By Naagesh Naaraayana

 

Winner of Srijan Award for Emerging Microfinance Institution-2009,Sahayata Microfinance was established as a society less than three years ago by a team of banking professionals who saw the gap in providing financial access to the economically marginalised sector of society, especially in western part of India. Today, Sahayata is considered one of the most promising Microfinance Institutions in the Indian Microfinance space.

 

Using Grameen Methodology, Sahayata provides micro loans to urban and semi-urban women, who are self-employed and operate small businesses to support their livelihood. What made Sahayata bag the Srijan Award in December 2009? In an exclusive interview with Microfinance Focus, Ajay Verma, Managing Director and CEO ofSahayata Microfinance Pvt. Ltd, sums it up in two phrases: efficient management and deployment of cutting-edge technology.

 

A former banking professional, who has worked outside the country for over nine years with companies like GE Capital etc, AjayVerma wanted to do something that was socially relevant for the underprivileged people in the western Indian state of Rajasthan, which remained backward to a large extent due to its harsh desert terrain. With a team of six friends, he started a non-profit microfinance organisation in Udaipur and in less than a year turned it into an NBFC (Non-Banking Financial Institution) registered with the country’s Central Bank.

The primary focus of Sahayata has been to recruit the best professionals, provide them intensive training and motivate them to make microfinance a viable business model than a mere mission to uplift economically backward women.

 

To motivate its staff, Sahayata has embarked upon a variety of ways like providing them Sahayata branded T-shirts, Sahayata clocks and Sahayata-branded stationery among others, which help create a feeling of pride and belonging to the company, enabling them perform their duties with dedication and responsibility.

 

To keep the borrowers (customers) happy, Sahayata has unveiled its HARDIC principle — Honesty, Agility, Respect,  Discipline, Industriousness and Care. Further, customer engagement and relationship management is one of the key reasons behind Sahayata’s success which won it the Emerging Microfinance Institution-2009 Award, explained Mr Verma.

 

On technology front, the organisation has chosen to work with the latest cutting edge technology to service its customers effectively and efficiently, reducing its cost of operation. Sahayata’s employees, known as Sahayaks, carry mobile handsets which are connected directly with the back-end operations of Sahayata for real-time transaction recording to speed up the process.

 

For the core system, they have opted for the Software as a Service (SaaS) version of Craft Silicon’s BR.Netplatform. Explaining their choice for SaaS, Mr Ajay Verma said, “The cost of buying and managing the technology as well as dependence on few skilled staff would have been a deterrent for the growth plans we have. Moreover, the harsh terrain in Rajasthan, the distance between the branches in the state and the inadequate infrastructure to connect the branches proved to be a major challenge for us. BR.Net SaaS, thus, provided a wholly internet-based application that could easily be accessed with minimal bandwidth requirements and was suitable for a state like Rajasthan.”

 

“BR.Net (SaaS) platform from Craft Silicon has worked very well. It has been deployed at nearly 60 of Sahayata’s branches, across five states with diverse geographies and demographics. Moreover, it has helped us to provide our customers a best-in-class service experience while at the same time reduced our initial IT expenditure like buying a license and developing our own IT infrastructure.” he said.

 

Each field officer or Sahayak handles an average of 515 clients in his/her portfolio, carries a mobile handset and punches in updates immediately after the collections. This helps the branches plug-in daily information and stay on-course with the lending mechanism. Therefore, it is no wonder that in less than three years, Sahayata could spread its wings to nearly 100,000 (hundred thousand) women borrowers.

 

Currently, Sahayata is in the process of expanding in the states of Madhya Pradesh, Haryana, Uttaranchal and Gujarat. It has raised funds against its equity from Bellwether (40%), Micro Ventures (32%) and SIDBI (1.7%) in the last two years.

Sahayata charges 28 per cent interest rate, on reducing basis, on its loans and keeps the transaction transparent. Adds Mr Verma: “Sahayata has passed on savings, generated through technology upgrades, to its customers by reducing the interest rates. Sahayata now enjoys a 99.9% rate in loan repayments.”

 

Speaking on Sahayata’s future plans, Mr Verma said he wanted to see Sahayata grow and expand across India – not just in size but more in providing qualitative customer-oriented service and gaining their trust and goodwill. “In two years from now, we wish to reach at least five million customers in eight to nine states in the country,” he added.

 

Like many other MFIs, Sahayata too has pilot-tested new products like education loans with assistance from SEWA Bank, micro credit for solar lanterns in Rajasthan and water purifiers. With a portfolio disbursement of Rs 125 crore (INR 1,250 million), Sahayata visualises a healthy society – educated, aware, and free of poverty and exploitation – and a social order promoting equal opportunity and self-confidence for the benefit of all individuals. The organisation seeks to achieve this by helping customers shift from despair to hope by providing financial services in a socially responsible and sustainable manner.