Sub-K IMPACT Solutions is making quick and sure-footed strides in technology upgradation while empowering the workforce with education:
Sub-K IMPACT Solutions, founded on August 2, 2010, is a pioneering digital financial intermediary committed to empowering underserved populations in India. With a network of 7500 agent outlets across 27 states and 359 districts, Sub-K serves over 3 million customers, offering essential financial services like credit, savings, payments, and insurance. In the past year, under the leadership of MD & CEO Sasidhar Thumuluri, Sub-K has embarked on an ambitious digital transformation journey, achieving record growth by doubling its assets under management while maintaining low NPA levels.
Digital Transformation Journey
Sub-K has undergone a significant digital transformation in its microfinance vertical over the last 12 months. This journey began in 2021, based on groundwork done in 2019 before the onset of the covid-19 pandemic. The company identified a shift in customer profiles, recognizing that the needs of the late 1990s had evolved drastically by the early 2020s. To address these changes, Sub-K reimagined its workflows within a digital environment.
As part of its strategic entry into the digital space, Sub-K launched a customer app for EMI collections. This move was accompanied by a massive change management exercise across the organization. Over the course of 24 months, the company successfully transitioned 50% of its collections to digital mode, confirming the shift in customer behavior.
Reflecting on these initiatives, Sasidhar shared: “The last 12 months have been quite eventful for us. We have rolled out multiple initiatives, including a machine learning (ML) risk tool, remote appraisals, and virtual customer engagement modules. Additionally, we piloted digital sourcing, cross-sell, and value-added services, all of which have contributed to our overall transformation.”
Record Growth Achieved
Over the past year, Sub-K has made significant strides in achieving its highest-ever growth with minimal risk. The company’s assets under management (AUM) surged by 110% while maintaining non-performing asset (NPA) levels at under 1%. In contrast, the broader industry saw growth of around 25%, with NPA levels exceeding 2%.
A key driver of this success has been Sub-K’s digital transformation efforts, particularly in collections. “As a result of the above transformation, we have been able to register the highest growth with the lowest risk in the last financial year,” said Sasidhar. He further added: “Our digital collections crossed 60%, and all our branches have virtually turned cashless, leaving ample room for field staff to focus on sales and resolving delinquencies better.”
The company has also doubled its lending partnerships over the past year, leading to a rapid expansion of its branch network. Additionally, Sub-K introduced real-time dashboards at all organizational levels, streamlining internal processes by eliminating the need for emails and reducing discrepancies. This innovation has increased visibility into business operations and minimized the need for constant follow-ups, allowing all stakeholders to access real-time data in one place.
Credit Rating & Financial Stability
Despite the challenges of the past few years, Sub-K’s credit rating has remained stable, a testament to its solid financial standing. Sasidhar emphasized: “Our ability to raise capital, maintain portfolio quality, and uphold partner trust has kept our credit rating unaffected.” He also emphasized the pivotal role played by Sub-K’s marquee investors, whose guidance has been crucial to the organization’s ongoing transformation.
Flagship Technology Projects
Sasidhar emphasizes the pivotal role of 3 flagship tech projects in transforming the business: “Digital collections, remote credit appraisals, and virtual center meetings through Sub-K Pay and Saarthi Apps are the 3 flagship tech initiatives we launched widely across the company. These are defining projects that are expected to disrupt the way microfinance is done.”
These initiatives are already demonstrating significant impacts on both the company and its customers. Portfolios that have embraced the digital transition exhibit noticeably lower risk and greater efficiency. Notably, accounts where customers have consistently made online repayments show NPA levels less than half of those managed through cash collections. The turnaround time for loans processed via remote appraisals has also been reduced by at least 2 days, contributing to enhanced operational agility.
Productivity Up 1.5X
In terms of productivity, loan officers who adopted digital methods for collections and customer engagement, have shown a 1.5X increase in productivity. Furthermore, customers who transitioned to digital payments have largely repaid loans before due dates, thanks to the flexibility of aligning repayments with their own cashflows rather than waiting for physical collection. This represents a significant departure from traditional microfinance practices, where early payments were often discouraged to prevent cash fraud. As Sub-K continues to innovate, these technology-driven shifts are expected to redefine the future of microfinance, creating a more efficient, transparent, and customer-friendly model.
Empowering With Education
Over the past 24 months, Sub-K has made substantial strides in enhancing its HR initiatives, focusing on continuous learning and inclusivity. The company has introduced several Learning & Development (L&D) initiatives aimed at empowering employees at various levels, ensuring they remain adaptable in an ever-changing world.
One of the most impactful programs is the introduction of ‘learning credits,’ which employees can use to access L&D opportunities. These credits, equivalent to a portion of their basic salary, allow employees to enroll in various online and offline courses with no restrictions. To support this, Sub-K’s L&D team curates and publishes a list of programs that employees can choose from, fostering a culture of self-driven growth.
In line with its focus on continuous learning, Sub-K has launched a higher education program, providing employees with 100% financial support to pursue further education. This initiative is particularly aimed at lower-level employees who were unable to complete their undergraduate studies due to financial constraints.
Female-Only Town Halls
Sub-K’s commitment to inclusivity is another key HR focus. The company has established clear KPIs across all levels to improve the gender mix in its workforce, acknowledging the unique challenges in hiring and retaining female employees, particularly in field roles. To address these challenges, Sub-K has implemented several initiatives to ensure that female employees feel heard and supported.
Regional nodal offices have been set up to regularly engage with female colleagues and understand their concerns. Sub-K also organizes quarterly female-only town halls and leadership talks, which have been met with great success. In addition, anonymous surveys are conducted to gather candid feedback, ensuring a comfortable and fair workplace for all.
These efforts have not only improved retention rates but have also contributed to better gender balance 9within the company. Sasidhar concluded: “We are striving to become an inclusive organization. Gender is a difficult subject at workplaces. We take this seriously.”
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