Start-up Arogya Finance offers loan to meet medical expenses

MUMBAI: Two Mumbai entrepreneurs have put in their personal savings to start a venture to lend exclusively to people needing money to meet medical expenses, as rising healthcare costs open up opportunities for financial services firms to test new business models. Arogya Finance lends between Rs 20,000 and Rs 2 lakh at 12 per cent interest rate. Loan tenures range from six months to three years and no collateral is taken from borrowers.

"Our sweet spot is the real middleclass population, those with income of Rs 7,000-14,000 per month who are neither covered by government insurance schemes, nor can afford to take the burden of high medical expense at one go," said co-founder Jose Peter.

"But we are open to lend to other income bracket population too." Peter, a former chief financial officer at Tata Motors, founded the company along with Dheeraj Batra, consultancy firm IDEO’s ex-head of design.

In two year of its operation, Arogya Finance has disbursed close to Rs 5 crore to 450 patients across India. India’s healthcare system may be the cheapest in the world, but a lack of social spending and an absence of universal health insurance have triggered the need for healthcare financing. Arogya Finance is looking to tap this opportunity.