The sudden outbreak of Covid-19 and it’s ongoing effect induced several challenging circumstances for almost every sector around the globe, however, it also underlined several opportunities for many sectors. During this time, micro finance industry, that was already in the midst of credit and liquidity concerns, embraced some changes adapting to the future needs. To understand, how the microfinance sector navigated through the uncertainty and how the leadership strategies ensured resilience, Rashi Aditi Ghosh of Elets News Network (ENN) interacted with HP Singh, Chairman & MD, Satin Creditcare Network.
Excerpts:
Economy is gradually getting back to normal after the unlock. How is the micro finance industry performing?
The pandemic created challenges for the industry on a scale never experienced before, which led to long-term changes within the segment. Traversing through endured credit and liquidity distress amidst the pandemic, the microfinance sector has evolved during this time to adapt to the future needs of the industry. Slowly and steadily, the industry continues to bounce back, with a gradual rise in business.
Gradual easing of lockdowns has consistently helped improve the economic situation for borrowers all across India in the second half of 2021, thereby leading to recovery in the collection efficiency and disbursement across the sector. Furthermore, innovative solutions like customized loans and liquidity support from the government have helped smoothen the transition and the sector will soon recover.
SCNL has been operating for three decades now. What makes you strong and get going?
As a leading microfinance company, SCNL is focused on serving India’s under-penetrated population through financial inclusion. Our strength lies in our ability to adapt to the changing business environment. This reflected in evolving the business model over the years, harnessing the power of our technology-integrated processes, strong domain knowledge, dedicated workforce, and visionary leadership. A factor that has always differentiated us is our forward-looking vision, which has allowed us to empower and transform the lives of our 30 lakh customers.
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Our three-decade rich experience has today helped us emerge as one of the leading and trusted Indian microfinance companies, that is known to drive inclusive growth by extending credit support that help create opportunities. As a result, we have grown steadily over the years with a strong focus on customer-centricity. We have tried to offer unique and diverse offerings and the gamut of accessible microfinance solutions that have time and again helped us to serve the diverse financial needs of customers, especially women, across rural, semi-urban and urban areas of the country.
What significant changes in terms of credit scenario did you come across in the last two years?
COVID-19 hit the microfinance industry hard, presenting new challenges and risks in the form of reduced loan disbursements, repayment, and collection efficiencies. As a result, there were heavy disruptions in the domain, leading to long term changes in the credit scenario. Lockdown impacted livelihood of the microfinance clients, and the credit culture was impacted. However, the support by government and RBI in terms of moratorium and restructuring came as relief to the sector.
The lockdown led to suspension of group meetings and door to door collection was done in many cases, due to which JLG was not as strong. However, now we see a revival in centre meetings and hence the overall credit discipline.
You lead India’s largest NBFC-MFI in terms of the number of customers. How do you stay connected to your customer base? Is technology playing a part?
Microfinance works on the trust between the clients and lenders since we are a high touch business. Through the years, we have continued to create various seamless communication channels, to ensure we stay connected to our customers. Through our loan officers, we have ensured that every need, concern of our clients is heard. At Satin, we care deeply about improving and empowering countless lives.
We host regular financial literacy workshops that have helped countless customers in taking a step towards financial freedom and empowerment by imparting the right information about various government livelihood promotions and enterprise development schemes. We also undertake relief and community welfare activities from time to time. Technology also continues to play a key role in bringing us closer to our customer base, and over the last few years, we have been increasingly focusing on transforming our processes digitally. Through our technology integrated processes, we have been delivering simplified loan onboarding journeys that offer world class convenience to our customers.
We have helpline numbers through which our clients can reach us for any query or grievance. The audit and risk team carry out Surprise Centre Visits to ensure the quality of services. Our Customer Service App is a means of direct communication, where our clients can have the updated information about their loan repayment and apply for new loans. Through all these measures, we strive to give comfort to our clients and also have a brand recall value.
2021 is coming to end. Would you like to share some of your major accomplishments and learning’s during the year?
At Satin, we were able to continue to leverage our operational strengths to adapt to the future and overcome the disruptions caused by the second wave during 2021. Our technology enabled infrastructure – digital platforms and centralized processes enabled us to quickly respond to the liquidity needs of individuals as well as MSMEs during the year.
As a leading microfinance entity, we remained focused on our strategic priorities to ensure seamless business operations, deliver sustainable products to customers and create value for our stakeholders. The biggest learning was to ensure that the business has to go on evolving amidst the crisis, and we have to take care of our people.
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We were able to launch Customer Service App and website payment gateway during lockdown in order to provide all means of repayment to our clients. We also remained committed to our legacy of consistently being a future ready workplace, continuing to train our people to bring the best microfinance offerings to millions of customers. As a result, we were recertified this year by the globally reputed institute of ‘Great Place to Work’ with a trust score of 85 and were also featured in the ‘Top 30 Best BFSIs in India’. We were awarded the prestigious ‘Adam Smith Asia Award 2021’, as ‘Highly Commended Winners’ in Best New Technology Initiative for implementing UPI 2.0 (Auto debit) option, being the first in the industry to do so.
How are you planning for 2022?
Our right mix of strategies and principles continues to drive our way forward for 2022. Our strategic objectives for the term include enhancing our portfolio quality, deepening our and seamless integration of our state-of-the-art digital technology and processes. In the coming year, we plan to continue sustainable growth through our robust value creation model. Furthermore, over the last few years, we have been increasingly focusing on transforming our processes digitally, which will remain a key focus for 2022. We will also focus on increasing our share of secured loan portfolio through our fast-growing subsidiaries and continue emerging stronger.
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