Ratan Tata, chairman emeritus of the Tata group, Nandan Nilekani, former chairman of the Unique Identification Authority of India, and former finance secretary Vijay Kelkar are joining hands to start a technology-enabled financial inclusion vehicle.
Named Avanti Finance, the company will focus on delivering affordable and timely credit to under-served and un-served segments in India, the company said in a statement. Avanti would be operational by the end of this financial year.
The promoters believe that institutional inequalities and information asymmetries are depriving the target customer segment of access to affordable credit.
The target customer segment over the last few years has displayed very low delinquency rates compared with any other customer segment, but still is charged the highest rate of interest.
Avanti’s primary objective is to make a difference in this sphere thereby enhancing the prosperity in these communities, the statement said.
Both Tata and Nilekani are bringing their investments from their philanthropic capital, and any gains will be reinvested in philanthropic causes. Avanti will apply for registration to the Reserve Bank of India in the coming days, the statement said.
Commenting on the development, Tata said, “Avanti will be a platform to impact the poor through credit at individual and community levels to create a lasting improvement in their livelihoods and standard of living, ushering prosperity.”
Avanti aims to leverage the social sector presence of Tata Trusts and other like-minded partners, UPI and payments bank ecosystem.
Nilekani said, “My participation in Avanti is more driven by social motivation rather than anything else — with a view to serve the under-served and un-served. Technology is an important differentiator and allows us to make a difference in many ways than one.”