Delhi, July 30 2019: Satya MicroCapital Limited (SATYA), an RBI registered NBFC-MFI, has recently become the 1st MFI to cross a whopping INR 100 Crores worth of cashless collections in less than two and half years since its inception. It has also crossed a portfolio of INR 650 Cr. with over 2.85 lakh active clients – making its entry into the top 20 micro finance institutions in India.
Nearly one-third (32%) of Satya’s total collectable instalments of loans, came through cashless collections in the last three months across all the 14 states where the MFI is operational. Bihar saw more than 85% of repayment collection through cashless transactions despite facing major challenges such as network issues, intermittent authentication server & banking servers’ failures. Other states such as Odisha, West Bengal and Uttar Pradesh also saw more than 50% of their repayment collections come through cashless transactions.
Speaking on the milestone, Mr. Vivek Tiwari, MD & CEO, Satya commented, “Satya MicroCapital was established with the view of addressing the inefficiencies in the lending sector and to provide unbanked, underserved entrepreneurs in rural areas with access to advanced financial services. Our digital payment services are not only fast, safe, and hassle-free but also provide a great degree of transparency. This also checks any potential malpractice and fraud. We are delighted with the increased uptake of cashless transactions among our consumer base, as evinced in our latest collection figures through cashless means. Crossing the milestone of INR 100 Cr. for cashless collections also encourages us to keep raising the bar even higher and motivates us to drive greater adoption of our innovative services across the country.”
From cash to cashless: How Satya addressed the market need and drove cashless transactions
Having been established during the turbulent days of the countrywide demonetization drive, Satya worked on a solution that aimed to enable the shift from cash to cashless transactions – from the company to its clients (cashless disbursement) and vice-versa (cashless repayment collection). Under the leadership of its MD & CEO, Mr. Vivek Tiwari, Satya has become the trend-setter in the BFSI domain by initiating cashless collections on a pan-India level in a big way.
Satya MicroCapital carries out its cashless transactions by using biometric-based authentication through Aadhaar Enabled Payment Services (AEPS). It transfers the amount directly from the savings account of clients to Satya’s account. This cashless transaction process fulfils the objective of financial inclusion, prevention of frauds and enabling improved accessibility of efficient credit to micro-entrepreneurs.
Satya disburses all its loans – Limited Liability Loans (LLG), Consumer Durable Loans (CDL), Individual Micro Loans (IML) and Emergency Loans (EL) – in a 100% cashless manner, with loan amount being directly transferred to the client’s bank account. This avoids loan pipelining and involvement of agents, simplifying and streamlining the process to great extent.
When initiating cashless collections, Satya MicroCapital also educated the clients about financial literacy and digital payments, starting from the importance of Unique Identity (Aadhaar Card, PAN) and regularly depositing all of their earnings in the bank. It also informed them about the systematic withdrawal of money from savings account, inculcating saving habits and making regular repayments of loans from their accounts through cashless transactions. The saving habit has also helped Satya’s clients to take care of their future needs like children’s education, healthcare, festive celebrations, business expansion and emergencies, if any.
Thanks to such an end-to-end approach, Satya MicroCapital has been able to steadily increase its cashless collections over the last two and a half years. Out of the total INR 100 Cr. cashless collections, 18% was collected by the MFI in the first year of its operations, 40% in the second year and 42% during the first half of 2019.