FINO Fintech Foundation gets mandate to form 700 Self Help Groups in Bihar

Friday, 22 February 2013

Pioneer in micro banking technology helps service over 80,000 SHGs in the country; FINO Fintech Foundation services close to 55 lakh customers in the state

India’s largest business correspondent network operator and banking technology service provider FINO PayTech has today announced that it will soon be expanding its presence and services in the state of Bihar. This announcement comes close on the heels of FINO Fintech Foundation, an arm of FINO PayTech, getting the mandate from NABARD for Self Help Group SHG) formation and promotion in the state.

FINO Fintech Foundation (FFF), a Section 25 Company, carries out branchless banking services through business correspondent (BC) agents for banks, governments and other financial institutions. This entity has been given the mandate to form and promote 700 SHGs in Khagaria and Begusarai districts – 350 in each district. FINO PayTech already has a network in these 2 districts servicing around 3 lakh banking customers. The company will leverage this network for the new NABARD mandate.

Announcing the development, Mujahid Ahsan, Vice President (Products), FINO PayTech said, “We have been working in Bihar since 2009 providing banking, insurance and electronic benefit transfer services. Our expertise in the SHG space gives us a strategic advantage in forming groups and enabling meaningful financial inclusion in the state. The mandate from NABARD further reiterates the efficiency of our tech-enabled last mile delivery mechanism. We are pleased to be associated with an organisation of such stature and are keen to extend our portfolio of services in Bihar.”

“The new project named “FINO Unnati” allows FFF to form 700 SHGs which predominantly comprise women. In its initial 3-year phase the project would benefit over 12,000 individuals directly in 2 districts of Khagaria and Begusarai,“ added Ahsan.

FINO PayTech has been in SHG space since 2008. Through its robust technology and channel operations,FINO facilitates savings and credit transactions for 2,000 SHG groups for Andhra Bank in Andhra Pradesh. FINO also provides smart card technology to SKDRDP to service 70,000 SHGs linked to Union Bank of India and State Bank of India in Kerala and Karnataka. Recently, FINO PayTech has tied up with ICICI Bank to provide technology to service 10,000 SHG Groups in Kerala, Karnataka and Tamil Nadu.

SHG model has a great scope in many Indian states, Bihar in particular. According to a study released in 2012, Bihar had a share of only 4% of all SHGs with bank linkages in India. It also states that the total SHGs stand at 2.15 lacs which is way below the potential of the entire state. There are various reasons for this, some being skewed distribution of SHGs across the districts, weak infrastructure that restricts outreach and effective support to groups, increasing costs and low efficiency, fund constraints for startups and the like.

In addition to facilitating SHG formation, FFF would provide other financial products like microinsurance, micro-pension, mutual funds etc to the SHGs. FFF also provides micro insurance (Rashtriya Swasthya Bima Yojana - RSBY), banking, electronic benefit transfers (EBT) for MGNREGA and pension payment services to close to 55 lakh people in 45103 villages across 22 districts of the state through a network of 437 agents. RSBY is a major project for FFF in Bihar. The company also plans to provide services for EBT for the various central and state government schemes in the state of Bihar.

Additional info about SHGs:

SHGs are group of women usually comprising 15-20 women in which office bearers are chosen unanimously out of the group and they manage the savings and lending of the group.

FINO Fintech Foundation appoints an Animator, who forms the group and ensures that the group is meeting on regular basis, there is proper book keeping of accounts and constant due diligence.

SHGs are not only a source to save money but also have acted as a tool of social change. It has resulted in women gaining confidence and respect among their family and within their society. With the collective pool women can avail loans at lower interest rates and at a later date the banks are willing to extend loans at favourable terms depending upon their credit assessment.

FFF’s Self Help Promotion Initiative (SHPI) would involve SHG formation, opening of savings accounts for SHGs as well as individual members, tech enabled SHPI monitoring, facilitation of savings & loan transactions and facilitation of credit linkage of SHGs to bank. All these activities help provide a complete solution in SHG bank linkage for banks under a scalable, efficient and cost effective operations model.

As the pioneer in creating payments technology systems for facilitating branchless banking and effectively making BC model work, FINO PayTech has set benchmarks. Today, it reaches out to and impacts the lives of over 55 million customers through 39,000 customer service points spread across 26 states.

About FINO PayTech:

FINO PayTech is India’s largest business and banking technology platform with extensive service delivery network enabling Financial Inclusion. FINO PayTech, created by a consortium of banks and other sectoral entities, works closely with banks, insurance companies and Governments in facilitating access to financial services to the unbanked and unnserved segments of the population. It services over 55 million customers spread across urban and rural areas in the country providing a range of financial services viz savings, remittance, insurance, credit etc. FINO PayTech aims to provide financial services using all available platforms that helps reach a large section of the population in an affordable way. (