MicroFin

Svatantra Micro Finance

1. No Poverty 8. Decent Work and Economic Growth 10. Reduced Inequalities

Overview

The organization(Svatantra) provides affordable financial and non-financial solutions to rural women who have taken up entrepreneurship. Currently, the organization has 120,249 active clients across three states (Maharashtra, Madhya Pradesh and Uttar Pradesh) and a total client portfolio of 128 crores.

They provide individual loans to customers, largely catering to the rural. The loans can be used for business requirements such as working capital or capital expenditure, among others. Ananya wants to grow her company to become a small finance bank and eventually a national bank. But now she is focused on growing the portfolio by leveraging more technology. From cashless disbursement, her microfinance is moving towards cashless collections too

Authors

KUMAR NIBIR

KUMAR NIBIR

Mayank Mangle

Mayank Mangle

School

Indian Institute of Technology Bombay - Shailesh J. Mehta School of Management

Indian Institute of Technology Bombay - Shailesh J. Mehta School of Management

Professor

Ashish Pandey

Ashish Pandey

Innovation

Svatantra team is committed to constantly develop more effective financial products so that they can provide opportunity to the needy people in the society by which they can start their own business and generate their own livelihood.

The aim is to encourage entrepreneurship where traditional banking systems cannot penetrate. They achieve this through a holistic financial and non-financial offering, with micro-credit being the main focus. The organisation is based on the tenets of entrepreneurship, transparency, and disruption through innovation.

Innovation and technological advancements are emphasised on in order to integrate, optimise, and differentiate core business processes as well as to distinguish product lines. On this front, they are the only MFI in the country to have 100% cashless disbursements.

MicroFin

Inspiration

As per Miss Ananya Birla, the founder of Svaa, the idea behind the founding of Svatanta is:

She wanted to develop a company that can become a small finance bank and eventually a national bank which will cater to the population of the rural and small towns of the country.

She also wanted to use technology to make the loan disbursement and recovering process more customer friendly so that it can be reachable to each and every individual of the country whether rich-poor or rural-urban. She is focussed on growing the portfolio by leveraging more technology. From cashless disbursement, the microfinance is also moving towards cashless collections too.

Miss Ananya Birla has done her economics and management at University of Oxford, United Kingdom. She is the daughter of the 10th richest Indian, chairman of the Aditya Birla group, Mr. Kumar Mangalam. She founded Svatantra Microfinance at the age of only 17.

Overall impact

Svatantra makes small loans to women entrepreneurs based in rural India.

· Within just a year since its inception, Svatantra Microfinance had 10,000 customers, 51 employees, 9 running branches in two states and zero repayment default. As of April 2016, the company had more than 600 employees across 70 branches in four Indian states.

· Only MFI in the country with 100% cashless disbursements. The organisation has a 100% cashless disbursement through National Electronic Funds Transfer (NEFT); and also helps its clients open bank accounts, adhering to one of its core missions of financial inclusion.

· Beginning 2016, the ICRA assigned the long-term rating of ICRA A- with stable outlook for the Rs. 100.00 crore bank facilities and an MFI grade of M3+ for Svatantra's ability to manage its microfinance activities in a sustainable manner.

· They have impacted lives of more than 120,000 people through micro finance and other products. Various stories can be found on their website where their client expresses how the micro finance provided by Svatantra has impacted their lives in a huge way.

Business benefit

  1. Svatantra offers the lowest interest rate for micro loans in the country and now operates over 40 branches in 21 districts of Maharashtra and Madhya Pradesh
  2. The organization has a 100% cashless disbursement through National Electronic Funds Transfer (NEFT)
  3. They charge an interest rate of 1.90% per month or 22.75% per annum and a minimal transaction fee of 1% of the loan amount.
  4. Currently the organization has 120,249 active clients in various states of India and a total client portfolio of ₹128 crore.
  5. The company is expected to grow to ₹ 500 crore by 2018 end due to its low interest rates and easy disbursement and collection procedures.
  6. This won the organisation a Gold Award in the start-up category at the Skoch Financial Inclusion and Deepening Award in 2014. Beginning 2016, the ICRA assigned the long-term rating of ICRA A- with stable outlook for the Rs. 100.00 crore bank facilities and an MFI grade of M3+ for Svatantra's ability to manage its microfinance activities in a sustainable manner.

Social and environmental benefit

It caters to the people from the bottom of the pyramid section to engage in entrepreneurial activities and support Small and Medium scale industries.

It offers livelihood-related loans at 22% interest rate, as compared with standard microfinance companies whose interest rates range between 25-26 %. The organisation has a 100% cashless disbursement through National Electronic Funds Transfer (NEFT); and also helps its clients open bank accounts, adhering to one of its core missions of financial inclusion. Svatantra follows the practice of cashless disbursals to borrowers through their bank accounts. Agents and field officers do not carry money with them. Joint lending groups in villages ensure everybody stands guarantee for the other. The company uses an integrated software, developed by Infrasofttech, for its loan management and accounting requirements, with branches being fully computerised. In addition, the field staff uses an Android app for updating the collection data on-field itself, on a real-time basis.

Interview

Chaya Mukund Mohrile, Customer

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Svatantra Micro Finance

Svatantra Micro Finance

Mumbai, Maharashtra, IN

Business Website: https://www.svatantramicrofin.com/index.php

Year Founded: 2012

Number of Employees: 501 to 1000

The organisation provides complete and affordable financial and non-financial solutions to rural women who are entrepreneurs themselves. They cater to the BOP ( Bottom of Pyramid) consumers which has lot of untapped potential. The organization provides affordable financial and non-financial solutions to rural women who have taken up entrepreneurship.