Exclusive Interview with Poshak Agrawal, CEO and Co-Founder of Florence Capital

Poshak Agrawal explains the importance of women empowerment through FinTech in 2022

FinTech is flourishing in the global financial market for the integration of cutting-edge technologies such as artificial intelligence, IoT, and many more. Digital transformation has revolutionized the traditional banking system where there were no opportunities for women to have financial support. The global FinTech market is expected to hit US$324 billion in 2026 at a CAGR of 25.18%.

Here is an exclusive interview with Poshak Agrawal, CEO and Co-Founder of Florence Capital, who motivated the FinTech industry to focus on women empowerment with its product Florence Learn and the OKR framework in 2022. Poshak has graduated from Princeton University in Economics and Finance. Back in India, he founded his first company, Athena Education, one of the most renowned in its segment in India. During his years at Princeton, he worked at Fortress Investment Group, as one of the only two summer analysts. Poshak has successfully created Florence Capital as India's first FinTech and ethical lending platform designed exclusively for women.

1. Kindly brief us about the company, its specialization, and the services that your company offers.

Launched in 2021, the mission of Florence Capital is to empower women. The company exists to enable women to be financially aware and independent, opening the doors for their meaningful inclusion in the economy. This will go a long way in enabling Indian women to live their best lives.

The team took to providing ethical and fair loans as the first step towards this larger goal. It disburses loans through the mobile app (Florence Capital) which is designed to make it easy and enjoyable for women to take loans.

How the platform works

On Florence Capital, users can avail of loans through a 100% digital process. After signing up, she'd have to upload her selfie, PAN card, and other necessary details. The customer delight and loyalty team is always there to help, and even reach out when they feel a user is stuck at some stage through the process. After her loan is approved, she is asked to choose a repayment method for EMIs and the loan amount is disbursed into the specified bank account. It takes maximum ten minutes to complete a loan application.

The process is quite simple and can easily be done from the comfort of one's home.

There are some women-specific features on the platform such as the company has India's first all-women loan collections team and customer service team which ensures borrower comfort (female borrowers only interact with other females) as well as Free value-added services for borrowers. It means that women have traditionally been left out of financial decision-making. The aim is to empower them with the right frameworks and information to promote financial literacy and independence. It is building a community/network of women who learn together from our curated content and open opportunities for each other.

Florence Capital is presently conducting one on one career counseling for borrowers, professional development workshops, and webinars on soft skills and business practices.

Florence Learn is a safe space for Indian women who want to live a productive, dignified, and prosperous life through the necessary financial resources provided by the company. This includes micro-educational content which breaks down financial concepts, making finance easy to understand, and equipping women to apply these concepts to overcome their day-to-day challenges and meet their goals.

While this can be helpful for anyone (gender agnostic), a 100% digital loan without any physical visit is especially helpful for Indian women because it overcomes the barriers of socially imposed restrictions and the discomfort of having to frequent places for 'money-related matters.'

The team offers clear, fair, and transparent terms of lending— credit awareness or counseling programs that help borrowers understand the impact of non-repayment on their credit score. The team works with borrowers, depending on the circumstances, to help them best structure the loans.

The company is also focused on innovations in credit underwriting factoring in the unique pain points of women such as the fact that about half of borrowers would be new to credit or have thin credit profiles.

2. With what mission and objectives, the company was set up? In short, tell us about your journey since the inception of the company?

The mission is to empower women by making them more comfortable with and confident in dealing with financial matters.

The objective is to bridge the existing gaps in India and make finance more than 'a man's world' by creating safe spaces for women to participate in financial decision-making. While innovation in traditional financial systems and technology will play a huge role in making this happen, the power of women to form a community to foster financial independence among each other will make it sustainable and create an impact at scale.

The team is solving multiple problems such as bridging the credit gap where 2/3 of Indians have credit scores and only 2/3 of those get served by banks. Overall, more than 50% of Indians are excluded by the formal banking system as well as overcoming the lack of agility in the traditional banking system. The larger vision is to make credit accessible to underserved population segments in India. These segments are often 'new-to-credit' (NTC) or have very less credit history and therefore, considered 'risky'. Innovation in technology will not only mitigate these risks but provide appropriate or customized product offerings for these segments.

The traditional banking system lacks the agility to cater to these fast-growing segments because the credit assessment practices are antiquated or conservative, the process is cumbersome, there are too many charges, and there is a high turn-around time.

There is a lack of access to ethical and transparent credit for women because out of 100 loans disbursed, 25 go to women. The reason is that women face higher rates of rejection when compared to their male counterparts. Even if they manage to secure a loan, they are often victims of harassment through collection malpractices.

This has left a huge gap in access to fair and transparent credit. While this gap is an opportunity, it is also equally exploited in the market, thus necessitating access to fair, transparent, and ethical credit. The RBI has taken note of the critical situation.

The company is also focused on closing the financial literacy gap where only 27% of India is financially literate— of this population, the split is 20% for women and 30% for men. It is focusing on awareness and accountability in accessing credit and making financial decisions so that women are not left in the lurch after taking a loan.

Florence Capital started its journey of lending in January 2021 and, so far, the team has enabled over 1500 women to achieve their personal and business needs through loans. The company is proud of the default rate which is at around 2% and over half of the customers come from the community and through word-of-mouth. Half of the portfolio consists of women who are new to credit or have thin credit profiles which are together 50% of the borrowers.

Currently, the team is actively disbursing loans in Tier 1 cities like Mumbai, Bengaluru, NCR, Ahmedabad, Pune, Chennai, etc., and some Tier 2 cities like Mysore, and Coimbatore. On a pilot basis, it has disbursed loans in Jaipur, Ajmer, Bhopal, Udaipur, and Indore.  With time there is a plan to expand the operations to more Tier 2 and Tier 3 cities.

3. What is the edge Florence Capital has in the industry?

The team is solving a larger problem than merely providing credit. For them, while credit may be a legitimate need for some people, in a country like India where only 27% of the population is financially literate, the need for a loan or credit may also be a symptom of a larger and underlying issue. It is solving the root of the problem, a lack of financial awareness, which is especially prominent among women.

Florence Learn is a micro-educational content that breaks down financial concepts, making finance easy to understand and equipping women to apply these concepts to overcome their day-to-day challenges and meet their goals. It also provides borrowers with an array of free value-added services (VAS). Women have traditionally been left out of financial decision-making. The aim is to empower them with the right frameworks and information to promote financial literacy and independence. It is building a community or network of women who learn together from the curated content and open opportunities for each other.

It is presently conducting one on one career counseling for borrowers, professional development workshops, as well as webinars on soft skills and business practices. For borrowers who need loans or credit, the team is creating a unique experience for women when they take loans from Florence Capital by gamifying the process and focusing on ethical lending through clear communication of terms.

4. Growth plans for the next year.

The company aims to provide ethical and transparent credit to women across India, especially in Tier 2 and 3 cities— from enabling 1500 women to date to enabling 12,000 women by 2022.

The plan is to build India's largest community of women— a community where every woman is financially empowered. As part of this, the team wants to scale Florence Learn and diversify free value-added services to borrowers.

5. What is your Leadership Mantra?

• Build Trust! With your customers and your teams.
• Dream big! See the greatest potential in you.
• Seek challenges! Sometimes they come with discomfort but that is what builds muscle (and not just the physical kind!).
• Be kind! It's important to give feedback in a constructive manner, which would help someone grow to create a nurturing space.
• Be human! See the best in people and take time to build relationships.
• Be logical! Seek to make data-backed decisions.

6. How C-suite executives can leverage data to deliver business value to their organizations?

Data can be used in a variety of ways since analytics can span a range of functions such as marketing, risk, and operations.

They can establish a data-driven and goal-oriented mindset with example, at Florence Capital the team has adopted the OKR (Objectives and Key Results) framework which it tends to find to be an incredibly powerful tool for the C-suite to implement for the organization and themselves. Setting OKRs has the following benefits including clear objectives for every member of the team, super inspiring because they can see how their objectives contribute to larger company objectives, having defined key results ensures that they are more focused on output. If one can't measure, one can't succeed. Last, but not least, essentially, any goal pursued will have a data-oriented success metric.

One should use technology to measure every step of the process. If it's recruiting, one must measure how many applicants are applying from which source, and the efficacy. If it's customer service, one can measure the turn-around time to resolve customer queries as well as take feedback and measure the happiness level of customers.

Data-driven insights can help set clear strategies and benchmarks for measuring successful outcomes— whether this is for new business initiatives, reorienting the product, etc.