Our Solution
Observations
- India, the fastest growing major economy, a land of many opportunities, faces several challenges, in particular the vast size of the bottom of the population pyramid.
- Inequitable access to financial services has been the biggest barrier to India's Inclusive growth.
- Frictions created due to lack of access to financial resources is a major impediment to India's demographic dividend.
- Add to that Financial Literacy woes, proliferation of rural money-lenders who charge interest rates unheard of elsewhere, and limited presence of existing micro-finance institutions to meet the needs of pyramid base.
- Micro-lending is the most effective solution for furthering financial inclusion in the country.
- The lending gap left behind by traditional banking sector is depriving a major segment of our population of access to better livelihoods.
- We need to provide specialised financial services, tailored to solving the critical needs of low-income households, at their doorstep.
- Over the years, specialised micro-lending institutions have emerged to be more profitable than banks and other shadow banking players, and have outperformed on all key parameters, generating higher returns per rupee lent and lending out the same rupee many more times in the lending cycle.
Advisory
- The promise of micro-credit is to provide small loans to micro entrepreneurs to invest in their businesses, reinvest the returns and help them to grow out of poverty, and in so doing build a more inclusive eco-system.
- Through our carefully designed Micro-credit portfolio combined with our door-step reach, execution focus, and management strength, we shall bridge the gap left behind by banks and other Financial institutions.
- The lack of collateral amongst low-income households would not be a deterrent in serving them vital loans because of the power demonstrated by our lending model and our robust risk management practices.
- We understand the needs of our clients, their trials and tribulations to build a personal connect with them, and deliver our micro-loans to help them engage in productive income generating activities.
- We have learnt that the main risk in our business is not one of clients, rather of employees: Low income-households demonstrate high ethics and high moral obligation to repay debt, because of their humble backgrounds and deep-rooted values. Employees on the other hand may become dishonest and lack integrity that may lead to undesirable outcomes.
- By building stringent Best Practices for Employees, a model code of conduct, core set of principles (CHILD) as well as requiring all employees to undergo compulsory intensive trainings and orientations, we have eliminated the risk posed by employees to build a very strong business model whose value creation proposition is second to none.
