SAVE (Society for Advancement of Village Economy), was envisaged to provide last-mile banking services to the unbanked and the underbanked people in the rural segment of India. SAVE became a circle business correspondent of the State Bank of India. Based on its performance, the State Bank of India gave the status of National Business Correspondent to SAVE in 2012. SAVE SOLUTIONS PVT LTD is a registered entity under Company Act 2013. SAVE made this transition in 2014 to create an enabling environment for CSP network expansion and improvement in service quality. Ajeet Kumar Singh MD, CEO, and Founder of SAVE Solutions Pvt. Ltd share insight about his venture.
Q. How did it start; what was the idea behind this?
The SAVE group of companies had very modest beginnings. In 2008, three recent graduates with a passion for social advancement got together to examine rural areas’ challenges in moving forward socially. To promote financial inclusion, growth, and prosperity, they took on the challenge of founding a non-profit organization. In 2009, a non-profit organization called Society for Advancement of Village Economy was established in Gaya, Bihar, to provide banking services to India’s unbanked. In 2010 the founders of the society came to know about the State Bank of India’s Business Correspondence module. Commencing its operations as a Banking Correspondent for SBI in Bihar and Jharkhand in March 2010, SAVE became the first BC to work with Kiosk Banking. Opening its first 2 CSPs, SAVE Solutions became the first BC to work through VSAT. At the beginning of our Banking Correspondence, Business SAVE offered only a few banking products namely account opening, deposit, and withdrawal. At this time, SAVE conducted Gram Sabhas to make people aware of opening accounts and withdrawing money.
Q. From its inception till now, how has SAVE Solutions established itself as a financial solution provider and what have been the major developments?
Over the years, SAVE became a well-known last-mile banking provider for Bihar and slowly scaled its network across all parts of India, thus becoming a pan-Indian BC entity. Its deep-rooted network of 12000+ CSPs has helped leverage various banking and financial solutions across the nation. Spanning a tenure of nearly 15 years, the organization has become a one-stop solution for a wide range of financial products and services. SAVE offers many financial products through its NBFCs, Asset BC, and HFC subsidiaries i.e. B2C and various Banking related services in partnership with various PSU and Grameen Banks with its Liability BC business i.e. B2B. The products include Secured Loans, Unsecured Loans, Co-Lending, Home Loans, and Micro Loans, while the various banking-related services include Account Opening, Cash Deposit/ Withdrawal, Pension schemes, Insurance Schemes, Agri- Tech, Fast Tag and so on. Throughout this duration, the organization has seen various major developments, which include turning into a private limited organization from an NGO to acquiring four subsidiary companies and becoming a parent organization. SAVE BC Business has a pan-India presence, while its other subsidiaries are slowly expanding from the Northern parts of India into the Southern regions, with the latest synergy with South India-based SaGgraha Management Services Pvt. Ltd. Since its inception, the organizations’ disbursement processes have always been 100% cashless, and our branches are also cashless.
Q. How is SAVE Solutions offering last-mile banking services to underprivileged populations?
SAVE Solutions was launched to provide last-mile banking services to the population in India’s hinterlands. Due to the lack of knowledge, awareness, and even documents, the rural population does not have access to formalized credit sources. Furthermore, the language differences and geographical distances create a bigger roadblock for this section of the population. We aim to make CSPs available in every Panchayat in India. We are organizing Community Meetings and educating the rural people regarding the importance of having Bank Accounts and Loans. To address this gap, SAVE Solutions is working closely with these marginalized sections to bring them under the umbrella of organized finance. The socio-economic growth enabler, SAVE Solutions, serves as Asset and Liability Banking Correspondent and Business Associate to lay inroads for premium banks in unpenetrated areas and is an NBFC for Microfinance, MSME and Affordable Housing sector.
Q. What challenges are overcome by introducing the Digital Ecosystem in NBFCs and MFIs?
NBFCs and MFIs have been aggressively pushing the idea of financial inclusion to accelerate the country’s growth, and digitalization has successfully fostered the idea. Through the developmental mechanisms of digital technology, inclusion and efficiency can be achieved meticulously. In addition, operational errors can be significantly reduced, and the process journey can be improved.
The public and private sector banks are struggling with bad loans, non-performing assets (NPAs) and mounting debts. Several NBFCs and MFIs cater to the needs of such individuals rejected by these commercial banks, leaving a huge untapped market for them to discover and provide their services. Therefore digitization allows these institutions to gather data on such people and analyze whether they fall under the category of potential customers. In addition, it will also make them understand whether the customers have been making better lending decisions.
Shifting to the digital mode of payments has been profitable for NBFCs and MFIs as it mitigates the risk of handling cash. In addition, it also saves a significant amount of time and effort in collecting and dropping hard cash.
Automation-integrated services with capabilities such as data capturing, analyzing, document archiving, tracking systems and back-end financial systems help monitor different stages of the settlements. Automation is used to handle menial and repetitive tasks, saving a myriad of costs, effort and time for the NBFCs and MFIs.
The digital ecosystem has been a way forward for the NBFCs and MFIs in terms of reaching new customers, handling operations better, and facilitating transparency. It has also given them a competitive edge over the traditional banking systems, which relied on the customers to reach them. Now, these institutions understand their customers better and can devise personalized solutions for diverse prospective customers.
Q. What is the USP of SAVE Solutions?
SAVE Solutions has enabled a path towards financial inclusion by providing all financial products and services under one roof. We have a Unique CSP (Customer service point) embedded collection process, which makes SAVE’s branches 100% cashless. We have also enabled paperless operations and provide doorstep loan disbursal and collection. We offer well-designed training and capacity-building programs for our credit users to ensure that they understand group dynamics and are judiciously able to utilize the loans. We also organize financial literacy programs for the financially illiterate and those who are unaware of banking services.
