different segments and businesses
Vistaar Finance is a Non- Banking Finance Company (NBFC), based out of Bengaluru, India, serving the MSME segment, primarily in rural and semi-urban areas. We believe that by supporting and creating new economic opportunities for deserving small business women and men, lives can be enriched and communities can be transformed.The company focuses on the missing middle segment, which is not effectively served by the formal financial system. The objective is to make finance available at a reasonable cost and deliver in a transparent manner. In the process, Vistaar aims to continuously attract mainstream capital and human resources to serve these chosen segments who are the backbone of India’s vibrant economy.
There are over 40 million MSME in the country contributing to over 40% of the manufacturing output. The total unmet demand is close to Rs. 2.9 trillion, which offers a unique opportunity for Vistaar across micro, small and medium sized enterprises. While banks and NBFCs try and address some of the sector’s credit demand, majority of the total MSME business units constitute Vistaar’s target segment. In spite of being significant segment, less than 10% of them access to formal financial services access.
The views on demonetisation is based on current understanding of market, our customer feedback and feedback from other players including a few banks, NBFCs and rating agencies. Demonetisation of higher denomination notes of Rs. 500 & Rs. 1000 in India from the mid-night of November 8 is a significant step and is expected to impact the economy both in the short and long term. While short-term impact could be mixed for different segments and businesses, we expect long term impact to be positive for the country.
Immediate short-term impact
Increase in bank deposits, increase in bank liquidity
Increased supply of funds; we expect RBI to announce cut in interest rate and reduction of lending
rates by banks to customers
India being predominantly cash economy, at the lower end of the pyramid, demonetisation is likely to
impact business and revenues of these customers significantly. Extent of impact could be different for
Likely to impact repayment of loans by cash segment – primarily microfinance, MSME customers
Expect lower credit growth and lower loan off take during next 2-3 months
However, in the medium term, we expect a boost to the economy. Also, as a country it should have bias in favour of digital money and resultant increase in economic activity, revenues, tax collection etc. Also, government investment in infrastructure should significantly go up and prices of goods and properties could come down. In the medium term, we expect prices will ease, inflation, to come down which should benefit all segments of the society.
As a company, we primarily operate in rural and semi-urban parts of the country, and serve MSME customers. We feel our customers will most likely be affected in the short term. Hence, to understand this, we carried out a survey on November 15 and 16 across eight states and more than six sectors or business activities. These inputs have come from over 100 of our customers.
The survey report from the ground zero depicts that post the decision of demonetisation:
Close to three-fourth of our respondents have seen immediate drop in sales
About 77% of them expect sales to come back to normal in the next 2 months
About 70% feel, it will make them think of an alternative to cash in the medium term, including mobile
payment and e-wallets, and willingness to explore digital money as an option
75% of them also feel they will go back to cash once the situation normalises
Most of them (90% plus) are optimistic that it will be business as usual in the medium term (3-4 months)
As a company, we expect loan disbursement to slow down in the coming few weeks but expect to normalise in 3-4 months. However, this will force all financial services players to rework their business strategy based on electronic platform. Use of technology and digital money will get a fillip in the medium term and we also expect resultant reduction in cost. All these should be a reality over the next 1-3 years.
Demonetisation will also enhance opportunities to banks and other financial services company. The government of India is also pushing things to move away from cash and encouraging establishments to accept digital money. For example, the national highway authority is working on a unified card system for payment of toll across the country. This is an opportunity for banks to deepen the penetration of card, wallet etc. Also, many of the establishment will be more than willing to shift to electronic platform. All these things will change the dynamics of the financial services market for the better in the next 1-3 years. The cost of transaction and cost of cash management etc. will go down significantly.
Read Original article: https://issuu.com/internationalfinancemagazine/docs/jan2017
Many more start-ups fail than succeed in today’s business environment. Consequently, the CFO’s role in such companies varies from that in a more established one. Specifically, it is about addressing a wide range of issues: capitalising the company whenever possible, mitigating risk at every stage, planning and forecasting with great rigour, and continuously enhancing the trust of investors. Sudesh Chinchewadi, CFO of Vistaar Financial Services and this year’s winner of IMA’s India CFO Award for ‘Excellence in Finance in a Start-up’ is a particularly fine example of how one can build a successful company from scratch.
Over the past three years, Mr Chinchewadi has proven that it is possible for start-ups to be about so much more than ‘cash burn’, and for a CFO to be pivotal to creating the foundation of long-term greatness for firms ‘just born’. He joined Vistaar – an onward lending firm focused on the MSME sector – at its inception, hand holding the tiny company through its key needs of funding at one end, and rapid expansion into India’s Tier II and III cities at the other. Whilst its potential is immense, Vistaar’s chosen area of operation – MSMEs in rural/semi-urban areas – is particularly vulnerable to economic volatility and talent shortages.
Vistaar Financial Services, an MSME-focused financing firm, today said it has appointed former Sebi chief C B Bhave as non-executive Chairman and Independent Director.
Bhave was the Chairman of Securities and Exchange Board of India (Sebi) for a period of three years during 2008-11, prior to which he was the Chairman and Managing Director of National Securities Depositories Ltd (NSDL).
“A large part of the Indian economy is still outside the formal financial activity. Vistaar Finance along with others is engaged in the process of integrating the sector and including them in the formal lending activity in order to grow faster,” the company quoted Bhave as saying in a statement.
Vistaar Finance has a loan portfolio size of Rs 1,000 crore and currently has 198 branches primarily in rural and semi-urban areas spread across 135 districts and 12 states.Read original article
“Strategy is not about boardroom meetings and macroeconomic conditions but should include more specific about what customers will actually need. What does Unified Payment Interface, Aadhar info integration online and all this digital disruption mean to a small businessman in a village who will go to a local bank branch 23 times only to get a rejection?” – Vistaar Finance Managing Director
In IT/service outsourcing:
Rostow Ravanan, CEO and Managing Director, Mindtree – Not a very large player but interesting IT company. “Industry is at cusp of disrupting affecting all players. This leads to many new possibilities, for example a client of ours was able to earn 200 million dollars because of a 3 month project we did for them. It’s exciting. The negative part about innovation is the pressure to enable people, employees and clients, to succeed amidst this disruption.
Angshu Mallick, COO, Adnani Wilmar Limited – An edible oil company, sixteen year old. “Since about 10 -15 years, customers have moved from unrefined, unbranded to refined and branded oils. However taste still rules. Customers will not stick with an oil if it won’t add taste despite any health benefits. However we try to give customers an oil that is both health and will add taste. We have found that Rice bran oil is fastest growing edible oil across categories and comparable to olive oil. Mixing types of oil like Sesame oil is another option. Cold pressed Sesame oil is healthy we find in clinical trials and we hope to leverage this finding in the future.”
Bhasker Iyer, CEO, Abbott India – Abbott is present across all health care sectors. “Our conscious trade-off was to first focus on metro and tier 1 to reach most number dispensaries, doctors and hospitals. It has paid off for us. Now we are looking at penetrating what we call “extra urban areas”. Abbott is also looking at leveraging digital media to enhance medical knowledge bases, doctor-patient relationships.”
M K Anand MD and CEO TIMES Network – “Broadcast channels are right in the middle of tsunami that is tech disruption. It has given rise to more players. Now YouTube, Amazon are also media companies. Distribution channels are being affected too, you have satellite and cable channels which are monetized. But you have internet allows create and publish for free.”
“As a TV channel we always stay true our purpose for existence. Media is supposed to enagaging, informative, and entertain. This will not change despite the technologies coming up. However new tech has allowed more players with whom you will have to compete with for customers. Your brand, content must be original and must be better than anyone else’s.”
“In media you will also have to compete much harder to retain the best talent. At first our group had two companies to compete with for talent, first decade of 2000 it was 25, now it’s 500 companies. So we must do whatever it takes to make sure you retain the best talent. Whether your medium is internet, TV, radio or print you will need talented human beings to make quality content.”
Ramakrishna Nishtala Managing Director and CEO, Vistaar Finance – Does not give out personal loans, but lends to small businesses. “Micro enterprises are the backbone of the country. In small villages tech disruption is 10-12 years away. Fintech disruption is difficult here due to mostly transaction in cash. So we decided to leverage this untapped customer base. I am skeptical about most fintech models; most financial services won’t lend to you if you don’t have an audited balance sheet showing profit.”
“Strategy is not about boardroom meetings and macroeconomic conditions but should include more specific about what customers will actually need. What does Unified Payment Interface, Aadhar info integration online and all this digital disruption mean to a small businessman in a village who will go to a local bank branch 23 times only to get a rejection?”
“How will his life change? What we are trying to do is serve this customer.” “In finances you definitely have to get in touch with customer on the ground to secure repayments on loans. It’s an inevitable in financial services. How will you get these customers to pay if you’re dealing with them over a digital portal?”
In real estate and infrastructure development:
Anita Arjundas, CEO, Mahindra Lifespace Developers Limited – The company has been active for 10 years, but been up for about 15 years. “Real estate is hard to disrupt. It’s traditional, permits and licences and process of obtaining them, corruption involved, the major players and government role has been the same for a long time.”
“We try to look at spaces to meet unmet needs like affordable housing model with high volumes and low margins (infrastructure in the range of 6-20 lakhs). This is a space government agencies and larger players are exiting and has a large void in. In addition we have established a company framework that will help us move to unestablished markets, faster.”Read the original article
The Mint-Institute for Competitiveness Strategy awards annually recognise and honour the best companies operating in India that via their strong strategy have created their own niche.
Organisations operating in India who have shown exemplary strategic acumen are recognized and assessed on a robust framework.
There is a rigorous evaluation process on the sustainability and competitiveness of their business model.
Interestingly, the winning companies not only standout in their respective industry but also equally contribute towards the prosperity of the country.
Message from Mr. Brahmanand Hegde, Executive Vice Chairman & Mr. Ramakrishna Nishtala, MD & CEO
Six years and five months after we started, we have reached this significant milestone of Rs. 1,000 Crores Portfolio. At this scale, we can take satisfaction from the fact that we have clearly transitioned from the startup to the growth phase of our Company. We had a dream of being the preferred specialised financial services provider focusing on the underserved small businesses and are firmly on the track of fulfilling it. More importantly, we are heartened to see that many more financial institutions are now viewing the small business segment as a viable one to lend to. Indeed, the Reserve Bank of India has actually created a whole new specialised category termed ‘Small Finance Bank’, wholly focused on this segment.
At Vistaar, we believe that success comes from a continuous focus on innovation and execution. These concepts are not only vital to delivering best customer satisfaction, but also to do so on a sustainable basis. For most of our Customers, borrowing from the organised sector is a first time experience. Hence, it is important for us to deliver best products and services to enhance Customer experience, and to make Vistaar a most preferred financial institution to work with as they grow.
We disbursed the first loan during June, 2010 and since then the portfolio has grown by over 300 times from Rs. 3 Crs. as of August, 2010 to Rs. 1,000 Crs. as of August, 2016 and at a healthy CAGR of ~160%. The Company has expanded to 198 Branches, 12 States and catered to more than ~1,40,000 underserved small business entrepreneurs across multiple sectors, with cumulative loan disbursements of more than Rs. 1,700 Crores, and earning the trust of our Investors, Lenders and other stakeholders along the way.
We have had both successes and failures, and every experience has taught us something new and has helped us refine our business processes. We will continue to focus on organic growth while tapping into the skills and talent of our experienced team and will work hard to develop new ideas and products or approaches to deliver the highest customer satisfaction.
Vistaar’s employees have been the greatest strength and valuable assets of the Company and have played a pivotal role in bringing the Company to this level. They follow the highest standards of ethics and always strive to deliver the best to our Customers.
We would like to extend our sincere gratitude to all our stakeholders including Customers, Investors, Lenders and to each and every Vistaarian who contributed to the Company’s growth, during this journey.
Vistaar has won the SKOCH Award for“Segment Leadership & Financial Inclusion”.
(SKOCH Award is considered to be one of the most prestigious awards in India.)
ICICI Securities & CNBC-TV18 Present Decoding Business Growth Season 2
It’s a NBFC with difference! By focusing on micro businesses this Bengaluru-base company has loaned over 800 crore rupees to over 79,000 people. Catch the promoters and industry experts as they give insights into how Vistaar Financial Services was built.
IMA Awards The Indian CFO award for Excellence in Finance in a Start-Up to Sudesh Chinchewadi.
Creating a paradigm for sustainable growth for a start-up can be among a CFO’s most complex mandates. Sudesh Chinchewadi is CFO of Vistaar Financial Services, an onward lending financial services firm focused on the MSME sector.Over the course of the past three years, Sudesh has proven that it is possible for startups to be about so much more than ‘cash burn’, and that it is possible for CFOs to lay the foundations of potential greatness in the coming decades of firms ‘just born’. Sudesh joined Vistaar during its inception stage, handholding the tiny company through its key needs of funding at one end, and expansion into India’s Tier II and III cities at the other. Whilst its potential is immense, Vistaar’s chosen area of operation – MSMEs in rural/semi-urban areas – is vulnerable to broader economic volatility at one level, and a talent crunch at another.
In the last eighteen months, Sudesh has successfully raised capital of Rs 410 crores and debt of Rs 408 crores from international and domestic investors. Today, Vistaar is backed by a sound phalanx of five private equity investors, engagement with whom forms a core of Sudesh’s responsibilities. With 189 branches across 11 states, and AUM of over Rs 750 crores, Vistaar’s success is predicated, in large part, on Sudesh’s ability to create strong governance and compliance structures, which enables successful fund-raising, and the creation of finance, internal audit and administrative functions that conform to high standards. Over 7,000 transactions a month are processed in an average span of six hours on in-house IT platforms whose framework was designed by Sudesh. Vistaar’s IT systems also enable customer loan disbursement electronically via banks, enabling both faster speed-to-market and the minimisation of customer risk. Since the firm’s inception, Sudesh has undertaken Vistaar’s capital raising of Rs 475 crores and debt of Rs 800 crores with the support of a small, in-house team, and without the expert support of an investment bank. As CFO and Company Secretary, Sudesh is also responsible for handling Board and Committee meetings, and has additionally facilitated the process of evaluation of the Board. The proof of the pudding lies in the RBI’s invitation to Vistaar to conduct capacity building programmes on MSME financing.
It’s evident that technology has changed the way we communicate, transact, analyze and even take critical business decisions. School of thoughts which believed “fundamental remains the same” is also challenged time and again; let it be around storing and retrieving data in an RDBMS or business-logic to be defined as per business principles. Today, unstructured database has revolutionized the world and cognitive development is the new mantra where data rules the business-logic. A belief that an expert sailor or navigator should have a sense of direction while exploring has been replaced by sophisticated decision making systems, systems which can guide the navigator basis the enriched “experience-data”. Trend based recommendation was supposed to be an expertise of an analyst a few decades ago. Now it is merely an algorithm defined by someone sitting on the beach of San Francisco or the greens of Bengaluru which mines all the possible data available within the company, topped with the data available publicly and puts the recommendation on a platter. Here decision makers can choose the relevant one which marries their business objectives.
Technology across industries has changed the conventional way of doing business. In today’s world an IT giant is one of the largest garment store, a leading taxi company, a real-estate company and the list is end-less. It is not far away that an IT giant would target to be the largest bank, an insurer and a financial services company of the globe. In this era of supersonic and disruptive changes, CIO of brick and mortar financial services companies are no more expected to just enable the business by providing predictable systems with high performance. CIO in today’s world has a much larger responsibility to become a catalyst for transformational change. A change which transforms a company known for arranging funds and giving loans, to become a platform for customers as well as lenders to feel safe and insured while doing business. The revolution we are observing in Banking, Financial Services and Insurance is just the beginning. A next step in the journey of BFSI is even more challenging for CIOs, who may get caught in fulfilling the varied demands of business users. Reason is simple: Everyday, there are hundreds of new solutions built by software companies where different ones catch the attention of different business users based on the context of their business objectives, challenges or needs. In this situation expectation form a CIO would be to get all these applications or software evaluated and aligned with the technology architecture and roadmap, which may create panic and stress. Today sales is looking at technology to provide near accurate predictive analytics around an individual’s propensity to opt for a specific product, and customer stickiness score for upsell-cross sell opportunity. On the other hand operations is looking at complete automation of processes to crash the cost of operations, let it be using sophisticated workflows, collaboration & communication tools, cognitive solutions for customer servicing and ideally, a combination of all. Similarly risk and compliance will have their objectives with obvious reasons.
To meet these expectations of “TECH AWARE CEOs” the CIOs today need to be thorough in technology, not just aware but embedded. CIO needs to be an integral part of the executive body of the company to co-relate all visions and carve the technology strategy and even influence the vision in light of newer possibilities due to recent technology innovations.
Decision making is the key. If a CIO lingers on a decision to embrace or reject a solution, there will be twenty more solutions available to evaluate in the same space leading to delay and dilemma. Hence, while there are numerous solutions with heterogeneous underlying technologies, mere superficial knowledge of technology, products and platforms pertaining to their business strategy can be disastrous.
Gone are the days when financial services companies had an MIS team to cater to their data requirement. Companies with this mindset will sooner or later either shrink their business and diminish OR will lose big time on opportunities by becoming a late entrant in the FinTech world.
With the dynamic evolution of newer mobility solutions and technology platforms, there is no single pill to success. CIOs of companies need to collaborate more than ever with CEOs and move in all directions, let it be Mobility for ease of use and customer stickiness, digital marketing to expand business footprint, business process management for shooting operational efficiency or business analytics to take turn-around decisions. Mantra is: All this should be achieved within the constraints of cost. With a flurry of start-ups in India, this is achievable as long as technologists in company are “Technology-Aware” and also “Empowered”.
A CIO constantly needs to keep one eye on transformational changes, as that’s no more just a key to success but an essential element to sustain in business, or else competition will eat the pie in no time.
Online business-to-business (B2B) marketplaces have found easy business in financial inclusion for small and medium businesses (SMBs) which struggle for capital from banks. Tie-ups with Non-Banking Financial Institutions (NBFCs) and lending platforms work both ways for the online B2B platforms -ensuring a behavioural change in SMBs to shop online for their sourcing needs by extending credit facilities, as well as arming the marketplaces with data on SMBs to create a significant creditscoring mechanism for the small merchants.
“Six months back, the revenue from sharing data on SMBs looking for loans was zero. Currently , it forms 20% of our Gross Merchandise Value,“ says R Narayan, founder of Power2SME which recently raised an undisclosed round from existing investors Accel Partners, Kalaari Capital and on-boarded Nandan Nilekani as a strategic investor. The company will clock in a GMV of ` . 350 crore for the financial year ending March 2016.
While marketplaces make less than 1% of the transacted amount in commissions from sharing the credit scores for businesses with the lending institutions, the practice for extending credit to SMBs for their buying cycle mimics the loans extended by suppliers offline.
The potential of the B2B market pegged to grow to $300 billion by 2020 has caught the attention of financial institutions who are trying to bridge the gap which banks find too expen sive to fill. “The availability of data from marketplace, if done properly , cuts down our cycle to process the lo an from an average of 25 days to 8 days,“ says Ramakrishna Nishtala, COO of Vistaar Financial Services which works with Power2SME and other B2B marketplaces.
The Hindu, one of India’s leading newspaper reported on the fresh capital funding infused into brand Vistaar. Pradeesh Chandran writes:
City-based MSME-focused financial services provider Vistaar Financial Services Pvt. Ltd. raised around Rs.250 crore in an internal round of funding. The Series D funding was led by existing investor WestBridge Capital along with Elevar Equity and Omidyar Network. Saama Capital and Lok Capital are the other existing investors in the company.
With the fresh capital infusion, the Bengaluru-based financial services start-up has raised around Rs.475 crore till date. The company will use the fresh funds to enter into new States and also offer new products. The investment will fund the expansion of its network to over 250 branches, including in five new States across the country, to reach a projected portfolio of over Rs.2,500 crore over the next three years. It will also invest in technology enabled credit processing and workflow management, and roll out customised financial products to cater to its target segment’s needs.
Speaking on the investment, Brahmanand Hegde, co-Founder and CEO, Vistaar Finance said, “Having deeply understood the needs of more than 1,00,000 customers across seven States and 10 sectors over the last five years, we are well positioned to expand to newer territories and to offer a wider range of financial products that will help our customers expand their businesses quickly.”
In early 2015, on its 5th anniversary, Vistaar undertook a mammoth task of rebranding the company. Extensive research on ground with our customers indicated that Vistaar is perceived as proactive company, creating opportunities that enable transformation. In terms of solidifying this valuable goodwill among our customers and to align with the future ambition of the company, we began the journey of rebranding.
It began with a new logo that captures the rock-solid and steady input from Vistaar and the consequent leapfrog impact on the customer as a result. Post that our website, our office interiors, signages and all other brand assets have been refreshed to build consistency across the board.
Over the next three years Vistaar will transition to the high growth stage. More importantly, the number of Vistaarians will go up from current 1400 to over 3000. Having served close to 70,000 customers and still counting, Vistaar is a collective brand owned by our customers, employees, investors and all well-wishers. Our brand theme captures it succinctly – “Forward Together”
The new brand could not have been released at a better time. It was received with much enthusiasm by our Vistaarians and the board is already unleashing fresh energy across the value chain.
Vistaar Financial Services Private Limited (hereinafter referred to as ‘The Company’) has been made aware that individuals purporting to act as, or on The company’s behalf and using The company’s name (either in full as detailed in the beginning of this disclaimer or in various forms with some or more similarities) have approached prospective loan speakers in the general public offering loans. These approaches are intended to defraud individuals and damage the reputation of the Company. Any communication that is sent from The Company is either sent from our registered domain name @vistaarfinace.com or through formal correspondence. Under no circumstances should nay money be transferred to any individual or entity. Without having first conducted due diligence on that recipient of those funds.
If you receive what you believe is an email from any individual purporting to represent The Company or are approached by any individual who is unable to demonstrate that he is a legitimate employee of The Company, please call us at 080 49373037 or forward doubtful email communications to us at firstname.lastname@example.org, forwarding the email or letter, and alternatively report this to your local police Vistaar Financial Services Private Limited does not tolerate such frauds/criminal activity in any form and shall not be considered liable for any loss or inconvenience resulting from communication or business transactions with unauthorize individuals or entities.