Saswat Finance, an Indian fintech platform, has raised US$2.6 million in a pre-series A funding round led by Ankur Capital. Existing investor Incubate Fund Asia also increased its investment in the company.

The funds will enhance Saswat’s technology infrastructure and expand its financial products. The company plans to scale operations in Maharashtra, Karnataka, and Uttar Pradesh.

It will also improve its data and analytics capabilities.

Founded in 2022, Saswat Finance aims to provide financial services to underserved markets. It is initially targeting India’s US$135 billion dairy sector.

The company has onboarded over 6,000 customers and facilitated loans exceeding 55 crore rupee (US$6.7 million).

The company has partnered with organizations like AMUL, Britannia, and insurers such as Iffco Tokio General Insurance. These partnerships help enhance its distribution network.

Saswat Finance is currently operational in Maharashtra, Uttar Pradesh, and Karnataka.

🔗 Source: Saswat Finance

🧠 Food for thought

1️⃣ Bridging India’s massive rural finance gap presents a multi-billion dollar opportunity

The $2.6 million funding for Saswat Finance highlights the enormous untapped potential in rural financial services, particularly in the dairy sector.

Access to formal credit could increase farmers’ incomes by 40-60%, yet only 53% of India’s farmers currently have access to institutional financing, forcing many to rely on local moneylenders charging interest rates as high as 60% annually 1.

This financing gap persists despite agriculture employing nearly 50% of India’s population, creating a substantial opportunity for fintech platforms that can effectively reach underserved rural communities 2.

Saswat’s focus on data-driven lending using alternative metrics like milk production and weather patterns mirrors successful models employed by other agri-fintech players like Aggois and Jai Kisan, which have demonstrated that innovative credit assessment can unlock capital for previously unbanked populations 2.

By targeting the dairy sector, projected to grow from $135.30 billion in 2024 to $274.09 billion by 2032, Saswat is entering a rapidly expanding market where financial inclusion initiatives can drive substantial economic value 3.

2️⃣ The “phygital” approach is becoming essential for rural fintech success