Lending to the urban low-income segment is complicated by their variable income, limited data, sparse collateral, and high migration. A majority of blue-collar workers in urban industrial and commercial centres are excluded from accessing credit from conventional financial institutions. Even microfinance, which has seen rapid scale-up and success in rural contexts, has only a 20-26% share of urban borrowers. 

Kosh, founded in 2019 by Aayush Goel and Sahil Bansal, offers digital Joint Liability Group (JLG) loans to India’s blue-collar workers. It leverages social ties that emerge from professional and community networks as an alternative to conventional asset-based collateral, to ease customer identification, reduce lending risk, and expand credit access to the underserved. 

This case study explores the role of social capital across the group lending journey in urban contexts, from customer acquisition, underwriting and customer engagement, to loan collections. It investigates the potential for social capital to unlock peer-driven financial literacy and pave the way for a more resilient Indian financial ecosystem.