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Wednesday, June 29, 2016

Axis Bank is tapping the lucrative urban microfinance market



          The success of ‘Axis Sahyog ’, program in Rural Bharat has led to Axis Bank to roll out this program to the urban areas too.

The aim of ‘Axis Sahyog’, is to offer  small ticket, unsecured loans to economically active poor women.

          The End to end processing – from customer on-boarding to disbursement and servicing, is  faster, seamless and paperless.

The loans will be disbursed at the doorsteps of the borrowers, through cash, bank account or card.

Axis Sahyog is aimed at Joint Liability Group (JLG) borrowers.           

The app has the capability to reduce the TAT to 5 days from the present 12 days.
Key features of Axis Sahyog are:
  • Quick approval loans
  • Doorstep delivery
  • Collateral free loans
  • Nil Processing fees
  • Insurance for Customer and Spouse
  • Option for cash / Saving account / Card based disbursement
Besides Uttar Pradesh, the Axis Sahyog programme is hinterlands of Bihar, Madhya Pradesh, Maharashtra, Orissa, Karnataka andJharkhand.

Today Axis Bank unveiled this program for the urban poor at Pune,  under the Bank's flagship microfinance programme and the services will be delivered via its technology driven 'TAB based lending' solution.

As these loans will be disbursed under the Joint Liability umbrella, these loans will be collateral free.

The lender plans to commence urban microfinance operations in 85 branches across Bengaluru, Chennai, Kolkata and Mumbai, in addition to Pune. The loans disbursed to self-employed women, part of Joint Liability Groups (JLGs) are for income generating purposes like tailoring, catering, running kirana shops etc, with an average loan size of Rs 15,000. Axis Bank is currently providing small loans to around 8 lakh households with a total throughput of Rs. 1500 crores.

The bank has also introduced a first-of-its kind concept of 'Map module' under which the villages as well as customer touch points such as meeting place and individual households will be geo tagged and displayed on a map. This feature will help in tracking locations and delivering financial services on time and with accuracy.

Axis Bank is currently providing small loans to around 8 lakh households with a total throughput of Rs 1,500 crore and has a presence in states such as Bihar, Uttar Pradesh, Madhya Pradesh, Orissa, Karnataka, Jharkhand, West Bengal and Tamil Nadu.

Under this, the loans will be disbursed to self-employed women, part of Joint Liability Groups (JLGs) small businesses like tailoring, catering and running grocery  shops with an average loan size of Rs 15,000.

According to Microfinance Institutions Network (MFIN) data, a self-regulatory organization for the industry,  the loan portfolio of microfinance institutions (MFIs) stood at Rs 53,233 crore as of 31 March 2016, up from Rs 28,940 crore a year ago.


In April 2015, RBI eased rules for MFIs, raising total indebtedness limit of a borrower to Rs 1 lakh, double the previous limit of Rs 50,000. The new rules state that MFIs can disburse loans to a borrower in urban or semi-urban regions, the annual income limit has been raised to Rs 1.6 lakh from Rs 1.2 lakh.

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