RBL Bank has a very specific focus on the micro segment of the MSME sector. Anshul Swami, head, Retail, Inclusion and Rural Products, explains how lending to this segment brings in rewards:
In MSME funding, banks in general have been less enthusiastic about the micro segment, which is the bottom end of the sector, in spite of the government emphasizing that their fund requirements should be a priority area for banks. This has been mainly because it was rather difficult to estimate their real earnings whereas in the case of matured enterprises or slightly larger enterprises, these have been filing returns or creating balance sheets or have credit history thereby making it easy for financial services institutions to assess the risk and lend to them. However, it is this very segment, that is micro, which has been a focus area for one private bank, that is, RBL Bank.
“The micro enterprises do not necessarily follow practices such as filing returns, creating cash flow, or preparing balance sheets,” says Anshul Swami, head, Retail, Inclusion and Rural Products at the bank. “These enterprises have a lot of cash transactions as well. One part is that they do have little to no credit history, and secondly, they do not have documented financials. And a significant portion of their business is dealt in cash. So, while in other smaller ticket offerings that you see in the consumer space, like personal loans and credit cards, these get sorted out because of the credit history a bank is able to access and analyze and build mathematical models to lend to. Even without bureau reports, I can lend, because there is alternate data available in their case. However, for the micro units there is no such data available. So, the ability of an institution to actually reach out to these entities which are at the bottom of the credit structure is then based on how much one can do on the ground. So, one needs a large set of people on the ground to go and meet them, go to a shop and see how much stock he has a spot assessment,” says Swami.
HOME VISITS FOR ASSESSMENT
Denne historien er fra April 2019-utgaven av Banking Frontiers.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent ? Logg på
Denne historien er fra April 2019-utgaven av Banking Frontiers.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent? Logg på
It's a bank and a brokerage - FinecoBank
FinecoBank of Italy is a highly tech-enabled bank that is a combination of a bank and a brokerage:
A model for cloud adoption - Zurich Cantonal Bank
The bank is had opted for cloud to offer better service to its customers:
RBI Governor urges NBFCs to adhere to fair practices code
The Reserve Bank of India (RBI) Governor has urged Non-Banking Financial Companies (NBFCs) to strictly adhere to the Fair Practices Code, emphasizing sustainable growth and robust risk management in the sector.
Automated, Adaptive, Al-enabled Architecture is a must
Security heads from 2 BFSI companies reveal the key cyberfrauds and strategies to combat them:
Fraudsters too gain ground as real-time payment systems grow
There is a need for the technologies behind the real-time payment systems to gain a march over the methods of fraudsters:
Ethics & Challenges of AI in Cyber security: Navigating the Moral Maze
Even as AI is finding its place in the cyber security domain, an entirely new frontier of ethical challenges awaits.
Bangladesh Finance: 25% faster customer service; 15% higher customer retention
Bangladesh Finance, established in 1999, is a leading financial institution in Bangladesh.
Fino sparkles with technology & brand upshift
Fino Payments Bank started operations in June 2017, providing banking services to mass market customers, who are largely rural-based.
Savington Upshifts: 48% Faster, Churn down 31%
Savington International Insurance Brokers LLC, founded in 2006 by Dev Maitra, is a prominent insurance provider in the UAE.
Zoroastrian Bank: Multiple awards for being the Best
Established in 1927 by Sir Hormusjee Cowasjee Dinshaw Adenwalla, Zoroastrian Bank is a prominent urban cooperative bank headquartered in Mumbai, India.
