Economy

Amidst second Covid-19 wave, micro finance companies find economic activities in rural areas

Anil Urs Bengaluru | Updated on May 16, 2021

Vendors wait for customers at Azadpur Mandi during the nationwide lockdown to curb the spread of coronavirus, in New Delhi   -  PTI

Also as a fallout in semi-urban areas, MSME sector is going through a major shift to digital payments

Amidst the second wave of Covid-19 pandemic, micro finance companies are witnessing a reasonable number of economic activities in rural areas where case loads are low, especially in villages. Also as a fallout in semi-urban areas, the MSME sector is going through a major shift to digital payments.

“While the Covid 1.0 was largely limited to urban regions, Covid 2.0 has spread into semi-urban regions across various States. However, in rural regions, the cases are relatively low at villages where the majority of our business is,” Udaya Kumar Hebbar, Managing Director and CEO, CreditAccess Grameen told BusinessLine.

“Considering that 85 per cent of our customers are in rural areas and predominantly into essential services, the economic impact on them will be comparatively lower,” he added.

Hardika Shah, Founder and CEO of Kinara Capital said, “Our business model is to support the underserved small businesses especially MSMEs by providing them with collateral-free loans to grow their business. We have been doing this digitally and have issued over 60,000 loans till date.”

New strategies

As Covid-19 is spreading to semi-urban areas, companies have begun to prepare fresh strategies and are gearing up to face it. CreditAccess Grameen, on its part, has not tweaked its business model. But it is handling the situation effectively, based on the learnings it had received during the first wave.

“In the event of various States declaring lockdowns, we are adhering to the regulatory guidelines from respective States and accordingly managing our branch and field operations,” said Hebbar.

Shah said, “Since the pandemic began in 2020, our business model has not changed, however, our customers have changed. The MSME sector is going through a shift by accelerating its digital adoption. They wanted more digital payment options so we are now available on 400 plus payment platforms.”

“Also in addition to our hands-on customer service, we have introduced an online loan application process for our customers. And we are holding free online learning workshops for our customers – this is something that was not possible previously,” he added.

Published on May 16, 2021

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