Fintech Startup Bueno Finance is Providing Blue-Collar Workers With Access To Credit
Logistics/delivery, manufacturing, and retail employ the majority of the blue-collar workforce in India, who were all severely affected in the wake of the COVID-19 lockdown. The fact that they do not have proper access to credit – banks don’t reach out to them because of the lack of credit scores – made survival even more arduous.
But Gurgaon-based fintech startup ‘Bueno Finance’ intends to change that.
Backed by San Francisco-based Y Combinator and Mumbai-based 100X.VC, Bueno Finance is a credit building platform for blue-collar workers.
Founded by Sandeep Arora and Saurav Gandhi in Gurgaon, Bueno Finance intends to connect blue-collar workers to the conventional financial world.
Saurav Gandhi, Co-founder of Bueno Finance says, “Bueno Finance aims to improve the financial health of the blue-collar segment and is working towards building the credit history of these customers”.
He adds, “Most of these households are still not part of the formal credit economy as they do not have a credit score, or they are new to credit. Bueno Finance acts as a bridge between customers and big banks/NBFCs, and aims to provide access to formal credit for the next billion”.
This led to the establishment of Bueno Finance in 2019. The founders invested Rs 10 lakh in the business and worked with their NBFC partners, Stashfin and Liquiloans, to distribute the loans.
Bueno Finance has a hybrid approach. A customer can apply for an instant personal loan/credit line that also enables him to build a credit history and receive higher ticket loans at lower rates. The customers can avail this loan in their bank account, directly from NBFCs registered by RBI. It focuses on new-to-credit customers (NTC) where it provides small credit to help people in building their credit history.
It also partners with B2B employers that employ gig workers and blue-collar workers, such as Swiggy. This helps in fraud prevention and helps in providing better products.
Saurav says, “In our industry, there are few players who are doing either B2B and B2C. Fintech players and small NBFCs have started targeting this segment, but they charge exorbitant interest rates to compensate for the higher ‘risk’ associated with this segment. Bueno Finance wants to change this situation and bring this segment to mainstream financial lending. Bueno Finance prime customers can get a loan of Rs 2-5 lakh at 15-18 percent interest.”
“Customer education” has been “critical” as establishing trust and the brand are the key components of driving this business. “One of the key issues is financial education. Almost 75 percent of the Indian population does not understand basic financial concepts and there is a huge opportunity to educate customers, especially in this segment. Bueno Finance is India’s first credit building platform for blue-collar workers,” he adds.
The founders have raised an angel round of $300,000, a pre-seed round of $125,000 from Y Combinator, and a seed round of $275,000. One of their investors is Kunal Shah, founder of Cred.
“We are in the very early phase and don’t want to disclose revenues,” Saurav says.
If you are someone who is looking to build a career with Bueno Finance, you can drop an email at firstname.lastname@example.org.