• Among the 64 million MSMEs in the country, only about 14% have access to credit
• MSMEs are currently battling monumental challenges with a credit gap of $530 Bn
• Retail ‘Bharat’ customers too have significant potential to be serviced better through improvement in lending processes and timely access to capital
Founded in 1998, Shivalik Mercantile Co-operative Bank (SMCB) commenced its journey as a district level urban cooperative bank (UCB) from Saharanpur in Uttar Pradesh. In 2001, Shivalik SMCB received its banking license to transition to a Small Finance Bank (SFB), becoming the first SFB to transition from a UCB. With 25 years of experience in offering retail banking products and services, Shivalik recognizes the substantial untapped potential within India's MSMEs and retail customers. The bank understands that providing financial access to these underserved segments is crucial for driving India's economic growth. Shivalik is committed to providing capital to these underserved small business and customers including small mom-and-pop stores and women entrepreneurs. The bank will also focus on areas of the future like EV and solar financing.
Shivalik is taking a tech-first approach to service this segment. Most banks are still largely operating on archaic technologies, from their legacy infrastructure systems to taking a traditional paper-first approach in their daily operations. Further, launching fintech partnerships for some of the banks can take months as integrations into these old systems is time-consuming. With India growing rapidly and banks focusing on Bharat still low on tech adoption, we welcome Shivalik as a breath of fresh air.
The bank is technology focussed and is powered by Infosys Finacle Core Banking and Digital Banking Suite. The bank’s cloud-based architecture provides it with unmatched agility to cost-effectively manage scale and power its growth. The bank has over 8 lakh unique customers and operates through 175 branches across Uttar Pradesh, Uttarakhand, Madhya Pradesh, National Capital Region (NCR), Rajasthan, Gujarat and Telangana, Karnataka, Maharashtra and Tamil Nadu.
Shivalik is building an extensive library of APIs across customer onboarding, e-KYC, savings accounts, deposits, and lending that can help accelerate their partnerships and offer innovative banking solutions. Further, banking channels and partner use cases are re-architected into separate micro-services that can be enhanced, monitored and scaled independently. Shivalik is committed to offering new products and services, while improving the delivery approach by leveraging technology.
At the same time, while having a tech-first approach to banking the team comes grounded with a DNA in traditional banking experience, allowing the team to have a holistic view of the ecosystem and a balanced approach while running the bank. A team of seasoned bankers, they are able to manage growth and governance just as effectively.
Shivalik also presents itself as a unique SFB. The banking history gives Shivalik a deposit-taking DNA. With 25 years of lineage of running bank branches, the team’s understanding and ability to raise retail deposits is very strong and a part of the branch culture.
Given its banking history, Shivalik also has a different approach on book building compared to its peers. Shivalik primarily focuses on secured lending (MSME, gold, agri, LAP), and has shown strong YoY growth while expanding NIMs, decreasing NPAs, and improving PCR. Being domiciled in UP, the fastest growing state, Shivalik has shown commensurate growth and now is present across 10 states. On the liability side, Shivalik demonstrates healthy CASAs and steady COFs, giving the bank a comfortable base to lend on.
The bank is helmed by seasoned leaders. Anshul Swami, CEO, comes with 21 years of experience in MSME and consumer banking with RBL and Barclays. Gaurav Mittal, COO, comes with 20 years of experience in financial services and infrastructure, and is bank veteran having been with them for 10+ years. Gaurav Seth, CFO, comes with 20 years of experience in financial planning, cost & profitability management, treasury, investor relations with Actis PE, KPMG and Deloitte. Anshul Sharma, CRO, comes with more than 23 years of experience in Credit Risk Management, Operational & Fraud Risk Management, Statistical Modelling & Analytics and Product Management with domestic as well as various foreign banks. Ramesh Thimmana, CIO, comes with more than 25 years of experience and has held strategic roles at SAAS and User Internet startups in India.
The bank is also supported by a strong board and governance structure with board members such as Shankar Agarwal (ex-Labor and Employment Secretary, Postgraduate in Computer Technology Engineering, from IIT, Delhi and Graduate in Electronics and Communication Engineering from IIT, Roorkee), Arundhati Mech (ex-Chief General Manager and Regional Director at RBI), Mr Malay Mukherjee, a veteran banker of more than 4 decades ex-CEO and MD of IFCI Limited and Executive Director of Central Bank of India), Veena Hingarh (CA, CS, Certified Information Systems Auditor – in her career spanning close to three decades, she has been associated with Moody's Analytics, Fitch Learning, KPMG Middle East. Informa Inc and Ken Knowledge Singapore), Dr Shalini Lal (25+ years of experience includes leadership roles at Bharti Televentures, Deutsche Bank and Escorts Agri).
We at Sorin see a big opportunity for financial services and financial inclusion in Bharat and are excited to partner with a strong management team at Shivalik who deeply understand raising retail deposits, managing risks and leveraging technology.
For further details on Shivalik Small Finance Bank, visit www.shivalikbank.com
Founders building in the fintech space can reach out to us at aashna@sorininvestments.com.