This action might not be possible to undo. Are you sure you want to continue?
India Blooms News Service
Kolkata, Dec 16 (IBNS) mChek, a leading mobile payment provider, and Swayam Krishi Sangam NGO, a registered society that acts as a Business Correspondent intermediary for banks, have partnered to launch an innovative model for cash-free microfinance for unbanked and under-banked customers. Vikram Akula, Chairperson of SKS NGO, said, ³The poor in India have few secure and convenient places to save their money. The mainstream banks cannot reach these individuals, the poor must struggle with the high costs and inherent risks of operating in cash. By using mobile technology and bringing banking services to their doorsteps, we are truly extending financial inclusion to the unbanked across India.´ ³Cashless payments using mobile technology offer us a powerful tool to increase security for loan officers who today must carry large amounts of cash and are therefore the targets of robbery and violence, We also believe that the efficiencies gained by using mobile payments instead of cash can one day enable SKS Microfinance to offer better products and services to our members´, added Akula. Also commenting on the partnership mChek CEO Sanjay Swamy said, ³The vision of mChek is bring together the eco-system of partners across the banking sector, banking service providers, as well as leading Telecom Operator partners like Airtel and to serve the entire base of users ± right from Platinum customers of banks to the unbanked and under-banked base - with one common product.´ Transaction services for customers through this initiative include balance enquiries, deposits and withdrawals at SKS NGO bank intermediaries, also known as µbusiness correspondents¶; a range of payment transactions including payment to local kirana grocery shops, re-paying loans borrowed from microfinance institutions, as well as re-charging prepaid mobile phone cards.
³Things will always go wrong but that is the time, when people should trust you the most.´ With this success mantra, Sanjay Swamy has made it big in the mobile payment service industry. The CEO in conversation with Franchise India Media.
Shambhavi Anand (SA): Tell us about m-Chek. Sanjay Swamy (SS): We are a mobile payment service provider. Our focus is to enable our customers, to pay the bills through their mobile phones using their bank accounts, credit cards and debit cards. Our key partners are the major telecom players and banks in India, namely, Airtel and Tata Indicom; and ICICI, HDFC, SBI, Standard Chartered and others respectively. (SA): What inspired you to take up this concept? (SS): In 2003, I had come to India for a vacation, I inquired about the time from an auto driver and he referred to the time displayed on his mobile phone to do the needful. That kept me wondering about the impact of mobile telephony, as the incident happened when there were just 30 million mobile phone users in the nation. So you can imagine the current impact and the future potential! Since its advent in India, the mobile telephony has been booming, creating innumerable and various kinds of opportunities. To leverage the benefits of the flourishing sector, we created a business model
. over a period of time we have been able to build both trust and reputation. ticketing and some shopping. The model that we have is scalable and viable for both the parties. (SA): What are your future plans for the company? (SS): Right now our focus areas are recharge. (SA): What challenges did you face as a start-up? Given the space that we are in. Our challenge is to realise this. rapidly. We cannot afford to make mistakes. who are leaders with strong reputation in their domain. Looking from the consumers¶ point of view. But the kind of service we provide.based on mobile telephony that was sustainable. µm-Chek¶ should become a verb. not to mention the traffic jams and pollution that they endure during the process. consumer perception is very important. Customers should say the mode of payment through mobile is the best. for paying a bill. there should come a day when you assume that people use m-Chek. Big companies are able to appreciate partners. how does the model work? (SS): We have a partnership model. who have unique things to offer. Mobile payment has to win over cash-based transaction. likewise. we had to live upto their standards. What challenges do you expect to face in the future? (SS): We have a competition with the cash-based method of payment. They should use m-Chek for everyday bills. On the other hand. We have been lucky enough to establish a relationship with some of the largest companies not just in India but the world too. we needed to work with large companies. They are challenging partners to work with. (SA): How did you go about funding your startup? (SS): m-Chek is a venture capital-funded company. I felt. So as they were putting a bet on us. But they forget that it costs them their valuable time and energy. But since our team comes from the security domain we are confident about it. the Internet connectivity in the country has been gradually improving. However. we work with partners. Also. today. Like. when you meet someone you assume that the person owns a mobile phone. there was a compelling need for such a service. (SA): Considering the Airtel-m-Chek and now Tata-m-Chek relationship. costs nothing. there could not have been a better option than clubbing the mobile phone services and the Internet to form the basis of our service. Security is the main concern and non-negotiable too. which is our biggest challenge. We deal with consumers¶ money so we need to be very careful and work hard for winning their trust. one might say that cash-based transaction. But we can have more subscribers through adding more banking and telecom partners.
Every business has a growing time. Through mCheck money can be deposited in the bank and be accessible anywhere. to start our services. it could be the equivalent of the US banks¶ subprime crisis for micro lenders. in the country. who either do not have bank accounts due to lack of accessibility or because they do not find the banking system convenient (the problem of going to a branch or ATM to withdraw cash and then go out to pay bills). Also. established mainly to lend small sums to the unbanked poor to help them earn a living. anytime. who didn¶t want to be named. say there¶s potentially a huge demand for home loans among their customers. I will say dream very big. MFIs. who have bank accounts. to m-Chek it will be a sizeable amount to create an impact in the nation. do not get awed by initial success. There should be no hassle of going and withdrawing.´ said a senior official at SKS Microfinance Ltd. Though our primary focus is India. there have been requests from other markets like Srilanka. or MFIs. (SA): What advice do you have for the new entrepreneurs? (SS): To new entrepreneurs. Hemant Mishra / Mint ³This is unsecured lending. . And do not let anyone tell you that it is impossible to realise your dream.Till now we are able to provide service to the section of people. We do not know yet how to price it. India¶s largest MFI. ³It¶s a different and a difficult ball game. Bangalore: Concerns of defaults are holding back microfinance institutions. he said. from a fullfledged expansion into home loans even as they seek to turn their clientele of poor borrowers into consumers and compete with commercial banks.´ If defaults pile up. If you do not act now you will never do it. But our future plan is to bring those people under the domain of mobile payment. This will also be convenient for banks as the resources spent in running a branch will be minimised. And this is the best time in India to be an entrepreneur. Risky venture: A file photo of area managers conducting a weekly meeting at a village near Mysore. MFIs fear defaults may be higher in the case of home loans because the borrowers would be individuals and not groups. Risks are too many. Even if we are able to convert 1 per cent of the cash. At least two of seven prominent MFIs that Mintspoke to have started experimental lending for home purchases to test the waters while the rest are hesitant.
Ramachandran. ³There are a few companies set up for offering micro housing loans and they want to work with us for extending such loans to our customers. Madura Finance is offering these loans at lower rates than group loans. ³The need (for home loans) is huge. While its lending rates for self-help groups are in the range of 18-21%. in this business defaults could be as much as 2%. . which is already offering loans for leases.´ said Samit Ghosh. To attract customers. In their bid to lower risks. part of the Basix Group.´ The firm offers loans of Rs50.The official added: ³We need to be very careful as defaults would be high. water purifiers and even refrigerators and are seeking to expand their product offerings to compete with commercial lenders. Madura Micro Finance Ltd and Bhartiya Samruddhi Finance Ltd have launched pilot programmes b y giving home loans to around 100 customers each to gauge the viability of the business. ³It¶s not just about defaults. Home loans would be an extension of the consumer finance business of MFIs. and the firm insists on collateral. Still. For Ujjivan.´ SKS will launch a pilot programme of home lending. Some MFIs are considering partnerships for entering this segment. MFIs attribute their huge success to default rates as low as 0. MFIs are looking at adopting technologies that would help in eliminating cash from the system.. ³We are still in the process of judging the feasibility of this offering. Bangalore-based Ujjivan Financial Services Pvt. but not in the next two-three months. chief financial officer. We do have a demand. is offering home loans that have a duration of fiveseven years. which is doing pilots in Madurai and Salem districts of Tamil Nadu.and have involved sector experts. rents and home improvement. it is offering housing loans at 18%. Once the tie-up is in place. chief executive of Madura Micro Finance.´ said M. the firm will give home loans on an experimental basis. We are still working out the legalities . Home loans would be of a far bigger size²up to Rs3 lakh²and wouldn¶t qualify as livelihood loans that are income generating and aid loan repayments. We are looking at this. chief executive officer. we need to work out how to go about it. it¶s all in early stages of it. We have to doubly ensure that all documents are in place and insist on proper credentials.000 for home renovation and repair and Rs1 lakh for buying or constructing a house. Bhartiya Samruddhi. We also need a guarantor. who have already gone beyond their traditional role by financing the purchase of mobile phones. Ltd is in talks with a national housing company for a tie-up.000 given to community groups to earn a livelihood.000 and Rs20.. However. home loans would be a natural progression. Narayanan. MFIs have built their success mainly on small joint liability loans that could range between Rs10.´ said S.01%. Such borrowers lack collateral and the credit history that banks require. The risk of defaults is higher also because the borrowers would be individuals and not groups.
prepaid mobile recharges. book mo vie or other merchant transactions done using debit or credit cards. These mChek VISA Credit/Debit cards can be used for various performing card-based transactions like buying air travel tickets. senior general manager. Mehta. Sanjay Swamy. The mchek service can be activated on mobile phones simply by sending an SMS MCHEK to 5676709. Under the service. It was awarded the "Best Billing and Customer Care Solution" by GSM Association at 2008 Mobile World Congress. India's second largest bank. this association hugely expands the transaction environment for both ICICI Bank and mChek. "Our association with mChek will offer our credit and debit card customers yet another secure and safe option of conducting hassle free transactions online". MFIs can source loans for customers and help service these to gain experience in this kind of business." mChek is a secured mobile payment technology that enables mobiles users to access credit cards on their mobiles. mChek said. ICICI Bank announced a technical tieup with the Bangalore based mChek. Experts say MFIs are being prudent by adopting caution in entering the home loan business. to provide mobile payment services to its debit and credit cardholders. ICICI Bank. ICICI Bank customers now have the convenience of doing transactions from their mobile phones anywhere. . Ltd and Grameen Koota microfinance institution are running a pilot to implement mobile payments in the micro-credit sector. Sachin Khandelwal. 2009 In a customer-oriented move.´ said Viren H. non-banking financial companies and banks. given their lack of experience in the segment. "We are pleased to launch with ICICI Bank. ³MFIs can look at managing and sourcing portfolio for other lenders like housing financial companies. pay insurance premium. the customers would be issued encrypted electronic cards for storin these in g their mobile phones.2 and ISO 27001 certified and has been approved for adoption by the leading international electronic payment network. CEO. money transfers. said.Bangalore-based mChek India Payment Systems Pvt. The technology is PCI DSS 1. anytime and with banking grade security. mCheck Mobile Payment System for ICICI cardholders By Ankit Sharma May 28. national director at consultancy firm Ernst and Young India. Visa International for its merchants. which will help reduce disbursement and collection costs significantly. utilities pay payments.
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue listening from where you left off, or restart the preview.