“Digitization has been a major challenge in collections in the microfinance sector as most mfi Customers do not have smart phones,” said Jiji Mammen, chief executive of Sa-Dhan, adding that the partnership will help them develop a new payment and collection system using feature phones along with the technological intervention they are providing.
As per industry reports, about 45% of mobile phone users belong to feature phones, and about 94 million people are the beneficiaries of the MFI ecosystem.
One IDFC A bank spokesperson said that there is tremendous opportunity to expand UPI services to the untapped, un-banked and under-banked user segments and this partnership with NextGen with their SIM overlay and the micro finance industry under Sa-Dhan, to reach And helps in digitizing. the user. “With the 3-way partnership, comes a host of additional benefits for the beneficiaries of the MFI ecosystem, including UPI, banking and wallets, bill payment systems, personal and merchant money transfers, and an interface capable of requesting microloans and insurance are,” said Tarun Mohan, founder of NextGen.
Government is focusing on financial inclusion through digitization. In October, Prime Minister Narendra Modi launched 75 digital banking units or DBUs, noting that if Jan Dhan accounts laid the foundation for financial inclusion in the country, fintech would form the bedrock of a financial revolution.
The Reserve Bank of India (RBI) has also issued guidelines to allow scheduled commercial banks to open DBUs. As per the circular, DBUs will be business units with specialized fixed points for delivering digital banking products and services as well as digitally servicing existing financial products and services.