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Satin Creditcare to hive of its MSME biz into a new company

Microfinance company Satin Creditcare Network, which has presence in 21 states and is set to expand to the southern states, intends to keep its business concentration at 20% in every state and plans to hive off its business of lending to MSMEs into a separate NBFC. Speaking to Banking Frontiers, the company’s CFO Jugal Kataria says in the last 4-5 years, the government has taken several initiatives to accelerate financial inclusion in the country and this has made some positive on-ground impact, yet it has the second largest unbanked population in the world. This is because banks and other formal financial institutions are yet to make an entry into remote parts of the country due to various reasons such as geographical divide, high operational costs and business infeasibility etc. “Our strategy is to bridge this gap by reaching out to economically active women in these rural and semi-rural parts and provide them unsecured income generation microloans to start or grow their business. This makes us a trusted agent of financial inclusion across the country. As of now, we have provided loans to over 3 million women across 21 states and union territories, through our 1019 branches. We have a total AUM of Rs 60.257 billion at Q1FY19,” he says.

Satin Creditcare’s core operations focus on joint liability lending in rural and semi-urban areas, with primarily fortnightly repayment options for its borrowers. Says Kataria: “The group receives the loan disbursements at a neighborhood branch. Post that, we conduct periodic meetings to collect repayments. Therefore, the borrowers do not have to travel long distance for disbursement or repayment. This is the concept of our ‘doorstep credit’. We have taken it a step further with cashless disbursements. Our focus on technology has enabled cashless disbursement in 90% of the branches and 57% of total microfinance disbursements, at Q1FY19. This not only makes the process more efficient for us, but also enhances fund accessibility for the clients.”

Kataria mentions that while microfinance lending continues to be the primary business, the company has diversified into housing finance through a fully owned subsidiary Satin Housing Finance.

– N. Mohan, Editor, [email protected]

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