FIA Global, which works with as many as 35 banks including State
Bank of India, HDFC Bank and Axis Bank as their business correspondent, is now planning to venture into direct lending, leveraging the 47 million customers it mobilized in its nine-year journey.
The financial services provider to the under-banked submitted an application to Reserve Bank of India for a non-banking finance company (NBFC) license earlier this month, chief executive Seema Prem told ET.
Founded by Prem and Sameer Mathur in 2012, the firm is looking to tap institutional investors for the first time to raise up to $20 million next financial year for its NBFC endeavor.
“We believe we will have an edge (for lending business) because of our large network,” Prem said, exuding confidence that the company would use data mining to keep the cost of customer acquisition very low and the quality of loan sourced very high. “We would use digitech cum artificial intelligence for lending.”
As business correspondent, it takes financial services such as deposits and loan products to under-banked customers in 40000 villages through 30000 banking outlets. The firm does banking transactions worth Rs 85-90 crore per day, mostly for Jan Dhan Yojana customers, the CEO said.
Banking outlets are fixed-point service delivery units, manned by either the bank’s staff or its business correspondents, where customers can deposit or withdraw cash, encash cheques and borrow money. This model has progressively obviated the need to set up brick and mortar branches making branch expansion in rural areas slow even before the pandemic, RBI said in its trend and progress report for 2019-20.