Biometrics-based micro-finance provider Satya passes Rs 1B in cashless collections

Biometrics-based authentication provider Satya MicroCapital Limited has surpassed 1 billion rupees (US$15 million) in cashless collections over the past two and a half years as a central-bank approved non-banking financial company micro-finance institution (NBFC-MFI), The Economic Times reports.

Of those cashless transactions, 42 percent by value were processed during the first half of 2019, as the company grows rapidly, and Satya’s portfolio now includes 285,000 active clients holding 6.5 billion rupees ($94 million). Direct transfers from clients’ savings accounts to Satya accounts are authenticated biometrically with Aadhaar Enabled Payment Services (AEPS).

Satya has advocated for the importance of unique identity credentials, such as Aadhaar or PAN cards, and worked to educate clients on financial literacy and digital payments, according to the report. The company disperses completely cashless Limited Liability Loans (LLG), Consumer Durable Loans (CDL), Individual Micro Loans (IML), and Emergency Loans (EL) with direct transfers to the client’s bank account, to simplify the process and avoid loan pipelining and involving agents.

MFI services are available in 14 states, and Satya has collected loan instalments across all 14 in the last three months. More than 85 percent of repayment collections in the state of Bihar were cashless, despite a range of challenges including network issues, authentication server and banking server failures.

“Satya Microcapital was established with the view of addressing the inefficiencies in the lending sector and to provide unbanked, underserved entrepreneurs in rural areas with access to advanced financial services,” comments Satya MicroCapital CEO and Managing Director Vivek Tiwari in a statement. “We are delighted with the increased uptake of cashless transactions among our consumer base, as evinced in our latest collection figures through cashless means.”

The Indian government has been working to extend biometric authentication for e-KYC checks to digital financial services companies. The government has long aimed to cut down on cash dependency to curb corruption and crime, largely through the Aadhaar identification scheme.

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