Megan Peterson

Vikas Raj

Paarul Dudeja

Amee Parbhoo

Brazil

East Asia and Pacific

India

Indonesia

Kenya

Latin America and The Caribbean

Mexico

Middle East and North Africa

Nigeria

North America

Philippines

South Asia

Sub-Saharan Africa

United Arab Emirates

United States

Challenges and Crises

Credit

Digital Financial Services

Digital Payments

Enabling Environment

Fintech

Fintechs

Governance

Human Centered Design

Impact Investing

Insurance

Insurtech

MSME/SME Finance

Savings

Small Business Owners

Underserved Groups

Financial Capability

Financial Health

Personal Financial Management

Alternative Data

Consumer Protection

Tech-Touch Balance

Responsible Digital Finance

Agritech

Smallholder Farmers

Report

Article

Press Release

SmartCoin

India is a global leader in financial inclusion. For over a decade, Accion has worked with and learned from India’s innovators, investors, and policymakers to expand economic opportunity for its people and businesses.

The majority of Kenyans have mobile money accounts; their activity demonstrates digital financial services’ potential. Accion helps Kenyan innovators harness emerging technologies to create new financial services.

Most of Mexico’s people lack access to a formal bank account. Accion has worked in Mexico for decades to create a thriving and competitive financial sector that embraces innovation and protects its clients.

Though Nigeria’s government has set ambitious goals for financial inclusion, the majority of its people lack a formal bank account. Accion has worked in the country since 2007 to expand access to financial services.

This report is supported by the <a href="https://mastercardfdn.org/">Mastercard Foundation.</a>

<hr />

<h2>Executive Summary</h2>
The COVID-19 pandemic has altered the realities for inclusive fintech startups and the financially underserved customers they serve. Coping with lockdowns and social distancing, low-income people around the world are now turning to fintechs to save money, purchase insurance, or transact remotely. But fintechs are facing their own challenges, including unpredictable funding, a volatile investment market, and a severe economic downturn.

<a href="https://www.kpmg.us/content/dam/global/pdfs/2020/pulse-of-fintech-h1-2020.pdf" target="_blank" rel="noopener noreferrer">Investment funds seized up</a> soon after the pandemic began, and while <a href="https://www.cbinsights.com/research/coronavirus-fintech-financing-impact/" target="_blank" rel="noopener noreferrer">funding has </a><a href="https://www.cbinsights.com/research/coronavirus-fintech-financing-impact/" target="_blank" rel="noopener noreferrer">started flowing again</a>, venture capital may be less reliable and predictable for the foreseeable future. Startups need to focus on extending their financial runways while simultaneously finding ways to grow their businesses.

In the past, many fintech startups have followed a Silicon Valley model of chasing growth through customer acquisition. But customer acquisition can be costly: acquiring a new customer is anywhere from <a href="https://hbr.org/2014/10/the-value-of-keeping-the-right-customers" target="_blank" rel="noopener noreferrer">five to 25 times more expensive</a> than retaining an existing one (without considering opportunities for cross and upsell). Fintech startups should consider alternative pathways to growth, namely via increased usage, uptake, and earnings among existing clients.

This shift to increasing value for users is extremely relevant in the era of COVID-19. Lockdowns and sharp decreases in demand for goods and services have left many families and small businesses extremely vulnerable. These people need more and new financial service innovations to rebuild their safety nets and livelihoods as their savings and inventories have been depleted. Increasing value for these users means finding new and better ways to meet their needs via meaningful, customer-centric value propositions.

This paper features case studies on fintech startups around the world that have successfully grown their value propositions. These startups, all portfolio companies of Accion Venture Lab, illustrate three core strategies for growing value among existing users:
<ol>
 	<li>Motivate increased usage of existing products,</li>
 	<li>Broaden the suite of products specific to users’ needs, and</li>
 	<li>Create a graduation pathway to reward retention.</li>
</ol>
The first strategy seeks to improve the user experience through features that encourage more frequent or in-depth use of products and services. The second strategy requires studying and applying users’ needs to craft a suite of products that address their particular pain points and fulfill more of their needs. Finally, the third strategy boosts value for users by sweetening and improving their terms over time so that they stay engaged. To execute each of these strategies, startups must stay closely attuned to users’ needs and experiences, and apply that knowledge to develop products that meet those needs.

<img class="wp-image-22791 aligncenter" src="https://content.accion.org/wp-content/uploads/2020/11/AVL-MF-paper-graphic-1.png" alt="How fintechs can build value for existing users infographic" width="800" height="420" />

Win from within: How fintech startups can grow by building value for existing users

Getting a loan has traditionally been a hefty process, including cumbersome paperwork, multiple visits to a bank branch, and credit checks that can disqualify applicants without an extensive formal credit history. This process isn’t useful for people who just need help making ends meet or paying for small everyday expenses, and they often end up going without the funds they need or turning to predatory lenders.

Accion portfolio company <a href="https://www.smartcoin.co.in/" target="_blank" rel="noopener noreferrer">SmartCoin</a> aims to help more people get the funds they need quickly and securely using a mobile app. Their platform seamlessly empowers customers to build their financial health and their credit score throughout the lending process. We talked to a few of SmartCoin’s customers who shared how SmartCoin has benefitted them.

<img class="size-large wp-image-16724 alignnone" src="https://content.accion.org/wp-content/uploads/2019/01/Lower-Res-145-of-236-1-1024x669.jpg" alt="Prashanth B S" width="1024" height="669" />

Coffee? Tea? Biscuits? The small store that Prashanth B S runs in Bengaluru has everything you need for an afternoon pick-me-up. He’s been managing the shop for eight years, but growing his business is difficult. When he decided to take out a loan to boost his business, he was surprised by how straightforward SmartCoin’s process was. He applied online, uploaded his documents, received a quick call to discuss details, and within a few days, he had the funding he requested. As his shop thrives, he’s interested in opening a second location in a different part of town, and he’s confident SmartCoin will be there for him as he expands.

<img class="size-large wp-image-16726 alignnone" src="https://content.accion.org/wp-content/uploads/2019/01/Lower-Res-143-of-236-1-1024x683.jpg" alt="Janani Priya " width="1024" height="683" />

Janani Priya found SmartCoin in the Google Play store, and she downloaded it to help her pay for travel expenses and other costs that crop up at the end of the month. “It’s quite easy since it’s tech-based,” she says. In addition to appreciating how straightforward using the app is, she liked that she could contact someone at SmartCoin and get help if she needed. It made it easier for her to trust the company with her finances. While she hopes to one day not need loans for everyday expenses, Janani’s happy to know she can count on SmartCoin if she ever needs emergency funds.

<img class="size-large wp-image-16727 alignnone" src="https://content.accion.org/wp-content/uploads/2019/01/Lower-Res-128-of-236-1024x671.jpg" alt="Manjunath S" width="1024" height="671" />

Manjunath S just earned an MBA in finance, and now he’s set to take on the world. As he gets ready to transition to a new job, he needs a little extra money to help with day-to-day expenses, from household needs to gas costs to dinner money. He found that banks would only offer large loans, not small loans to cover miscellaneous costs and make ends meet. SmartCoin helped him get the amount of money he needed in just a few steps. “Seriously, this app is a tremendous resource,” he says. Someday Manjunath hopes to be able to start his own business, and knowing he can get funding when he needs it puts him in an excellent position to pursue his entrepreneurial dreams.

This mobile app helps people in India manage everyday expenses

Investing in <a href="https://www.smartcoin.co.in/">SmartCoin</a> was an opportunity for us to <a href="https://www.accion.org/smartcoin-brings-financial-health-low-income-indians">help fund tech</a> that’s enabling a faster way for people to get the funds they need to manage their everyday cash flow imbalances. When we visited SmartCoin’s office in Bengaluru, we talked to some of the employees about what it’s like to work for an innovative and inclusive fintech company.

With more than eight years of experience in data analytics, Mayank Aggarwal is confident working on the analytics team and processing the vast amounts of data that go into SmartCoin’s alternative credit assessment. “Anything and everything related to data and numbers is all taken care of by my team members and me,” he says. Mayank appreciates being able to turn data into insights about customers so they can get a loan. “That I’m able to contribute in my way to this cause of helping someone in need is quite satisfying,” he says.

SmartCoin’s proprietary score takes into account the borrower’s financial profile, as well as alternative data from social networks and behavior data. From a customer’s initial contact with SmartCoin to the loan disbursement, the whole process is digital, and people like Mayank on the back-end help the process run smoothly for customers using the app.

Even in the most high-tech loan process, sometimes customers need a human touch. That’s where Piyush Pandey comes in. He leads the customer support team to make sure that anytime a customer has an issue, SmartCoin can resolve it quickly and effectively. Customers can contact support through chat, email, or phone, and Piyush’s team will make sure they get the help they need in whichever form is convenient for them.

[caption id="attachment_16718" align="alignleft" width="501"]<img class="wp-image-16718" src="https://content.accion.org/wp-content/uploads/2019/01/Lower-Res-151-of-236-1-1024x663.jpg" alt="Piyush Pandey" width="501" height="324" /> <em>Even in the most high-tech loan process, sometimes customers need a human touch. Piyush leads SmartCoin’s customer support team.</em>[/caption]

Convenience is a significant factor in SmartCoin’s success. As Piyush pointed out to us, a vast number of people in India already have smartphones, so having a financial tool they can access from an app makes it easy to use. It’s a smart business strategy, but it’s also about helping people, Mayank emphasizes. People often need loans quickly and only need small amounts for basic needs, but banks either won’t loan to them or require too much time and documentation to process a loan. Many of the customers who come to SmartCoin are students or other people who just need a few necessities, especially at the end of the month. SmartCoin can get those funds to them quickly, and people in need don’t have to turn to predatory lenders.

SmartCoin even goes a step farther by building financial health tools into the app so that customers can build their credit profiles and learn healthy financial habits as they repay their loans. This gives borrowers a strong foundation for interacting with financial services in the future.

In addition to the job satisfaction that comes from having a career that makes a social impact, Mayank and Piyush both appreciate the benefits that come with working at a growing startup. Having worked at startups before, Mayank was drawn to the innovative and fast-paced culture of the industry and jumped at the chance to work at SmartCoin. For Piyush, SmartCoin’s rapid growth has been a springboard for his career. In just a year, he has been able to move up the ladder and take a leadership position on his team. “It’s quite a good opportunity for me,” says Piyush.

Combining the experience of working at a technology-focused startup with a mission to do good is an opportunity that neither Mayank or Piyush takes for granted. As Mayank told us, recalling why he decided to work at SmartCoin: “They were doing something really unique and very helpful for society. I decided that I wanted to be a part of it.”

What’s it like to work in a startup transforming finance in India?

Last month, I had the privilege of chairing <a href="https://www.money2020.com/">Money20/20</a>’s first <a href="https://money2020us2018.sched.com/event/Fvl0/fintech-for-social-good-track-chairpersons-welcome">Fintech for Social Good track</a> <a href="https://vimeo.com/301069957">(video of my presentation can be found here)</a>. It was encouraging to see that the financial industry’s top thought leaders and disruptors recognize the crucial role fintech can play in building a better world. Currently, there are 3 billion people globally who have little to no access to financial tools that could improve their lives. But the reach of technology is outpacing the reach of financial services — mobile and internet access are streaming into communities that were previously left behind. Inclusive fintech can make a massive difference.

As I listened to speakers from every part of the industry, I was struck once again by how invaluable innovators are for making sure tech can reach its potential for social good. If technology is the key to unlocking financial inclusion, innovators are the ones with the power to turn the key. For fintech to make a real impact, we need innovators who are taking technology and actually making it work for low-income individuals and small businesses.
<h2><strong>Who will drive the fintech revolution?
</strong></h2>
<img class="alignleft size-large wp-image-16299" src="https://content.accion.org/wp-content/uploads/2018/11/m2020_platform_poll-1024x614.jpg" alt="Poll: Who will make the greatest impact in reaching the world's three billion financially underserved over the next 5 years?" width="1024" height="614" />

Innovators in inclusive fintech come in various forms. I took the opportunity to poll the Money20/20 audience to find out which players people expect to drive social impact.  I wasn’t surprised to see large tech platforms come out on top. One overriding theme throughout the day was that large tech platforms are best positioned to drive change in the industry — they have the infrastructure, access point, data, and strong brands on their side. We’ve already seen examples of this, such as how <a href="https://www.cnbc.com/2017/10/08/china-is-living-the-future-of-mobile-pay-right-now.html">WeChat and Ant have helped drive mobile money usage in China</a>. As the massive global tech platforms continue to establish their role as key — if not primary — players in the financial services space, I expect we will need to talk a lot more about how issues like privacy and data ownership inform the decisions those companies make. <a href="https://www.linkedin.com/pulse/future-money-devin-banerjee-cfa/">With great power comes great responsibility</a>.

Even as tech giants take the spotlight, it’s heartening to see that people surveyed still have high hopes for entrepreneurs and financial institutions to leverage fintech for social change. At <a href="https://www.accion.org/how-we-work/invest/accion-venture-lab">Accion Venture Lab</a>, we’ve invested in nearly 40 early-stage fintech startups, so I may be biased when it comes to entrepreneurs and the power they have to make an impact — I’ve seen firsthand <a href="https://www.accion.org/series/fintech-founders/">what talented entrepreneurs can accomplish</a>. But I’ve also seen how critical it is for these entrepreneurs to<a href="https://www.accion.org/more-proof-that-fintechs-and-traditional-financial-institutions-work-better-together/"> partner with established banks</a>. I have no doubt that both parties will play a crucial role in building a better future for the world’s financially underserved.

When it comes down to it, it’s going to be a group effort to drive real social change. Disrupting and implementing fintech solutions takes a supportive enabling environment as well as innovators working in the trenches. To scale at a level to reach the vast underserved population, the entrepreneurs behind fintech solutions need capital from investors, but they also need a regulatory environment that welcomes innovation, and they need large players like banks, tech platforms, and payment companies as partners, infrastructure providers, and customers.
<h2><strong>What tech will make inclusion possible?</strong></h2>
<img class="alignleft size-large wp-image-16300" src="https://content.accion.org/wp-content/uploads/2018/11/m2020_tech_poll-1024x600.jpg" alt="Poll: What are of innovation will be the biggest driver for reaching the world's three billion financially underserved over the next 5 year?" width="1024" height="600" />

I also polled the audience about what standout tech innovation has the potential to really drive service to the world’s underserved, and it was clear that there’s still optimism that mobile money can provide the infrastructure for inclusion. We’ve certainly seen this ring true for the companies we work with. In Kenya, Apollo Agriculture <a href="https://www.accion.org/fintech-startup-revolutionizing-kenyan-agriculture">uses satellite data to provide farmers</a> with the inputs that they need to succeed, and their clients can easily pay for the service using mPesa. In India, <a href="https://www.accion.org/smartcoin-brings-financial-health-low-income-indians">Smartcoin operates their whole individual lending process</a> within their smartphone app, including collecting payments digitally using <a href="https://www.accion.org/upi-changing-financial-inclusion-india">UPI</a>.

Digital identity’s second-place finish is well-deserved. More than 1 billion people have no formal identity, and a lack of identification is a crucial factor that has prevented too many people from accessing financial services, so <a href="https://www.accion.org/digital-identity-and-financial-inclusion">digital identity opens new avenues</a> to allow people to prove who they are and receive financial services they were previously denied.

Perhaps one of the most exciting parts of the fintech revolution that’s currently underway is that there is still new tech waiting to be developed and new innovators ready to enter the ring and push it forward. We’ll continue to watch for the next innovations that expand access, improve quality, and ensure affordability of financial services for the underserved at scale.

Fintech players and platforms are driving real social good

Deepak Kumar takes his job managing a guest house in Bengaluru seriously, keeping a close eye on the grounds and making sure every aspect is well-maintained. He rents a house nearby where he lives with his wife and their three-year-old child. He loves that working at the inn keeps him close to his family and allows him to take care of them.

When he’s not working at the guest house, Deepak sometimes drives a cab to bring in extra money to support his family. When he needed money to help with fuel costs and other expenses, he went to a bank for a loan. But the bank told him that it would be a 6-month wait for him to access the funds he needed.

[caption id="" align="alignnone" width="600"]<img src="https://content.accion.org/wp-content/uploads/2018/08/SmartCoin-Day-4-10-of-58.jpg" alt="" width="600" height="450" /> Deepak writes in a notebook while at his job managing a guest house[/caption]

Then he found Accion portfolio partner <a href="https://www.smartcoin.co.in/">SmartCoin</a>. SmartCoin uses <a href="http://www.accion.org/smartcoin-brings-financial-health-low-income-indians/">a mobile app to provide easy access to financial services</a>. Using an alternative credit assessment aided by data science and machine learning, they’re able to evaluate applications and disperse funds quickly. With clear payment amounts, timelines, and reminders, the platform is designed to nudge customers towards prudent borrowing and help them understand financial products better.

Instead of six months, Deepak’s wait time was reduced to a few hours, and he can track his repayment on his phone. He now has everything he needs to keep his cab — and his life — running smoothly.

Deepak couldn’t wait 6 months for gas money

<p id="b7a1" class="graf graf--p graf-after--figure">The majority of adults in India have little to no formal credit history. In a population of 1.3 billion, that’s a lot of people who have trouble accessing credit. If these individuals need a little extra money to pay hospital or education bills, make home repairs, or expand their business, they have to depend on personal networks and local money lenders, who can be unreliable or predatory. Given the vast credit gap, India has seen a growth in digital consumer lending startups. However, for many startups, the emphasis so far has been on addressing the needs of the salaried individuals or college students or promoting consumer purchasing power. The low-income population working within the informal economy or those struggling with their everyday cash flow imbalances continue to be left out and remain prone to financial shocks.</p>
<p id="c783" class="graf graf--p graf-after--p">Fortunately, technology is helping to reach these people without a formal credit history in a new way. India already has 300 million smartphone users, and that number grows every day as affordable phones and data plans spread connectivity even into rural areas. Additionally, the government and its partners have developed a set of digital tools, collectively referred to as <a class="markup--anchor markup--p-anchor" href="https://medium.com/accion/the-game-changing-innovation-that-could-bring-financial-services-to-millions-in-india-9679df134601" target="_blank" rel="noopener noreferrer">IndiaStack</a>, which allows almost every Indian to be identified and to transact digitally.</p>
<p id="39b6" class="graf graf--p graf-after--p"><a class="markup--anchor markup--p-anchor" href="http://www.accion.org/smartcoin-raises-2-million-pre-series-a-funding-from-international-investors/" target="_blank" rel="nofollow noopener noreferrer">Accion Venture Lab’s recent investment, SmartCoin,</a> leverages the unique set of circumstances in India to provide short-term, unsecured loans via smartphones — primarily to previously underserved low-income Indians. These loans are often used for medical and other emergencies, meeting cash-flow imbalances, and work-related reasons. SmartCoin not only offers loans but proactively educates customers about maintaining a good credit score and positively reinforces good borrower behavior. The team is committed to being a responsible consumer lender focusing on affordable loans, fair underwriting, and data security.</p>
<p id="649b" class="graf graf--p graf-after--p">Numerous startups are looking to tackle consumer lending in India, but we’re especially excited about SmartCoin thanks to their unique approach to reaching the underserved:</p>
<p id="0b9c" class="graf graf--p graf-after--p"><strong class="markup--strong markup--p-strong">Completely tech-enabled approach to better understand and serve their target customers</strong>: Once a customer downloads the SmartCoin application on their Android mobile phone, they use Aadhaar to establish their identity. Approved customers receive funding directly to their bank accounts within a few hours. Low-income customers may lack formal documentation and often have limited or no credit history. The tech-enabled approach bypasses these traditional barriers and brings access to debt to those previously underserved or unserved customers.</p>
<p id="faf1" class="graf graf--p graf-after--p"><strong class="markup--strong markup--p-strong">Engagement-based user experience: </strong>By overlaying innovative customer engagement tools on top of its mobile-only platform and machine-learning algorithms, SmartCoin can interact with users in a frictionless way to encourage responsible borrowing behaviors. Platform features, such as rewards attained upon achieving specific repayment goals, allow SmartCoin to maintain customer engagement through their borrowing journey.</p>
<p id="db90" class="graf graf--p graf-after--p"><strong class="markup--strong markup--p-strong">Transparency and encouraging prudent borrowing behaviors in customers: </strong>SmartCoin’s easy-to-use interface provides its customers with clear payment amounts and timelines, followed by reminders on timely payments. Its platform is designed to nudge and influence customers towards prudent borrowing and help them understand in a frictionless manner about financial products. SmartCoin is helping these customers in building their credit profiles and healthy financial habits to set a strong foundation for interacting with financial services.</p>
<p id="04d2" class="graf graf--p graf-after--p">Venture Lab can’t wait to work with SmartCoin’s founding team, which brings together entrepreneurs from the technology and finance sectors. Co-founder and CEO, Rohit Garg, has worked in various finance roles at Nomura, Deutsche Bank and Morgan Stanley focusing on fixed income strategies and risk management. The three other co-founders, Vinay Singh, Amit Chandel, and Jayant Upadhyay, are engineers and have complementary backgrounds in analytics, digital marketing, and development of front and backend systems. We think this mix of banking and technological expertise positions this team perfectly to take on the challenge of access to high-quality, affordable credit in India.</p>
<p id="d408" class="graf graf--p graf-after--p">We’ve seen the potential of nano-credit models that leverage phone-based usage and bank data for improving financial access in markets like East Africa. We are excited to support a similar model in India, where a vast portion of the population lacks access to formal credit. At Venture Lab, we are also intrigued by businesses like this that can drive active engagement with customers to promote financial health, as shown by our partnerships with <a class="markup--anchor markup--p-anchor" href="https://www.revolutioncredit.com/" target="_blank" rel="nofollow noopener noreferrer">RevolutionCredit</a> in the United States and <a class="markup--anchor markup--p-anchor" href="https://www.destacame.cl/" target="_blank" rel="nofollow noopener noreferrer">Destacame</a> in Mexico and Chile. We now welcome the opportunity to improve our understanding of engagement-driven products and their potential in providing access to debt and promoting responsible borrowing behaviors on a digital-only platform.</p>
<p id="5395" class="graf graf--p graf-after--p">We’re proud to partner with SmartCoin as they continue their journey, reaching people who have been left behind with the financial tools that they can use to build better lives.</p>
<p id="2eda" class="graf graf--p graf-after--p graf--trailing"><a class="markup--anchor markup--p-anchor" href="http://emarketing.accion.org/page/s/get-updates" target="_blank" rel="nofollow noopener noreferrer"><em class="markup--em markup--p-em">Subscribe to our newsletter</em></a><em class="markup--em markup--p-em"> to receive stories, podcasts, updates on new Accion initiatives, and more.</em></p>

Not just loans, SmartCoin brings financial health to low-income Indians

<div id="block-system-main" class="block block-system">
<div class="content">
<div class="content-node">
<p style="text-align: center">•<em>Well-reputed Shanghai-headquartered VC leads the round with Accion Venture Lab co-investing</em></p>
<p style="text-align: center"><em>• Accion Venture Lab is the seed investment initiative of global financial inclusion leader Accion</em></p>
<p style="text-align: center"><em>• Raising investment from top investors from two of the biggest markets in the world, to strengthen SmartCoin’s domestic and international expansion plans</em></p>
<p style="text-align: center"><em>• ISME ACE and existing investor Unicorn India Ventures also participated in the round</em></p>
<em>Mumbai, March 28, 2018</em>-  Bangalore-based fintech startup, SmartCoin, has raised $2 million in pre-Series A funding from a top Chinese VC fund and Accion Venture Lab. Unicorn India Ventures, which is an existing investor in the company, also participated in the round, along with ISME ACE, a leading fintech accelerator.

SmartCoin lends small-to-mid-sized ticket loans to mobile users after building a SmartCoin credit score, which is backed by data science and machine learning. The company raised seed funding from Unicorn India Ventures last year.

Rohit Garg, Co-founder and CEO, SmartCoin, says, “We have seen a sharp uptick in growth over the past year and have successfully disbursed over 50,000 micro loans. More importantly, we have been able to open credit access for people who were not able to tap the formal channels and were otherwise dependent on personal networks and loan sharks. With this round, we expect to grow the momentum and further scale 10X over the next 6–12 months. Having specialists as investors, who are passionate about micro-lending, on board will only help us cover more ground not only in India but globally too.”

Accion Venture Lab is the world’s leading seed-stage investor in fintech for the underserved. Accion Venture Lab invests capital in, and provides support to, innovative fintech startups that increase access to, improve the quality of, or reduce the cost of financial services for the underserved at scale.

“SmartCoin illustrates how innovative lenders are leveraging data, mobile access, and India’s digital infrastructure to extend loan access for the financially underserved,” says Michael Schlein, President and CEO of Accion. Paarul Dudeja, Director of Investments for India, Accion Venture Lab adds, “SmartCoin exemplifies what we at Accion Venture Lab look for in a partner, with its strong entrepreneurial team that is driven by the mission of providing increased access to credit through nano lending to the underserved by using an all-digital platform to expand its reach.”

SmartCoin was started by IIT/IIM alumnus Rohit Garg, Amit Chandel, Vinay Kumar Singh, and Jayant Upadhyay in 2016, who comes with around a decade of work experience across finance and technology domains.

“We invested in SmartCoin last year as we saw an immense potential in the business. Over the course of the year, we have realized the ability of the team to scale its operations rapidly given the right ammunition. Thus, being able to raise top dollar from two of the world’s largest markets is a testament to our belief in the team,” says Archana Priyadarshini, Partner, Unicorn India Ventures. “We expect the Company to continue its growth trajectory and at Unicorn India, we believe in backing potential winners. Thus, we decided to participate in this round,” she adds.

The Company is already working with several partners for disbursing loans and has achieved strong organic growth. SmartCoin plans to further invest in technology and grow its team as it continues with its expansion plans, with an aim to cover a much larger customer base.
<p style="text-align: center"><strong>###</strong></p>
<strong>About SmartCoin</strong>

SmartCoin is a consumer micro-lending platform focused on the vast underserved middle/lower-income segments in India. We are aiming to bring greater financial inclusion, as a significant population in India does not have sufficient credit histories, and thus no access to credit. Our proprietary credit underwriting models are based on machine learning and advanced data science over vast amount of traditional and non-traditional variables. Our team comprises of IIT/IIM graduates with senior level experience in various investment banks and tech start-ups, and a passion to use technology to solve fundamental consumer problems.

<strong>About Accion</strong>

Accion is a global nonprofit committed to creating a financially inclusive world, with a pioneering legacy in microfinance and fintech impact investing. We catalyze financial service providers to deliver high-quality, affordable solutions at scale for the three billion people who are left out of – or poorly served by – the financial sector. For more than 50 years, Accion has helped tens of millions of people through its work with more than 90 partners in 40 countries. More at<a href="http://www.accion.org">http://www.accion.org</a>.

<strong>About ISME ACE</strong>

ISME ACE is a Mumbai-based, leading FinTech focused accelerator. ISME ACE intends to create Multi-nodal ecosystem servicing all core and ancillary needs of next FinTech Unicorns.
ISME ACE operates in a cohort based system and makes typical investments of $100-200k in start-ups, along with providing a whole support ecosystem consisting of legal services, accounting services, Technology advisory, Cloud credits and co-working spaces around the country to its start-ups through various ecosystem partners. The ISME ACE team embeds itself and works closely with the investee start-ups to accelerate their progress.
For its first cohort, the accelerator had selected 6 companies namely Artoo, Cashcow, Moneytor, Open Technologies, SmartCoin and Trendlyne.
The accelerator is currently accepting applications for its next cohort. More at<a href="http://www.ismeace.com">www.ismeace.com</a>

<strong>About Unicorn Ventures</strong>

Unicorn India Ventures is a Mumbai ¬based VC fund that invests in early stage startups working on business ideas spanning sectors like consumer, enterprise, healthcare and deep technology domains.

Unicorn India Ventures was started in 2015 by Anil Joshi and Bhaskar Majumdar. The Fund invests solely or co-invests with another fund or institution in a startup with an innovative business idea, which can solve a real life problem. The deal size will vary from $1,00,000 to $2 million and should meet the following criteria:

• Ability to scale up rapidly in terms of revenues and customer adoption
• Capital efficient business model
• Startup should be backed by a committed and a passionate entrepreneur
• Business should have the potential to address the global market.
• Unicorn has done the first close of their maiden fund.

The Fund has already announced investments in 15 startups like GenRobotic, SectorQube, Perfectfit, Boxx.ai, Sequretek, SmartCoin, GrabonRent, Inc42, NeuroEquilibrium, VLCC VanityCube, Roder, and Pharmarack.

The Fund recently announced its foray into venture debt by launching Rs 600 crore venture debt fund.

</div>
</div>
</div>

SmartCoin raises $2 million pre Series A funding from international investors

<p class="graf graf--p graf-after--h4">We’re in the middle of a fintech boom that <a class="markup--anchor markup--p-anchor" href="http://www.accion.org/fintech-trends-may-change-world/" target="_blank" rel="noopener noreferrer">could change the world</a>. As a seed-stage investor in fintech for the underserved, Accion Venture Lab continues to see innovative startups increasing access to, reducing the cost of, or improving the quality of financial services for underserved individuals and small businesses around the world.</p>
<p id="c50b" class="graf graf--p graf-after--p">As we kick off a new year, we’re particularly excited about seven areas of startup-led innovation.</p>

<h3 class="graf graf--p">Digital neobanks</h3>
[caption id="attachment_8117" align="alignnone" width="800"]<img class="size-full wp-image-8117" src="http://blogs.accion.org/wp-content/uploads/2018/01/APPSM_Mockup2.jpg" alt="SmartMEI is a digital neobank serving small businesses in Brazil" width="800" height="534" /> SmartMEI is a digital neobank serving small businesses in Brazil[/caption]
<p class="graf graf--p">In the last few years, we’ve seen the emergence of a number of digital neobanks. Neobanks offer a user-friendly digital interface and a platform for financial services without maintaining their own banking licenses. With a focus on user experience and digital applications, neobanks stand to offer faster and better service to the underserved. Moving forward, neobanks will need to provide both a compelling product for a targeted customer segment and a suite of offerings that go beyond basic accounts or credit cards to retain customers and improve unit economics. Innovators in this space include <a class="markup--anchor markup--p-anchor" href="http://www.accion.org/invested-in-now-money/" target="_blank" rel="nofollow noopener noreferrer">NOW Money</a>, which offers migrant workers in the UAE a platform to more efficiently transfer remittances and access to other products and services over time, and <a class="markup--anchor markup--p-anchor" href="http://www.accion.org/why-we-invested-in-smartmei-in-brazil/" target="_blank" rel="nofollow noopener noreferrer">SmartMEI</a>, which offers small businesses in Brazil a free tax tool and access to a broader set of financial services.</p>

<h3 class="graf graf--p">Next gen small business finance solutions</h3>
<p class="graf graf--p">Around the world, micro, small, and medium enterprises (MSMEs) struggle to access capital. Estimates suggest that <a class="markup--anchor markup--p-anchor" href="https://www.ifc.org/wps/wcm/connect/4d6e6400416896c09494b79e78015671/Closing+the+Credit+Gap+Report-FinalLatest.pdf?MOD=AJPERES" target="_blank" rel="nofollow noopener noreferrer">200 to 245 million formal and informal small businesses</a> either don’t have a loan or have one but are still constrained by their access to financing. Startups have been developing creative ways to acquire, underwrite, and fund these businesses. Some of the most innovative models today are embedding themselves into supply chains and working with a partner in that supply chain to identify MSMEs in need of financing and to obtain existing data that can support credit decision-making. These companies include <a class="markup--anchor markup--p-anchor" href="http://www.tiendapago.com" target="_blank" rel="nofollow noopener noreferrer">Tienda Pago</a>, which partners with major consumer good distributors in Peru and Mexico to extend short-term working capital to small stores for inventory purchases, and <a class="markup--anchor markup--p-anchor" href="https://www.lidya.co/" target="_blank" rel="nofollow noopener noreferrer">Lidya</a>, which works through partners in Nigeria to provide invoice discounting and supply chain financing to small businesses.</p>

<h3 class="graf graf--p">Insurtech for the underserved</h3>
<p class="graf graf--p">Low-income consumers in emerging markets need insurance products to manage and mitigate financial risks, but serving those customers poses significant challenges — from cost-effectively reaching and educating consumers, to accurately assessing and pricing risks, to efficiently managing claims. Startups can play a critical role in solving those challenges with products intended to address specific risks for underserved communities, new distribution channels to reach these populations, and new streams of data to more effectively assess and price risk. Insurtech innovators include <a class="markup--anchor markup--p-anchor" href="https://lumkani.com/" target="_blank" rel="nofollow noopener noreferrer">Lumkani</a>, which sells a low-cost heat detector bundled with insurance to households in South African informal settlements that protect against loss of life, shelter, and assets, and <a class="markup--anchor markup--p-anchor" href="https://www.togarantido.com.br/" target="_blank" rel="nofollow noopener noreferrer">Togarantido</a>, which serves as an online-based insurance broker focused on the underserved in Brazil.</p>

<h3 class="graf graf--p">Financial services for smallholder farmers</h3>
<p class="graf graf--p">Smallholder farmers remain notoriously difficult to reach and are often considered high-risk clients since their incomes are tied to unpredictable harvests. An estimated <a class="markup--anchor markup--p-anchor" href="https://www.raflearning.org/post/inflection-point-unlocking-growth-era-farmer-finance" target="_blank" rel="nofollow noopener noreferrer">270 million smallholder farmers around the world face a financing gap of $170 billion</a>. Innovators addressing this need can provide real value — by helping farmers finance irrigation pumps, combat pests, or address climate risks. Startups in this space include <a class="markup--anchor markup--p-anchor" href="https://apolloagriculture.com/" target="_blank" rel="nofollow noopener noreferrer">Apollo Agriculture</a>, which leverages satellite imagery, data science, and mobile money to finance fertilizer and seeds needed to increase crop yields, and <a class="markup--anchor markup--p-anchor" href="https://www.pula-advisors.com/" target="_blank" rel="nofollow noopener noreferrer">Pula</a>, which works with large seed and fertilizer suppliers across Africa to bundle crop insurance in with product purchases.</p>

<h3 class="graf graf--p">Asset finance</h3>
[caption id="attachment_8118" align="alignnone" width="800"]<img class="size-full wp-image-8118" src="http://blogs.accion.org/wp-content/uploads/2018/01/KN_PG_2016_25.jpg" alt="The Paygo team at work on their smart meter for cooking gas" width="800" height="533" /> The Paygo team at work on their smart meter for cooking gas[/caption]
<p class="graf graf--p">Individuals and small businesses require financing for assets like medical equipment, smartphones, and solar home systems to increase efficiency and improve lives. One promising innovation in this space is pay-as-you-go financing, which allows consumers and business owners to make small upfront payments and regular “top-ups,” usually sent via mobile money. The model has already led to a rapid expansion in solar home systems across emerging markets. Other scalable models for asset financing leverage new distribution and payment approaches like layaway solutions, leasing models, and peer-to-peer transfers. <a class="markup--anchor markup--p-anchor" href="https://www.paygoenergy.co/" target="_blank" rel="nofollow noopener noreferrer">Paygo Energy</a> is a promising company in this space; its pay-as-you-go financing model enables low-income customers in Kenya to pre-pay for cleaner and more affordable cooking gas.</p>

<h3 class="graf graf--p">All-digital consumer lending</h3>
<p class="graf graf--p">Recent years have seen digital consumer lenders emerge and scale by using simple apps to collect and analyze customer data to provide access to credit for underserved populations. The speed and accessibility of digital platforms enable credit access for consumers who are underserved by traditional lenders and who might otherwise be too costly to serve. Innovators could add value to the sector with new approaches to credit underwriting and consumer engagement that lower defaults and improve retention — two of the critical challenges to the app-based lending model. <a class="markup--anchor markup--p-anchor" href="http://smartcoin.co.in/" target="_blank" rel="nofollow noopener noreferrer">SmartCoin</a> offers new engagement tools alongside its mobile lending platform to better understand and serve its customers in India, and <a class="markup--anchor markup--p-anchor" href="https://www.tezfinancialservices.pk/" target="_blank" rel="nofollow noopener noreferrer">Tez</a> provides an all-digital banking platform with a full suite of products to low-income consumers in Pakistan.</p>

<h3 class="graf graf--p">Consumer financial health</h3>
<p id="ce83" class="graf graf--p graf-after--p">In 2016, the Federal Reserve revealed a concerning statistic about financial health in the U.S.: 46 percent of Americans said they could not pull together <a class="markup--anchor markup--p-anchor" href="https://www.washingtonpost.com/news/wonk/wp/2016/05/25/the-shocking-number-of-americans-who-cant-cover-a-400-expense/?utm_term=.b9b4359e9508&amp;noredirect=on" target="_blank" rel="nofollow noopener noreferrer">$400 to cover an emergency</a>. Startups are providing solutions that help consumers manage their day-to-day financial lives and rebound from shocks. There is significant potential for innovators to leverage behavioral science to design new solutions such as clever nudges, useful automation, gamification, or bundling across different financial products. Innovators in this space include <a class="markup--anchor markup--p-anchor" href="https://www.lendstreet.com/" target="_blank" rel="nofollow noopener noreferrer">Lendstreet</a>, which focuses on financial health by providing U.S. consumers a platform to restructure and refinance their distressed debt and rebuild their credit, and <a class="markup--anchor markup--p-anchor" href="https://www.destacame.cl/" target="_blank" rel="nofollow noopener noreferrer">Destacame</a>, which empowers users in Mexico and Chile with control of their data to build their financial capabilities and access better financial products.</p>
<p id="2358" class="graf graf--p graf-after--p">Each of these areas of start-up led innovation offers significant potential for both social impact for underserved consumers and financial profit in 2018. We’re excited to see what’s next.</p>

7 fintech trends to watch in 2018