“If you take care of employees, they will take care of your customers and the customers will keep coming back again and again,” said the famous American entrepreneur JW Marriott Sr in the 20th century. This wise counsel has been taken seriously by CreditAccess Grameen, a Bengaluru-headquartered micro finance institution (MFI), in the 21st century.

Main attractions

By providing accommodation to its young employees serving at the company’s 650-odd branches, reimbursing the cooks they hire, and giving off days on weekends, the rural-focussed MFI, which provides credit to those at the bottom of the pyramid, is trying to ensure that they give undivided attention to growing business and retaining customers, according to Udaya Kumar, Managing Director and CEO.

The MFI recruits youth, including its customers’ children, from rural areas. They have to be either graduates or should have passed 12th class. They are trained and posted 80-100 km away from their homes.

“We don’t hire from other MFIs as a policy. For 90 per cent of our employees, we are the first employer. We are building our own unique organisation culture. We have a high customer retention of 90 per cent,” said Kumar.

CreditAccess Grameen has 7,500 employees – about 6,600 in the field – and the remaining are posted at the headquarters and back-office.

“For an employee earning ₹12,000-15,000 per month in a rural location, if the basic hygiene factors (accommodation, cooking) are taken care of, he/she will give his/her 100 per cent to the job,” said Diwakar BR, Chief Financial Officer. The employees, on average, spend 1/6th or 1/5th of their salary on themselves, saving the balance, he added.

JLG members

Kumar said CreditAccess Grameen sanctions limits to members of joint liability groups (JLGs) to meet life-cycle requirements. Within the limit, customers can borrow for different purposes – for purchasing a cow; working capital for a kirana shop, grocery vendor, pan/ tea shop, food-cart; house repair/ sanitation; education requirement; and medical emergency.

Depending on the customers’ repayment record, the limits are upped every year, up to a maximum of ₹60,000. Beyond this limit, customers come out of the JLGs and take individual loans.

Loan portfolio

As of September-end 2018, CreditAccess Grameen had a gross loan portfolio of ₹5,794 crore against ₹3,937 crore as of September-end 2017. The MFI, which had 23.71 lakh customers as of September-end 2018, has a presence in Karnataka, Maharashtra, Tamil Nadu, Puducherry, Kerala, Goa, Madhya Pradesh, Chhattisgarh, and Odisha.