Albeit the service will require high human

Albeit, the service will require high human
intervention therefore digitisation of the internal
processes can be undertaken with gradual movement
to self-service modes.
Training field officers is an important part of the
operations of a Microfinance player and can greatly
impact the process of collection and disbursal. The
increasing smartphone penetration in India has
enabled various Microfinance players in collaboration
with Fintech players to provide app based e-learning
to field officers on various topics like financial literacy,
banking basics and management skills. Sonata
Finance in collaboration with Grameen Foundation
India introduced G-LEAP, an e-learning app for its
staff
03
.
Sanction and disbursement stage
Servicing and maintenance
Human touch Digital interventions Key benefits Examples
•
Decentralised
credit sanction
•
Movement of
cash based to
cashless form of
disbursements
•
Lower TAT
•
Reduced frauds
•
Avoidance of
group politics
•
MFIs like Bharat
Financial Inclusion
(BFIL), Belstar
and Madura
Microfinance are
shifting towards
the cashless route
of disbursal.
Sanction and
disbursement

23
© 2018 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
There has been a lot of positivity in the microfinance sector post the gloom that demonetisation brought upon
the sector. The sector had seen some turbulence but now the confidence has been re-instated and the sector
has continued to grow more active over the past year.
Collection model transition
Branch collection
model
Branch
collections
Centralised
(online payments)
Centralised
On field
collections
model
Transition back to a
centralised model
Figure 11: Collection model transition for microfinance players in India

© 2018 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved
24
Table 4: Collection model transition with key drivers
Model
Drivers of
the shift
Pros of the
model
Cons on the
model
Centralised
•
Collection in the office by
money lenders
•
No cost of collections
•
No social pressure on the
borrower to repay
•
Coercive measures were
used in absence of social
pressures
Branch
collection model
•
Part of SHG model
•
Everyone who
borrowed in the group
paid at the branch
(SHG group meeting)
•
No cost of collections
•
None
On field
collections
model
•
Part of Microfinance
players initial models
where a field officer went
form group meeting to
group meeting to collect
•
Social pressure on
borrowers to repay
led to high collections
•
High operating costs
•
Inefficient for the borrower
to meet weekly/fortnightly
Branch
collections
•
To improve on operating
efficiencies
•
To allow borrowers to
continue their daily
operations without any
interruptions
•
Higher operating
leverage
•
Borrowers do not
loose earnings for any