Microfinance Institutions (MFIs) are financial organizations that provide small loans or microloans (that is below Rs. 1 Lakh) to people who do not have access to banking facilities.
The microfinance institution is playing a key role in commercial lending institutes, which are ready to take the moderate risk for better returns and provide collateral-free loans to the customers to finance their livelihood.
In 2020, the world was hit by the COVID-19 pandemic. The lockdowns implemented brought almost every business to a halt excluding the essential services. The small and medium businesses were the most affected with little or no reserves. This adversely affected the lenders, as MFI is still dependent on physical interactions with customers for KYC, collections, and disbursements.
The MFI’s liquidity framework depends on steady cashflows. After the lockdown was imposed these MFIs faced a shutdown in collections and disbursements, the effect was devastating. In May 2020, almost 98% of the accounts were under a loan moratorium. Yet as the year progressed, the MFIs proved their resilience once again by streamlining their operations and eliminating inefficiencies.
By 2021, despite the ongoing crisis the India MFI by providing its services as meeting the financial needs of 60 million customers across 28 states.
Today in 2022, MFIs are considering implementing comprehensive digital solutions and innovative ways to achieve their vision of growth and competitive advantage by understanding the need of the hour. Indian microfinance institutions are leveraging advances in technology to ensure transparency, data security, privacy, and affordability for their customer.
Nelito’s FincraftTM Core Microfinance Solution is a robust and scalable software that is helping to automate the business processes of microfinance institutions. The solution helps in faster loan processing with increased business penetration. The software also provides end-to-end field operations processes which is been covered in Smart Phone Applications for field officers.
To know more about our software, write to us at firstname.lastname@example.org