Rural credit startup SarvaGram raises Rs 565 crore in Series D led by Peak XV Partners

Avendus Capital served as an exclusive financial adviser for the deal.

“The fundraise will boost our mission of putting more power in the hands of rural households by enhancing their access and ease them into a curated set of financial and productivity enhancing solutions,” SarvaGram co-founder and CEO Utpal Isser said.

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Inside Sarvagram

Founded by Isser and Sameer Mishra in 2018, SarvaGram's unique selling proposition lies in its focus on the untapped, growing segment of aspirational semi-urban and rural households, which are classified as “underbanked but creditworthy”.

It categorises customers into three segments — salaried, farm, and micro, small, and medium enterprises (MSMEs) — to offer a range of credit, including gold, housing, personal, farm, and consumer durable loans.

It operates through a household-centric lending model that treats the entire household as a cohesive economic unit, unlike traditional underwriting models that assess individual income or paying capacity before sanctioning a loan.

These households include those with a “chief wage earner” drawing a monthly salary, those owning or cultivating land or dairy farms or those involved in manufacturing, trading, or retail services such as handicrafts, farm implements, doctor’s clinics, kirana stores, pharmacies, electrical shops, footwear shops, wholesalers and clearing and forwarding (C&F) agents.

Rural India is evolving fast, with rapidly growing aspirations of households, the firm said.  With multiple sources of income, most of these households cannot be bracketed into a single occupation type.

The loans are issued by Sarvagram Fincare and partner lenders, which include IDFC First, AU Small Finance Bank, Caspian Debt and Vivitri.

It also provides farm mechanisation (pay per use basis) solutions and insurance for the rural customers.

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SarvaGram operates 150 branches across Gujarat, Maharashtra, Karnataka and Rajasthan, with plans to enter new states and strengthening presence in existing ones in the current financial year.

The lender claims to have served more than 1 lakh customers and managing assets worth Rs 1,200 crore of loans, with 70 percent of the portfolio secured by property as collateral.

"With over 25 years of experience each in serving the financial needs of rural, middle-income families in India, Utpal and Sameer have developed and scaled specialised products tailored for this segment. They are building SarvaGram with a unique, household-focused approach to bridge a critical gap in financial access,” said Chinmaya Golecha, principal, Peak XV.

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Financial turnaround

Though SFPL’s operations are in early stages with high operational costs, the NBFC turned profitable in FY24, reporting profit after tax of Rs 7.6 crore.

The group entity SarvaGram Solutions Private Ltd (SSPL) continues to operate at a loss, the provisional numbers shared by ICRA ratings show.

SSPL narrowed net loss to Rs 11.6 crore in FY24, 65 percent lower than the previous year, with total assets under management (AUM) growing 1.5 times to Rs 1,166 crore, it added.

In addition to its NBFC arm, in which SarvaGram holds a 79.6 percent stake, the firm provides non-lending financial services such as farm mechanisation solutions and insurance distribution in the areas served by SFPL through Sarvamitras.