More MFIs adopt cashless processes
More than 60% microfinance institutions in India have gone cashless for loan disbursals, according to a report by Microfinance Institutions Network (MFIN). The report said in fiscal 2017, over 60% MFIs disbursed loans through cashless means of which nearly 88% were through NEFT/IMPS. However, in the fourth quarter of fiscal 2017 which was the note ban period, only 39% disbursements were cash-lite transactions, it added. The report said the rise in MFIs’ cashless payment models are largely attributed to benefits of risk mitigation and increased operational efficiency that includes improved cash management practices, increased safety and staff productivity. Ratna Vishwanathan, CEO, MFIN, said demonetization and government’s push to adopt digital transactions have helped in MFIs’ transition to cashless modes. It has also helped in increasing awareness about non- cash transaction methods among the beneficiaries even in rural areas, she added.