Microfinance Institutions Role

iPhone 16 has launched and it will cost around ₹1.19 lakhs in India. But do you know? More than 70% of these iPhones will be purchased on EMIs - especially no cost EMIs. Think about this for a minute. Why is it that you and I can buy a luxury product like an iPhone at no cost EMI, but a rural entrepreneur has to struggle to get a loan for their business? More than 80% of rural Indians still don’t have access to formal credit [Global Findex Database]. - They don't have a credit score - They are not a part of the formal economy - Banks do not have enough financial data about them These individuals are rural entrepreneurs, marginal farmers, artisans and small shop owners who need credit just like any other business. But they have to rely on money lenders who charge exorbitant interest rates (as high as 120% p.a). Rang De belongs to these individuals. This is how we are leading the financial revolution in India: - Encouraging entrepreneurship in rural households - 100% of capital goes to the borrower - Investees feel safe & secure - Provide credit to women - 4-8% interest rate p.a. We ensure this through our peer-to-peer lending model which humanizes credit for our investees. I’m happy to share that our tribe of social investors has crossed the 10,000 mark! - ₹81.26 crores disbursed - 20,000+ loans fulfilled - Active in 24 states If you haven’t experienced the joy of social investing yet, I invite you to visit our platform to get started. Visit "rangde dot in" or check out the link in the comments.

In much of the world, digital financial tools are a daily reality—used to process paychecks, pay for dinner, buy groceries, and more. But 1.4 billion adults in low- and middle-income countries still lack access to these tools.    This isn’t just an inconvenience for them; it's a barrier to economic growth and empowerment. According to a 2023 UN analysis, digital public infrastructure—including digital ID, payments, and data exchange—could accelerate GDP growth in these countries by 20 to 33 percent.    That’s where Mojaloop Foundation comes in: Their open-source software makes it possible for countries to build inclusive digital payment systems that allow anyone with a mobile phone to send and receive money securely, instantly, and affordably. This has the potential to drive economic inclusion—and open the doors to financial freedom—for billions.

Microfinance is at an inflection point. In just 15 minutes, Vijay Mahajan – widely regarded as the father of microfinance in India – lays out a bold new path forward: - A shift from rigid EMI-based loans to cash-flow-linked, flexible finance and micro-equity. - A new class of financial products designed to truly serve micro-enterprises - and scale sustainably. Watch this video if you are in microfinance, MSME lending, fintech, financial institution, policy, government, or impact investment. This isn’t just a conversation - it’s a strategic blueprint for the sector’s next chapter. Key insights from the video: - ₹6 trillion disbursed to 6.5 crore borrowers—but the surge in NPAs is now a loud signal that one rigid loan product can no longer meet the evolving needs of the sector - Fixed EMI loans are choking the growing micro-businesses - Entrepreneurs need patient capital—especially in startup, growth, and shock recovery phases - A new product: repayment as a fixed % of cash flows—automatically pausing in lean months - Digital rails (UPI, GST, etc.) now make cash flow tracking feasible - A 3-year pilot yielded a consistent 12% net IRR—proof this can scale - A call to action: RBI, MFIs, NBFCs & Banks must pilot this model The 15-page policy paper that expands this vision is linked in the first comment. If you care about reimagining microfinance and unlocking MSME growth, start here. Watch now. Let’s rebuild better. #flexiblefinance #microequity #patientcapital #MSME #microfinance #financialinclusion #vijaymahajan #policyinnovation #impactinvesting #digitouch #gamechanger #innovation

In 2021, I became the first woman to head a unicorn in Israel, AKA Startup Nation. In many parts of the world, women are excluded from even the most basic financial services, so leading a fintech company is far from their reality. United Nations data estimates that 3.8 billion women live in the world, 50% of which are adults. According to the World Bank’s Global Findex Database, 1.4 billion of those 1.9 billion adult women, are unbanked. That’s 73.65%. Visit that statistic again. It represents a disturbing gender gap in financial access, with women being far less likely than men to have bank accounts or access formal financial services. This financial exclusion has personal impact. It diminishes women’s economic empowerment by restricting access to education and limiting their potential for personal growth and independence. It makes women more financially dependent, and therefore, more vulnerable. There's economic impact, too. Research by McKinsey highlights the economic loss due to financial exclusion of women, noting that closing the gender gap in labor force participation could add trillions to global GDP. Financial inclusion isn’t just a matter of equality – ensuring the same opportunities for all. It’s a matter of equity - ensuring women have the tools and access they need to fully participate in the global economy. That’s where technology enters the picture to level the field. The rise of mobile banking is a great example of innovation enhancing financial inclusion. According to a report by the International Finance Corporation, mobile money accounts are more popular among women in regions like Sub-Saharan Africa, where access to traditional banking is limited. Various fintechs provide financial literacy resources, helping women understand financial products, budgeting, and saving strategies. Other solutions include AI-driven platforms that offer personalized recommendations and advice, empowering women to make informed financial decisions. Aside from personal apps and solutions, fintechs can facilitate community-based lending and saving initiatives, allowing women to support each other through group savings or microfinance schemes, fostering a sense of solidarity and shared purpose. This International Women’s Day’s theme is "accelerate action". In my mind, nothing accelerates action like innovation. As we mark International Women's Day, let’s advocate and innovate to enhance financial inclusion for women worldwide. #IWD2025 #financialInclusion Papaya Global

Why Local Development Needs Local Capital Small developers are doing some of the most important work in our cities, bringing life back to vacant lots, rehabbing main streets, and creating new housing at a human scale. But while their projects are often the most responsive to community needs, they’re also the hardest to fund. Because the truth is: our capital systems aren’t built for small-scale development. The Funding Gap Traditional banks and investors like predictability and scale. They want projects that fit a formula, big enough to absorb risk, backed by deep equity, and secured by institutional guarantees. That might work for large developers with national portfolios. But for local builders trying to transform a single block, that system is a dead end. A duplex, a mixed-use corner building, or a 10-unit infill project might mean everything for a neighborhood, but it often can’t get financed under conventional terms. And without capital, even the best ideas never leave the sketchbook. What’s Missing Local developers don’t lack skill or vision. They lack patient capital, funding that understands context, timing, and community value. We need financial tools that see beyond spreadsheets: -CDFIs (Community Development Financial Institutions) that invest in people, not just projects. -Credit unions that know the neighborhoods they serve. -Local investment cooperatives that allow residents to become stakeholders in development. -Public-private funds that reduce barriers for emerging and BIPOC developers. These institutions create an ecosystem where capital works with community, not against it. The Power of Proximity When capital is local, it behaves differently. It’s more flexible because it’s invested in shared outcomes. It’s more forgiving because it understands the long game. It’s more equitable because it values who’s at the table, not just what’s on the pro forma. Local capital can bridge the trust gap between developers and neighborhoods, because it keeps wealth circulating close to where it’s created. Why It Matters Cities that want equitable development can’t rely solely on policy reform. They need to reimagine finance. Because without access to capital, local developers can’t build. And if they can’t build, communities lose the ability to shape their own future. Capital isn’t neutral. It decides what gets built, who builds it, and who benefits. If we want to see more neighborhood-rooted, community-driven projects, we have to fund them the same way, locally, patiently, and with purpose. What’s one example you’ve seen of local capital helping small-scale or community developers succeed?

Driving Financial Inclusion: The Next Steps Financial Inclusion ensures individuals and businesses can access financial services, fostering economic growth. While India has progressed through digital advancements, innovative credit models, and supportive policies, more efforts are needed—especially in rural areas and among women. Expanding Digital Access Reliable and affordable internet is crucial for financial inclusion. BharatNet, India’s largest rural telecom initiative, will connect 2.5 lakh Gram Panchayats with broadband, while TRAI’s proposal to cap broadband costs will enhance affordability. These initiatives will bring financial services closer to rural communities, ensuring accessibility. Empowering Women Through Credit Enhancing financial access for rural women is essential. Over 54.5 crore Jan Dhan accounts have been opened, with 57% belonging to women. However, women hold only 20.8% of total bank deposits, with rural women accounting for 30%. The number of women borrowers has grown at a CAGR of 22% since 2019, with 60% from semi-urban and rural areas. Traditional credit evaluation methods often exclude women engaged in informal work. Fintech innovations, mobile banking, and AI-driven credit models are bridging this gap by offering a more inclusive assessment of creditworthiness. Alternative credit models focused on ability and intent to repay will enable more women entrepreneurs to access financial support, driving economic participation. YES BANK's Commitment A truly inclusive financial ecosystem requires innovation, partnerships, and financial literacy. At YES BANK, we are committed to financial empowerment by leveraging digital solutions and community outreach. YES BANK is driving financial inclusion through #DigitalBankingUnits (DBUs), which provide seamless financial access in remote areas, and #YESMoney along with our #BusinessCorrespondent (BC) network, which bring essential banking services closer to underserved communities. Additionally, our AI-driven credit assessments for MSMEs enable faster loan approvals, while financial literacy initiatives equip individuals with the knowledge to make informed financial decisions. A Collective Effort for Financial Inclusion Achieving financial inclusion requires collaboration across industries, policymakers, and financial institutions. By leveraging technology, financial literacy, and innovative credit models, we can build a system that empowers individuals and businesses to participate actively in the economy. An inclusive financial system doesn’t just enable growth—it fosters resilience, opportunity, and long-term prosperity for all. #FinancialInclusion #DigitalBanking #WomenEmpowerment #RuralBanking #FintechInnovation #MSMEs #BankingForAll #EconomicGrowth #CreditAccess #FinancialLiteracy

Economic growth in rural India is stifled due to limited banking infrastructure. Banking correspondents, who are the face of the Aadhaar-enabled Payment System (AePS) need a steady cash flow to carry out their functions. The lack of secure cash-handling systems forces rural residents to keep cash at home instead of putting money into banks and other financial services. Thus, local businesses are impacted due to a lack of cash. To ensure savings and investments enter the formal economy, an effective cash management system in rural India can work at Kirana stores or those offering AEPS services. In these centres, local businesses and individuals can deposit cash, which is counted and stored in secure vaults or storage facilities to prevent theft. By enabling local stores and banking correspondents to serve as trusted financial agents, we can simplify loan repayments, ensure secure cash handling, and promote a smooth transition to digital payments in rural areas. This approach not only empowers small businesses but also transforms rural communities into key drivers of India’s economic growth. The future of financial inclusion lies in creating secure, accessible, and community-driven financial ecosystems where every individual, no matter how remote, can participate in the digital economy. Read more on how we can drive sustainable growth in rural India through effective cash management systems. Ramesh Venkataraman Venkatram Jayanthy Rashmi Aggarwal CA. SUNIL KAPOOR MRUTYUNJAY MAHAPATRA Ram Rastogi 🇮🇳 Rohit Ahuja Harsh Mittal sameer nagpal Usha Murali Kuldeep Pawar Atul Tiwari #DigitalWallets #UPI #FinancialInclusion #FutureOfPayments #FinancialInclusion #RuralEmpowerment #CashManagement #DigitalPayments #RuralEconomy #EconomicGrowth #SpiceMoney #InclusiveFinance #FintechForGood #EmpoweringCommunities

The Current Embedded Finance Landscape 💡 Financial services companies have a unique opportunity to address societal issues by serving new markets. They are in a position to impact almost every corner of the economy and proactively rebuild trust with those who have been historically underserved. Embedded finance is a significant and growing market opportunity, and it’s opening new avenues for firms to increase their footprint and expand into underrepresented markets. Embedded finance capabilities and solutions include: 💳 Embedded payments: Embedded payments provide convenient experiences that enable customers to pay for services during the checkout process. 🛡 Embedded insurance: Embedded insurance allows customers to add insurance coverage to products or services at the point of sale. 💰 Embedded lending: Embedded lending provides customers with flexible financing offers to borrow and delay payments at the point of sale. 📈 Embedded investing: Embedded investing enables customers to grow their assets in a simple process, with low barriers to entry. 🎯 Embedded banking: Embedded banking provides customers and users with the capabilities of a bank within the distributor platform, so they can receive income and access funds faster. 📊 Embedded financial health: Embedded financial health allows customers to advance their financial literacy, financial access, or financial health by building credit and receiving feedback on spending habits. Below are three principles financial services firms can embrace to win underserved customers. 🙋♂️ Elevate financial access Underserved and underrepresented populations have likely faced rejection or exclusion from financial services in the past, and hope for access to services that are better designed, welcoming, and take into account their circumstances. Examples of features that can resonate include low to no fees, flexibility with non-traditional employment situations, and not requiring unnecessarily lengthy applications. 🔎 Embed education and support Services that help enable long-term goals, stability, and financial wellness are differentiating for underrepresented groups. These services include extended hours, comprehensive digital services, relevant financial education, personalized up-scaling of products, and support to help them balance their long- and short-term needs. 📱 Design intentional experiences Underserved groups are looking to be met where they are. New solutions that clearly communicate how and when fees are charged, balance flexibility with mutual accountability, and reward good financial habits can go a long way in establishing trust. Financial services organizations can also establish an easily navigable marketplace to improve connection and announce new services. Source: Deloitte - https://t.ly/Y6Cto #Innovation #Fintech #Banking #OpenBanking #EmbeddedFinance #API #FinancialServices #Payments #Insurance #Lending 

Microloans typically are not accessible to the most vulnerable people. World Food Programme's SheCan changes that - and has just launched in Iraq! 🚀 🚀 Through collaboration with Micro-Finance Institutions (MFIs), SheCan Iraq offers accessible and affordable loans, ensuring that those previously excluded from formal finance can now access formal finance to grow and diversify their business activities for the first time. And it uses digital wallets to extend financial services to remote populations. If you want to know more, read the latest blog (link in comment) #financialinclusion #Iraq #innovation WFP Innovation Accelerator

Is the Indian P2P lending industry at the brink of a new regulatory crisis?🤔 (VIEW EXPRESSED ARE MY OWN and don’t reflect that of any organisation that I am associated with) “8 % returns p.a with draw anytime!”, “12% returns p.a, just 2 month lock-in!” We all have seen such lucrative investment offers on popular finance apps in the past few months, and many of us (myself included) have invested in these asset classes as well. I’ve somehow always found this to be a “too good to be true” scenario, But what exactly is going on behind the scenes? 🤔 How exactly are these entities offering such lucrative returns for such short lock-in periods, is there truly some fintech innovation? Or is this just a result of an over engineered financial product with a highly skewed invisible risk metric? 🫥🤔 Here’s the breakdown:🔮 - The entities that are offering these lucrative investment opportunities on the popular Neo-banking apps/Financial services apps are rbi regulated, NBFC-P2Ps. - They enter a sourcing arrangement with the popular fintech apps to leverage their large user bases. - What’s in it for involved parties? - Fintech apps: Fintech apps who have burnt huge amounts of cash to acquire a massive user base often reaching tens of millions are looking for ways to monetise the same and keep the users engaged. These investment products provide as an efficient engagement tool for the user base while also providing a revenue line in the form of value based commision. - P2P platforms: These platforms get access to a large user base in one go via these partnerships without having to burn too much money upfront. Rather than that they end up paying commissions to these apps on the value of investment that they receive these apps. (The benefit here being they’re paying out of revenue that they generate via these investments rather than paying an upfront CAC which would also have a conversion metric) - Users get access to invest in a short term/flexible asset class with returns almost 2 times that of an FD. So far so good right? Sounds like a dream come true for both parties and the users!! Here’s the catch!😆 - The lending book of a P2P NBFC has an average tenure of minimum 12 - 36 months. - The interest rate charged to borrowers can vary between 18-40% - RBI P2P Guidlines explicitly state that, i) P2P NBFC shall not raise deposits as defined by or under Section 45I(bb) of the Act or the Companies Act, 2013; ii) P2P NBFC shall not hold, on its own balance sheet, funds received from lenders for lending, or funds received from borrowers for servicing loans; or such funds as stipulated in paragraph 9; When looking at the current MO of popular P2P platforms there are two major amber flags and one RED FLAG!!🚩 (Continued in comments)👇👇 #p2plending #financewrapindia #fintech