Sub-K Impact Solutions: Reaching Unbanked Consumers in India Digitally

Set in May 2024, Sasidhar (Sasi) Thumuluri is the CEO of Sub-K Impact Solutions Ltd (Sub-K), an Indian fintech company established to provide the rural poor at the bottom of the pyramid with banking and credit services that they previously had limited access to, as traditional banks often neglected this customer segment given the relatively high cost of reaching them.

In 1996, serial social entrepreneur Vijay Mahajan had founded Basix, the first Microfinance Institution (MFI) in India to operate as a regulated non-bank finance company (NBFC). On a mission to address widespread financial exclusion, he continuously explored innovative ways to reach the unbanked. In 2010, he launched Sub-K as a digital-first subsidiary of Basix to promote rural entrepreneurship by providing banking services to small businesses in rural areas using mobile technology. Sub-K functioned as a digital financial intermediary, partnering with banks to extend their reach and bridge the gap between banks and underserved customers. Local retail merchants across the country were appointed to act as banking agents, equipped with Sub-K’s native phone app to enable banking transactions and facilitate credit access for consumers.

Positioned as a social enterprise, Sub-K seeks to be financially viable while addressing the needs of the disadvantaged. Focusing on women and using small groups with collective agreements as guarantors of the loans, it has successfully navigated its initial years and is now an established company. However, the environment has changed, with the government providing incentives for new small banks to compete in its market segment. How could Sasi ensure the future success of Sub-K?

This case may be used for graduate, postgraduate and executive education classes. Learning objectives for the students are to understand entrepreneurship typology and the need for creating another category (social) of entrepreneurship, understand the difference between the logic of the natural world as against the logic of the artificial world and understand how technological innovations (such as fintech) in knowledge economies can be used to bridge the urban-rural divide and promote inclusive and sustainable economic development.

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