Many rural households bore the brunt of the crippling lockdown from March which directly affected their consumption patterns. With little income, a number of families were pushed to the brink of poverty, with curtailed access to essentials.
In such an environment, the company reached out to its customers and helped them access cash by providing loans for essentials. Through digitization of loan documents and by promoting digital engagement through WhatsApp, the executives said, Dvara ensured easy cash flow for purchase of daily essentials to ensure that the lockdown did not affect their day-to-day survival.
“The loan amounts are Rs 1,000, Rs 1,500 and Rs 2,000 and are meant for essentials like toiletries and groceries. For instance, the Rs 1,500 pack has about 30 items that would include things like sugar, toothpaste, sambar powder, rice, garlic, dals and so on,” said LVLN Murty, Deputy CEO of Dvara KGFS.
Around 1,000 people have received these loans as of September and that around 70% of those taking up such loans opted for the Rs 2,000 ticket size option. The repayment schedule was drawn out for about 3-6 months, he added.
Joby CO, the chief executive of Dvara KGFS, said that while the loan product may not be scaled up, it provides valuable insight into rural household consumption and delivery of services to rural India.
The loan for essentials may be tailored as an off-the-shelf product for customers to plan their monthly expenditure in future, he said. The company’s algorithms would become adept at gauging who would be able to take up such loans.
He said the kirana (corner) store has gained new prominence with the Covid-19 pandemic, adding that there was a need and opportunity for specialised providers and logistics partners to serve rural India. It would not be entirely feasible for aggregators like Swiggy and Dunzo, for instance, to service these addresses, he added.
“We see a wave of the kirana stores being utilised heavily,” Joby said. “We are also talking to aggregators helping kirana stores be more digitised. We have around 10,000 kiranas that we have funded and we’re looking to scale up that number further this year.”
Joby said that Dvara would focus on small businesses, which made up around 6-7% of its overall loan portfolio last year. This year, the company is looking to push that number to 20%, with a major thrust on retail stores.
Joby said the projection was based on expectations of an about 5X growth in the small kirana store engagement in the current year compared to last year.