This case study of Kosh can introduce the basics of strategic management and a strategic decision-making framework for start-up businesses in a competitive fintech market context. The objectives behind teaching this case study are to analyse community-based lending models to identify how they address financial inclusion challenges for underserved blue-collar segments in emerging markets; evaluate the long-term viability and sustainability of a community lending startup’s digital lending model; design and propose innovative growth strategies by leveraging technology, community trust and financial product diversification in a highly competitive fintech landscape; and assess how an inclusive business model can scale ethically while navigating the strategic trade-offs between innovation and regulatory compliance.
Kosh was a community lending start-up built on a passion to meet the financial requirements of blue-collar workers by providing collateral-free loans with flexible equated monthly instalments and little paperwork. Kosh leveraged the digital transformation in the lending space by launching the Kosh App and Kosh B-Chat to grow their footprint in the microfinance industry. With a rich client base of over 120,000 and over ₹3,500 crores disbursed in loans, Kosh had achieved its breakeven in the last quarter of 2024. But the dynamic transformation in the lending business and growing competition forced the founders to take a critical decision: to steer their growth, should they expand geographically to tap into new, underserved regions, especially rural markets? Or should they diversify their customer segments, targeting specific demographics like females or illiterate borrowers, who have historically had limited access to formal financial services? Kosh, being a start-up, was continuously exploring new product categories to expand their portfolio. But the founders were contemplating whether they should expand Kosh’s product line to include secured loans or diversify its product mix to offer a wider range of financial solutions, such as insurance or savings products, to strengthen customer loyalty and meet more diverse financial needs. Kosh leveraged the digital platform for a customer base that was essentially illiterate, which further added challenges to the road ahead for the start-up. Kosh had to take these critical decisions to ensure sustainability in a competitive and dynamic industry.
This case may be used for courses such as fintech, financial institutions and markets, strategic management, credit risk modelling and management of financial services at the post-graduate/executive level.
CSS1: Accounting and finance.
