Ujjivan mulls digital steps for rural customers
Ujjivan Financial Services is looking at automation and digital initiatives to keep costs low, even as it reaches out to unbanked customers for its small bank, to be opened in February.
The bank plans to use Aadhaar eKYC (Know Your Customer) norms to open accounts, and handheld devices for verification. It also plans to have mobile automated teller machine (ATM) services to allow customers to deposit or withdraw cash up to as much as ~5,000. Ujjivan plans to open 116 branches in rural areas, as it converts its 464 centres into bank branches.
“For us, given the size and the numbers, the numbers are going to be more interesting in terms of providing services. At the same time, we have to keep our costs down. To do that, technology is important,” said Ittira Davis, chief operating officer and head of transition, Ujjivan. Ujjivan is looking for a model to replicate its microfinance initiatives, such as doorstep banking and local centres outside the branch. These centres would come up around 10 km of a bank branch, allowing customers to deposit or access cash during specific days.
“For some of customers, half a day is lost in coming to a branch. To solve this problem, we have come up with the centre meetings,” said Davis. “In terms of repayment, it has encouraged people to be more timely. Also, during the days of repayments, if you ask customers to come to the branch, they may find it difficult. By going to them, they are able to honour those commitments and there are much lesser defaults.”
Ujjivan will also look at small firms and vendors to target as customers, as vendors on Flipkart or Amazon have already established themselves and have a track record.
“We are going into micro and small enterprises as they have good business potential. This is a sector which has not been supported well,” said Davis.