Ujjivan Financial disburses ₹1,000 cr via cashless mode

Ujjivan Financial Services, a microfinance institution, has disbursed over ₹1,000 crore through cashless method.

The disbursal of almost 50 per cent of the total loan was through cashless directly to their underserved customers’ bank accounts in cities, towns and villages.

“One of the biggest problems in the microfinance industry is dependence on cash for disbursing loans and collecting. This makes operations both inefficient, highly risky and tarnishes the objective of financial inclusion,” said Samit Ghosh, Managing Director, Ujjivan Financial Services.

“Cashless disbursements were possible by helping customers open banks accounts, activating dormant accounts and training them to operate bank accounts, including using ATMs. This was done partly through a unique financial literacy program – Diksha - in partnership with Parinaam Foundation,” he added.

During the financial year 2013-14, about 7.80 lakh borrowers availed themselves of loans from Ujjivan in semi-urban and rural areas as compared to 5.16 lakh in urban areas.

Ghosh said this rise in demand for loans from semi-urban and rural population led the organisation to open more branches in semi-urban areas, where it serves both customers living in towns and villages.

The microfinance institution closed its loan book for 2013-14 with ₹1,617 crore, registering a 44 per cent growth over the previous financial year, and achieving a pre-tax profit of ₹83.81 crore, the highest in the industry.

Ujjivan has spread its services in over 22 states through 350 branches that serve over 1.3 million active customers. It has achieved a customer retention rate of 85 per cent through its service quality and social initiatives.

“Through a series of process re-engineering and technology initiatives, the company reduced operating expenses ratio to 8.8 per cent from the 17 per cent level during 2010-11,” said Ghosh.

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