Albeit the service will require high human intervention therefore digitisation

Albeit the service will require high human

This preview shows page 29 - 32 out of 38 pages.

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 staff03.Sanction and disbursement stageServicing and maintenanceHuman touch Digital interventionsKey benefits Examples Decentralised credit sanction Movement of cash based to cashless form of disbursementsLower TATReduced 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
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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 modelBranch collectionsCentralised (online payments)CentralisedOn field collections modelTransition back to a centralised modelFigure 11: Collection model transition for microfinance players in India
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© 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 reserved24Table 4: Collection model transition with key drivers ModelDrivers of the shiftPros of the model Cons on the modelCentralisedCollection in the office by money lendersNo cost of collections No social pressure on the borrower to repayCoercive measures were used in absence of social pressures Branch collection modelPart of SHG modelEveryone who borrowed in the group paid at the branch (SHG group meeting)No cost of collectionsNone On field collections modelPart 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 collectionsHigh operating costsInefficient for the borrower to meet weekly/fortnightlyBranch collectionsTo improve on operating efficienciesTo allow borrowers to continue their daily operations without any interruptionsHigher operating leverageBorrowers do not loose earnings for any
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