Structured Thinking Workshop: Assignment-2
Case Study: FinFund – Growth Challenge
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Company Background
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FinFund is a digital lending startup focusing on urban areas in India. By
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leveraging technology, FinFund simplifies credit assessment and loan
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delivery, offering personal loans and credit lines via a mobile app. As a
rising fintech player, FinFund’s mission is to make borrowing more
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accessible, using a best-in-industry underwriting model built on
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alternative data including social media activity, mobile usage, and
e-commerce behavior.
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Business Model
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FinFund operates on a robust lending model, borrowing money from
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HNI lenders and distributing it to the borrowers. Revenue sources
include:
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● Interest Spread: Difference between borrower rates and lender
capital costs
● Origination Fees: 1-3% of the loan amount, based on risk profile
● Late Fees: Additional revenue from delayed payments
Structured Thinking Workshop: Assignment-2
To manage risk, FinFund’s algorithms analyze over 1,000 data points per
applicant, updating credit risk profiles based on repayment behavior
and dynamic factors.
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Product Portfolio
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1. Unsecured Personal Loans (80% revenue split)
○ Purpose: For needs like medical emergencies, travel,
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education, and lifestyle
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○ Loan Tenure: 3 months to 2 years
○ Loan Amount: INR 10,000 – INR 5,00,000
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○ Interest Rate: 15% to 24%, depending on credit profile & loan
amount
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○ Eligibility: Stable income, 650+ credit score, digital
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transaction history
○ Approval: Instant assessment via algorithm; funds are
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disbursed rapidly
2. Credit Lines (20% revenue split)
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○ Purpose: Short-term, flexible cash access for expenses like
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bills and cash flow
○ Credit Limit: INR 10,000 – INR 1,00,000
○ Interest Rate: 20-26% annually, applied only on withdrawn
amounts
○ Repayment: Full or partial payment options
○ Eligibility: Stable income and 600+ credit score
Structured Thinking Workshop: Assignment-2
Competitive Landscape
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FinFund competes with:
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● Banks & NBFCs: Known for traditional loan products, these
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institutions offer competitive rates but with lengthy approval
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times
● Fintech Startups: Rivals like MoneyTap and EarlySalary also focus
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on urban users, providing fast disbursals and data-driven
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underwriting
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Customer Segments
1. Primary (70%): Salaried professionals (25–40) in metro areas
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seeking fast access to credit
2. Secondary (30%): Urban small business owners and younger
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customers (21–24) with good credit standing
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Market Presence
● Current Reach: Metro areas including Bangalore, Delhi NCR,
Mumbai, Hyderabad etc
Structured Thinking Workshop: Assignment-2
● Sales Channels: Mobile app and partnerships with e-commerce
platforms and mobile wallets
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Quarter-End Meeting Transcript
Meeting Date: October 15, 2024
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Attendees: Ramesh (CEO), Megha (Finance), Rohit (Operations), Sonia
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(Marketing), Karan (Product)
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Transcript Excerpt: of
Ramesh (CEO): “Revenue growth is slowing in current markets
primarily because of low loan approval rates due to our stringent
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approval criteria, and regulations cap our ability to increase interest
rates. We need to explore avenues for growth, focusing on both
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potential new market segments and deeper engagement in our
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existing ones. We do have a very strong base of lenders, so money
supply shouldn’t be an issue.”
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Megha (Finance): “Since costs are steady, our primary need is revenue
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growth. One possibility could be expanding into rural or semi-urban
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areas. However, we’d need to invest in customer education and build
partnerships with local institutions to support this move. Additionally,
while we figure out ways to reduce the stringency of loan approval
criteria we should ensure that we don’t increase our percentage of bad
debts.”
Structured Thinking Workshop: Assignment-2
Rohit (Operations): “Entering rural and semi-urban markets would
certainly come with its own set of challenges. Trust-building is key, and
we'd likely need to collaborate with microfinance institutions or banks
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to overcome these barriers effectively.”
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Sonia (Marketing): “Urban marketing costs are climbing due to
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increased competition. However, reaching rural and semi-urban
customers might require a different approach.”
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Karan (Product): “Expanding into rural and semi-urban areas might
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open new opportunities. However, we lack detailed data on the
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financial behaviors of these segments, and further research would be
essential to understand the demand there.”
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Ramesh (CEO): “At this point, we should narrow down our focus to two
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potential growth strategies:
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● P1: We could explore the opportunity to enter rural and
semi-urban areas, leveraging localized partnerships and targeted
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campaigns to build awareness and trust (go wider with the same
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product)
● P2: Alternatively, we could double down on strengthening our
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current operations in urban markets, perhaps through more
refined operational strategies, or new products (go deeper within
the same geographies and same customer segments)
Structured Thinking Workshop: Assignment-2
Let’s assess the feasibility of both options and align on actionable steps
before the quarter’s end.”
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Assignment Instructions for Students
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By 26th November (11:59 PM)
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● Problem Statement Worksheet: Complete based on the case
details
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● Issue Tree Development: Build a MECE (Mutually Exclusive,
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Collectively Exhaustive) issue tree focusing on determining all
levers for FinFund’s growth - combine both growth & market entry
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frameworks
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On 27th November
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● Live Interview Simulation: Present your issue tree, and engage in
a questioning session to refine it. During this, some branches will
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be eliminated, steering focus to promising strategies considering
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data points given by evaluators around attractiveness and
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feasibility
● Strategic Recommendations: Based on feasible growth avenues,
propose recommendations for rural/semi - urban expansion and
revenue growth in the current market.
