Arohan Financial: A Ray of Hope for the Financially Underprivileged
If you fail to plan, you plan to fail - and Arohan Financial would never let you fail!
The majority of us have been in a situation where we are financially insecure and unable to meet our basic needs. When you have no one to support you, it can be quite difficult, but fortunately, there are financial services that can extend a helping hand when you need it the most.
Vineet Rai saw that the number of Indians in need of help was growing every day, therefore, he devised something that saved countless lives - the Aavishkaar Group.
From the start, Vineet’s purpose was to assist Indians who had limited or no access to financial services - and he certainly succeeded! Assisting a small number of people to expand the reach and helping over 2 million people didn’t happen overnight.
Stick around and get to know the story behind Arohan, changing lives in India, one loan at a time.
A Better Day For Indians is on the Horizon
Vineet Rai is the founder of the Aavishkaar Group, currently holding numerous branches, one of which is Arohan Financial.
Vineet Rai grew up in Rajasthan, wandering from place to place because of his father’s government job as a hydrogeologist.
Vineet was a dreamer, a boy whose aspirations superseded his age. His early ambitions were to join the Indian Army, but were foiled after three failed attempts at the examination - his goal had been shattered, yet, something bigger was on the way!
Unsure of which path he wanted to take, he enrolled in the Indian Institute of Forest Management in Bhopal to get his hands on a degree in Forestry.
Following graduation, Vineet went to work for a paper manufacturer, where he was stationed in the deep, frosted lands of Odisha. He worked for a little more than three years, battling off cobras while overseeing the woodlands.
His wife, however, advised him that he choose a safe profession when the Rais were expecting the first child. He tried for a variety of jobs, including car salesperson and biodiversity projects - none of which piqued his interest.
The Thorny Road to Success
Vineet Rai was well-versed in rural India, and he possessed the knowledge to effect change. He devised strategies, as he puts it, to make poor people rich. But in order to do so, he required some money to put his ideas into action.
Vineet had discussed his ‘theories’ with a few investors, but none of them were interested. He resigned from his job and set out to establish a fund that would transform rural India. However, getting funds proved challenging - no one wanted to provide money to a forester who wanted to work in finance.
Finally, using his connections, Vineet was able to propose his ideas to a small group of expats in Singapore, and they were well received.
Restless Vineet was able to get money from the group and, voilá, Aavishkaar Group was born! Despite the fact that the funds he received were insufficient to keep the company running, it was still a huge success that brought Vineet one step closer to realizing his dreams.
The Aavishkar Group has grown significantly over the years, becoming one of the most well-known in India, particularly after the establishment of Arohan Financial in 2006.
The road was thorny, but it proved Vineet Rai’s boots were made for endurance and strength.
Arohan Financial: The 21 Century’s Hope
Arohan Financial, a subsidiary of the Aavishkaar Group, was founded in Kolkata in 2006 and is the largest NBFC MFI in Eastern India. Shubhakar Sengupta created it, however, he eventually lost his footing with the company, and Vineet Rai has been the director since 2013.
With the goal to help the impoverished Indian people, the company’s services and products are targeting those underserved, providing financial help in the form of credit and insurance goods.
Arohan Financial’s insurance products include life and health insurance policies issued by Indian insurance companies with which it has partnered. Microfinance institutions can also get term loans from the company - overall, it gives all a human in need requires.
It offers loans to women who live in low-income areas, as well as everyday loan goods such as loans for sanitation and utility products, among other things.
By 2020, the company has served over 2 million borrowers across 17 states - including 12 of India’s low-income states. As of that year, the company’s microfinance business branch network held 710 branches in 11 states, while its MSME networks had 10 branches in 8 states.
Despite competition from Ujjivan, Fusion Microfinance, and Basix, the company was able to carve out a niche for itself on the market. The company has a bank loan rating of A - (very stable), and is certified a “Great Place to Work” - it is one of India’s top 100 best workplaces.
Garnering the Finances
The overall grant amount for Arohan Financial is $20 million, and through the IPO, the company is actively growing in size.
With a gross loan portfolio of ₹4.600 crores in 2021, it is the largest NBFC MFI in the eastern Indian area. At ₹210 per share, it raised ₹189 crores from ASK Financial Holding, Arohan ESOP Trust, and ASK Holding. The gross loan portfolio was $48.57 billion.
It achieved the second-highest GLP CAGR of 68% among the top five in India between 2017 and 2020, as well as the highest customer growth of 49% CAGR between 2018 and 2020.
As a result of the pandemic, the company suffered a loss in 2021 - it reported a net loss of ₹160 crores. However, Arohan Financial Services’s gross NPAs increased by more than fourfold to 11% in 2021, up from roughly 2.25% in 2020.
Overall, it is a very stable company with a promising future.
A Generous Outlook on the Future
The company’s purpose is to empower underserved households by providing a variety of financial services in a way that is sustainable for all stakeholders involved.
By 2025, The company hopes to have impacted over 20 million people - which demonstrates the company’s tenacity and ambition.
By the same year, Arohan Financial wants to be one of the top three financial institutions in India, serving over 5 million families with a portfolio of ₹25.000 crores and being one of the best places to work.
It aims to keep developing products and procedures that are transparent to its customers so that the information they receive is clear and sufficient.
Arohan Financials tries to foster a creative culture within the company, where workers are encouraged to work and create, giving it their best. It also aims for honesty and integrity in all internal and external communications.
Help Is on the Way
Thanks to Vineet Rai and Shubhakar Sengupta, in 2006, Arohan Financial established itself as a business entity that targeted those in dire need of finances.
The purpose of the company has been the same since its inception - to help the destitute Indian people. The company’s services and products are aimed at underserved clients, and it provides help in the form of credit and insurance goods.
Holding head offices in Kolkata, Arohan Financial offers work to more than 6700 people, all believing in the same goal as Vineet - lending a hand to those overlooked by the system.
Furthermore, the company’s financials demonstrate that it is a reliable company that customers can trust. Arohan Financial is always seeking new ways to improve its services and without a doubt, it succeeds!
Aside from that, Arohan has a big plan for 2025! Everything we’ve said thus far indicates that it will again without a doubt, do what it set out to do.