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Hello and welcome to this week's edition of The Pattern, a newsletter where I try to make sense of all the big and small rumblings in the Indian FinTech space. Let’s get started!
As India continues to log an increase in COVID cases, the government is locked in a battle with the World Health Organization (WHO) who say that between January 2020 and December 2021, the country saw 4.7 million ‘excess’ COVID deaths - ten times more than the official figures.
According to India’s COVID working group, the WHO’s estimate doesn’t stand on any ‘logic or fact’.
To me, this is a classic case of missing the point. This isn’t the first time there have been reports of India undercounting COVID deaths - but either way, the truth is, lakhs died, and those who survived were pushed into poverty. It is estimated that nearly 230 million additional individuals fell below the national minimum wage poverty line due to the pandemic.
In a country that already has one of the highest levels of out of pocket healthcare spending in the world, one can only imagine the financial damage this once-in-a-lifetime healthcare catastrophe has caused.
One can’t help but wonder how access to flexible and affordable financing options could have - at least in part - mitigated this financial distress. In this piece, my colleague Shamolie explores how credit options such as buy now, pay layer (BNPL) can improve access to healthcare for patients while ensuring hospital cash flows don’t suffer.
(Also read: The case for Embedded Finance in healthcare)
In other big news coming in from Kerala’s FinTech sector, Open Financial Technologies has become India’s hundredth unicorn (and Kerala’s first!). The neobanking platform for SMEs offers digital bank accounts, including a current account that comes with tools for bookkeeping, invoices, and accessing credit.
Clearly, SMEs continue to be the favorite target audience for FinTech startups aimed at financial inclusion. We’ve written extensively about alternate financing options for the MSE sector in India, and how embedding finance in MSME focused platforms could improve their access to credit - take a look here.
Going from one underserved sector to another, we’ve also been keeping an eye on developments in the agricultural sector, exploring the ways in which technology can bridge gaps in credit access and improve agricultural supply chains. Late last week, news trickled in about the National Bank for Agriculture and Rural Development’s (NABARD) plans to formulate a Farmer Distress Index (FDI) to identify and support farmers in need.
The index will track and collate high frequency data on weather conditions, climatic conditions, debt burden, and agricultural commodities to get a clear picture into agrarian distress and recommend the relevant remedies - be it additional credit or loan waivers.
My colleague Aparna recently wrote this interesting piece which takes this a step further - advocating for the inclusion of ‘social capital’ when assessing and offering agricultural financing. Her recommendations include a Net Promoter Score of sorts for farmers as well as merchant approval in risk assessment - you don’t want to miss this one.
That’s all from me for now - and as always, here’s my list of must-reads for the week:
The latest on the LIC IPO
Moody’s analytics adding climate risk assessment into its credit lifecycle management solution
Another perspective to India’s unicorn boom
Exploring RBI’s lending rate hike
See you next week! Cheers, Mayank