This Bengaluru startup is redefining lending for Bharat’s farmers and MSMEs

Agriculture remains a critical sector for India’s economy, with a large percentage of the population still dependent on it for livelihood. Around 54.6% of the total workforce in India engaged in agriculture and allied sector activities, as per the 2011 Census of India. 

Within these farming households, a significant chunk of the community comprises smallholder farmers—a portion of which face substantial financial challenges. Yet, economic development agency Robo Foundation stated in its 2020 report that about 50% of India’s small and marginal farmers were unable to borrow from any source. 

The challenges in borrowing money from official institutions and banks comprise several factors including the lack of collateral, complex procedures, inadequate credit history, dependence on informal sources, lack of awareness, and debt cycle, among others. Even when loans are approved, delays in disbursement become an issue.

Timmana Gouda D, a former banker and co-founder of fintech startup WhatsLoan, explains: “Farmers spend 10% of the loan amount to access banks for agri-loans…and nearly 150 million farmers spend weeks and months to get agri-loans from banks, with half of them getting rejected by banks,” eventually ending up in private mandis and money lenders and 3 to 4% interest rates. 

This became the driving force behind the creation of WhatsLoan, a neo-lending platform launched in 2019 by Timmana and his wife Vidya TG. Using their life savings, they bootstrapped the platform to simplify the borrowing process for farmers. 

“We offer to bring down the cost of (loan) processing by more than 90%, and the TAT from lead to loan delivery in minutes, reducing it from days to weeks,” Timmana claims.

In 2021, WhatsLoan won the AgriEnterprise of the Year Award from TiE Hubli for its agriloan platform for Karnataka Gramin Bank. It was also a semi-finalist for CISCO-Government of India Agri Challenge, 2021. WhatsLoan was a part of YourStory Tech30 2024. 

Disrupting legacy challenges 

An MBA graduate from Karnataka University, Timmana spent nearly nine years with Axis Bank. He also served as a member of the Fintech Task Group with the Karnataka Digital Economy Mission (KDEM). He is currently a charter member of TiE Bengaluru, and Co-Chair of the Internet and Mobile Association of India (IMAI).

Co-founder Vidya is an alumnus of IIM Bangalore. She was a part of the Goldman Sachs 10000 Programme (a global initiative for women entrepreneurs). She worked with the Citi Group as an officer for personal loans, before joining HDFC Bank as a Senior Manager. 

“We felt the pain of borrowers which in our respective jobs with leading banks. We also saw too much technology chasing no real problems, and with no regard for compliances. This made us sit up and realise that deep-domain knowledge-based founders are best suited for building lending systems for large balance sheet banks that started their long-drawn digital transformation journey while keeping legacy banking systems in tow,” Timmana explains. 

With their combined experience in the banking sector, the couple realised that one of the major issues plaguing private g banks’ lending process was that the softwares were not consumer and sourcing channel-friendly. 

“This was because they were built on legacy core banking systems—constraining customer orientation, validation, and automated decision-making—leading to wrong and high rejection rates with high cost of processing with long TAT (turnaround time),” Timmana explains. 

Interestingly, the founders had bought the ‘whatsloan.com’ domain name in February 2014, the same day when WhatsApp was bought by Meta. “We reserved the domain name and kept it for future use,” he adds. 

Built for Bharat 

WhatsLoan works as a loan-as-a-service (LaaS) mobile-first platform that provides technology to empower the borrower. It bridges the gap between borrowers and lenders by building a digital, instant, paperless, presence-less, and branchless neo-lending platform. 

The startup offers agricultural, consumer, and MSME loans to loan-takers in a pay-per-loan-file basis. “We offer to bring down the cost of (loan) processing by more than 90%, and the TAT from lead to loan delivery in minutes, reducing it from days to weeks,” says Timmana. 

Additionally, in order to cater to the ‘Bharat’ of India, the platform is available in English, Hindi, and other multilingual languages. It uses Digilocker to access data and documents, offering customised BREs (Business Rule Engines) and CREs (Credit Rule Engine), and digital documentation for agreement and repayment of loans. 

The platform uses AI to identify and match face, name, and other important information across documents. It then connects with banks, its banking correspondents, and loan distribution channels of banks and lenders. 

The company charges anywhere between Rs 100 to Rs 1,000 (average Rs 200) per file—claiming to reduce loan processing costs by 90%, while cutting down loan disbursal time from week to minutes. 

Market overview and plans ahead

According to market research company SNS Insider, the digital lending platform market was valued at $10.3 billion in 2023, and is expected to grow to $50.7 billion by 2032 at a CAGR of 22%. Other players operating in the space include Perfios, Lentra, M2P Fintech, Jocata, New Gen and ScoreMe, among others. 

With over $4.8 billion in assets under management, WhatsLoan has already served nearly one million borrowers, offering products like Kisan Credit Cards, MSME loans, and affordable housing loans. 

The startup now plans to acquire 10 out of the 43 Gramin Banks in India, to further bridge the rural credit gap.