Fintech solutions provider NextGen has tied up with the association of microfinance institutions, Sa-Dhan, to promote digital payments by feature-phone users in the micro finance space.
The partnership intends to help millions of feature-phone users to make digital payments under the micro finance ecosystem, a joint statement said on Sunday.
Micro finance institutions have their presence in over 600 districts in India and there is a need to bring in technology-based solutions to reduce the operational costs for these institutions and enable easy finance availability in tier two and tier three cities/rural areas of India, it said.
"In order to enable this solution, we must target the whole gamut of feature-phone users … there is an immediate need for a cohesive digital EMI collection solution to reduce their overall operational costs through the non-smart/feature phone segment," said Taron Mohan, founder, NextGen.
NextGen plans to bring technical solutions like setting up an UPI Auto pay platform for regular EMIs as an auto pay function, riding on the UPI 123Pay service platform with NPCI, he said. With the partnership, come many additional benefits for the beneficiaries of the MFI ecosystem including UPI, banking and wallets, bill payments system, individual and merchant money transfers and an interface enabling raising requests of micro loans and insurance.
"Digitization in collections in the microfinance sector has been a great challenge as most of the MFI clients do not possess smart phones. The association with NextGen will help in developing a new payment and collection system by using feature phone with the technological intervention being provided by them," Sa-Dhan CEO Jiji Mammen said.
There are about 45 million individual beneficiaries under the MFI organisations and most of them are on feature phones. Sa-Dhan is an RBI recognized Self-Regulatory Organization for Microfinance Institutions with about 150 members.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
