Dvara KGFS came into existence as a financial institution with a goal to cater to all the basic financial needs of rural customers of India. Dvara KGFS aspired to be a one-stop solution for customers' wealth creation and risk management requirements by providing a combination of credit, savings, investments or insurance solutions. After setting up a line of credit products--group, individual and mortgaged-backed loans, Dvara KGFS planned to add savings and investment products to its portfolio. It aimed to bring about a fundamental change in the mindset of its customers; which was to move from relying on credit to fulfill their financial goal to relying on savings and creating a financial plan to achieve those goals. Dvara KGFS developed a data-driven algorithm that would recommend customized product packages to each customer based on their specific financial goal. Dvara KGFS also added investment and insurance products to their portfolio and piloted them through an integrated investment offering named Dvara Sampoorna Sampath Plan. The new product package was piloted in October 2019 and later rolled out in a phased manner across most of its branches reaching more than 5,000 customers to date. Presenters: Nikhil AC, Head of Liability Products at Dvara KGFS, and Sandeep Kumar, ILO Social Finance Fellow at Dvara KGFS. Moderator: Aparna Dalal (Senior Technical Officer, Impact Insurance Facility).

1. Building integrated wealth and
risk management solutions:
Experience of Dvara KGFS
Date: Tuesday / 12 / May / 2020

2. Interfacing with the webinar system
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Tell us what you think. Type your questions, even while the
presentation is going on. These will only be visible to the
presenters.

3. Introduction to webinar and speakers
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Panelist:
Nikhil AC
Head of Liability Products
Dvara KGFS
Moderator:
Aparna Dalal
Senior Research Officer
The ILO’s Social Finance
Programme
Panelist:
Sandeep Kumar
Impact Insurance Fellow
The ILO’s Social Finance
Programme

4. DVARA KGFS (KSHETRIYA GRAMIN FINANCIAL SERVICES)
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KSHETRIYA -> REGIONAL
GRAMIN -> RURAL
REGIONAL RURAL FINANCIAL SERVICES -> ONE STOP SOLUTIONS FOR FINANCIAL SERVICES IN RURAL INDIA
Personal Loan
JLG Loan
Micro-enterprise
loan
Term Life
Insurance
Accident Insurance
Medical Insurance
Gold SIP
Investments
Protection Banking
Savings Account
Transfers
Deposits and withdrawals
Remittances
Financial
Services
CreditMutual Funds

5. DVARA KGFS’ INTEGRATED RISK AND WEALTH MANAGEMENT - PROJECT
OVERVIEW
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OBJECTIVE
• To arm Dvara KGFS customers with an integrated financial management plan (a suite of credit, savings,
insurance, and investment products) tailored to support and protect their needs and aspirations
• To change the customers outlook from always credit oriented to savings oriented
• To retain customers by providing solutions for all the financial needs of the customer
APPROACH
• Design a machine learning algorithm which can analyze customer information pertaining to their:
• Personal and Household Information
• Monthly Income & Expenditures
• Credit Bureau History
• Financial Goals in life
and make recommendations on financial products that should be offered to them

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PGPD FRAMEWORK
DVARA KGFS approach to wealth management in rural India comprises of four building blocks, namely,
Plan, Grow, Protect, and Diversify (PGPD)
• PLAN: The first step towards managing wealth is creating a plan for the same. This is enabled by
performing a gap analysis to know the current financial status of the family.
• GROW: The next step is to work on how the customer can grow their money. They must devise ways
to grow their money in order to achieve their goals at the desired time.
• PROTECT: The family must PROTECT its money i.e. insure it from unforeseen debacles. Shock events
such as death, disease, or disability, which can be disastrous to their goals.
• DIVERSIFY: As different kinds of investments behave differently over a period, it is better to
diversify one’s investments, instead of just investing in one option.
DVARA KGFS’ INTEGRATED RISK AND WEALTH MANAGEMENT - PROJECT
OVERVIEW

7. ALGORITHM FRAMEWORK OVERVIEW
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INPUT DATA CAPTURE MEASURE JUSTIFICATION
Income
concentration
- # of earning
members
- Income levels
Classified as
concentrated/diversified income
sources, depending on the share of
income earned by the primary wage
earner
Higher concentration would necessitate
greater protection for the primary wage
earner
Income
volatility
- Occupation type
- Income seasonality
Related to occupation.
Seasonal/weather dependent
activities such as agriculture would
be highly volatile, while salaried
classes would be low volatile
Higher volatility households would
need help in managing cash flows
during lean times
Household
surplus levels
- Expense information
Measure of ability of household to
save, relative to their expenses
Higher surplus would improve the
ability for households to plan beyond
their day-to-day requirements
Liquid asset
holding
- Jewel holding
Measure of household's ability to
manage cashflow requirements by
liquidating assets such as jewels
High holding of monetizable assets
would imply that households can easily
manage short-term liquidity constraints
Credit history - Credit bureau data Credit behavior of the household
Good credit behavior can enable
households to take additional credit as
required

8. ALGORITHM FRAMEWORK OVERVIEW
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HOUSEHOLD GOAL LAYER
• Map Household surplus levels, cash outflow for
goals at various periods to identify required
return on surplus to achieve goals (NPV >= 0)
and compute achievability of their goals
• Identify maximum possible return from KGFS
product portfolio for the customer given
constraints around:
• Risk appetite of customer
• Liquidity
• Product features
• Protection (insurance) requirement
• Define efficient product portfolio for customer
based on the above
SOLUTION DESIGN
• Customer discussion to agree on level of surplus
customer is willing to allocate for the achievement
of their goals
Goal
achievability
Low
surplus
allocation
Medium
surplus
allocation
High
surplus
allocation
Goal 1   
Goal 2   
Goal 3   
• Based on consistency of customer behavior
toward saving for their goals, a credit boost could
be offered if customer is falling short of achieving
1 or more of their goals
• If customer’s surplus is too low, hold discussion
with them to agree on level of surplus they are
willing to allocate for wealth creation through
investment in mutual funds and Gold SIP

9. MARKET RESEARCH AND INSIGHTS
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10. MARKET RESEARCH AND INSIGHTS
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Financial goals of the customers
are more closely related with
their income level than their
surplus
Accumulation of wealth is more
important than returns earned
Majority of the customers are
willing to save USD 7 to USD 14
(₹500 - ₹1000) per month for 2
years and more
Gold is the most favoured tool of
investment for majority of the
customers
Chit funds are a known
phenomenon, but participation
is relatively low (15%)
Investment in mutual funds is
almost unheard of for our
customer base

11. CUSTOMER CLASSIFICATION BASED ON MARKET RESEARCH
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12. FINANCIAL PRODUCTS OFFERED
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13. FINANCIAL PRODUCTS OFFERED
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14. FINANCIAL PRODUCTS OFFERED
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15. FINANCIAL PRODUCTS OFFERED
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16. DVARA KGFS’ INTEGRATED RISK AND WEALTH MANAGEMENT OFFERING
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17. DVARA SAMPOORNA SHAKTI PLAN – PILOT
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• KGFS commenced the pilot of the project in
October 2019.
• Launch events were done at multiple
locations to create buzz about DSSP and make
them customers aware of the service
• The pilot was operated in 10 branches across
2 districts—Thanjavur (6) and Krishnagiri (4)—
of TamilNadu
• 3 more branches were later added to the pilot
• 1000+ households enrolled got enrolled
KGFS staff explaining product
packages to the customers

18. DVARA SAMPOORNA SHAKTI PLAN – PILOT REVIEW
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CUSTOMER VOICES
• Customers wanted to have more flexibility in their monthly contributions (“since
our income fluctuates so should our monthly contribution”) – additional top up
option was added. It can be availed up to 4 times in a year
• The minimum investment term has been reduced to 12 months from 24 months
• Customer can choose to pay advance EMI for one month, if desired
All in all – a success. Based on the feedback received few changes were made in the final
offering

19. DVARA SAMPOORNA SHAKTI PLAN – ROLL OUT
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Customer Enrolled Net Investment
6000+ USD 50,000+
Where we stand today:
As of March 2020, DSSP has been rolled out in more than 80 per cent branches of DSSP.
NEXT STEPS
• Roll out of Liquid funds as the next investment product
• Review of the algorithm parameters based on the customer behaviour over past 6
months and make necessary changes

20. Questions and Answers
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Panelist:
Nikhil AC
Head of Liability Products
Dvara KGFS
Moderator:
Aparna Dalal
Senior Research Officer
The ILO’s Social Finance
Programme
Panelist:
Sandeep Kumar
Impact Insurance Fellow
The ILO’s Social Finance
Programme

21. Thank you!
www.ilo.org/socialfinance