A Quantum Leap

During demonetisation, microfinance institutions (MFIs) and small finance banks were forced to disburse loans by depositing the amount directly in bank accounts of borrowers, instead of the then usual practice of handing out cash on the site. The result: Within a few months, disbursals switched completely to bank accounts.

After three-and-a-half years, the financial services sector is staring at a similar transformation on the loan collection (EMI) front. “EMI collection numbers through digital channels have surprised us during the lockdown months,” says Baskar Babu Ramachandran, Managing Director and Chief Executive Officer, Suryoday Small Finance Bank. So, while not every borrower is tech-savvy, friends and relatives are often stepping in to fill the digital gap through Google Pay, Paytm and other channels.

And this is just the beginning of the journey towards 100 per cent EMI collection