Financial Inclusion Initiative – VECTOR FINANCE PRIVATE LIMITED
The best way to show your appreciation for this project is to click some advertisements and keep a count of how many you clicked. You will be asked for the number of advertisements that you clicked before you can vote. The money generated through this supports our social action.
Boosting Women’s Entrepreneurship and Local Employment
Problem
- Challenges in providing loans to underserved women without requiring collateral.
- Difficulty in fostering women entrepreneurship and enhancing financial literacy among women.
- Issues in creating job opportunities for rural youth and encouraging their participation in organizations.
- Problems related to implementing digital solutions for sourcing and servicing customers.
- Ensuring that women in semi-urban and rural India have equal chances to demonstrate their capabilities and contribute financially.
Solutions
- Support and incentivize women to start and grow their businesses through targeted programs and resources.
- Provide thorough training for staff and women entrepreneurs on financial management and business processes.
- Train women entrepreneurs to use digital platforms for managing their businesses and handling loan repayments.
- Hire and develop rural youth for entry-level positions, providing them with training and opportunities.
- Track and ensure the proper utilization of loans by women entrepreneurs to confirm that funds are used for their intended income-generating purposes.
Solution
- Women have gained more decision-making power within their families.
- Women entrepreneurs and microfinance borrowers have enhanced their financial knowledge.
- Family businesses have expanded with financial support from Vector Finance.
- Increased disposable income has improved living conditions and child education.
- Rural youth have been employed as field officers, creating job opportunities.
Challenges
- Natural calamities and the COVID-19 pandemic disrupted operations.
- Difficulty in attracting funds from nationalized banks constrained growth.
- High entry-level staff turnover led to increased operational costs.
- Limited infrastructure in target areas affected service delivery.
- Complex regulations posed challenges to scaling operations.
SKOCH Award Nominee
Category: Financial Services
Sub-Category: NBFC & MFI – Financial Inclusion
Project: Financial Inclusion Initiative
Start Date: 6-28-2019
Organisation: VECTOR FINANCE PRIVATE LIMITED
Respondent: Rahul Johri
https://vectorfinance.in/
Level: BFSI – 2
Video
See Presentation
Gallery
Case Study
Booasting Women’s Entrepreneurship and Local Employment
Problems
The project faced several challenges, including limited access to collateral-free loans for underserved women, a gap in promoting women entrepreneurship and financial literacy, and difficulties in generating rural youth employment. Additionally, digital initiatives needed to be implemented to effectively reach and service customers in semi-urban and rural areas.
Solutions
To address these issues, the project established a strong operational framework, including securing support from 14 lenders and maintaining staff during the COVID-19 pandemic. It focused on extending financial services to women entrepreneurs and providing comprehensive training in financial management and digital tools. Skill-based incubators and a dedicated branch network were set up to reach remote areas and foster local economic growth.
Outcomes
The project led to increased women’s independence in family decision-making, improved financial literacy among women entrepreneurs, and expanded family enterprises due to financial support. Enhanced disposable income directly improved living standards and child education. The project also proved successful in reaching under-penetrated geographies with essential financial services.
Challenges
Challenges included dealing with natural disasters and the COVID-19 pandemic, which disrupted operations. As a company of low vintage, it struggled to attract funds from nationalized banks. High turnover of entry-level staff led to increased operational costs, and limited infrastructure in target areas affected service delivery. Regulatory complexities also posed obstacles to scaling the operations effectively.
Innovation
The project innovated by establishing a branch network in underserved areas and providing doorstep financial services. It used a Joint Liability mechanism for collateral-free loans, leveraging group responsibility as social collateral. This model enabled quick access to financial support for entrepreneurs with limited bank access and created jobs for rural youth, enhancing local economic development.
Opportunities
The project has opened several opportunities for Vector Finance. With the potential to expand its portfolio from Rs 480 crore to Rs 1500 crore, the company can significantly increase its market presence. The planned expansion into new states offers further growth, aiming to become one of the top 5 NBFC-MFIs. The ability to replicate existing successful processes across branches supports scalable growth, enhancing operational efficiency and broadening the impact of their financial services.
Summary
Vector Finance’s Microfinance Project aims to boost financial inclusion and support women entrepreneurs in underserved areas. By offering collateral-free loans and doorstep services, the project addresses key challenges and fosters economic growth. Innovations like group-based loans and local branch networks have driven significant social and economic improvements. Looking ahead, Vector Finance plans to expand its reach and increase its market presence.
For more information, please contact:
Rahul Johri at rahul.johri@vectorfinance.in
(The content on the page is provided by the Exhibitor)
The best way to show your appreciation for this project is to click some advertisements and keep a count of how many you clicked. You will be asked for the number of advertisements that you clicked before you can vote. The money generated through this supports our social action.