Ujjivan pioneered microfinance on a large scale in the Capital as there was minimal awareness of microfinance and its benefits and was the first NBFC MFI to enter Delhi in 2007 with two branches in Dakshinpuri & Madangir. After a tough beginning in 2008, field operations gained momentum and were streamlined through proper adherence to policy and meticulous follow-up of processes. With the passage of time, a large number of MFIs have entered Delhi and have cumulatively build a culture of microfinance in the national capital region encouraging economically active women to be engaged in productive jobs. But with this several new challenges have emerged for microfinance organizations, such as the mushrooming of commission agents and rising cases of overextension of credit due to unrestricted multiple lending.
“As a policy, Ujjivan does not enter areas with high microfinance penetration. We are not present in Madhya Pradesh, Eastern Uttar Pradesh and have adopted a careful approach to further expansion in Rajasthan, We shifted focused into virgin territories even at an escalated cost of operation. In addition, our credit policy restricts extending credit to customers who have borrowings from more than two MFIs,” said Vikram Jetley, Chief Operating Officer (North), Ujjivan. After the first year of profitable operations in 2009-10, Ujijvan voluntarily reduced interest rates by 1.9-2.9% per annum nationally. Its interest rates for group loan products range between 22 to 25% per annum. “Our Board endorses views of the regulators that MFIs, as social enterprises should pass on some of the benefits of scale to the customers through reduced interest rates. We are only one of two MFIs in India to reduce interest rates voluntarily in the past 6 months and we will continue to do so in the future as we scale up further,” said Samit Ghosh, Managing Director & CEO, Ujjivan.
UJJIVAN MICROFINANCE NOW OFFERS CUSTOMIZED LOAN PRODUCTS
Ujjivan has adopted a slew of measures in mature branches including improving service quality and offering customized loan products for income generation. In addition, local community development projects funded by Ujjivan have been initiated jointly by customers and branch staff. “We believe in absolute transparency and are fully compliant with RBI’s Fair Practices Code in terms of all our communications & documentation with our customers. They are allowed to join Ujjivan only when we are sure they are fully conversant with the pricing and all terms & conditions of our services. Our collection is done by our own employees who are trained in soft skills to ensure that they do not indulge in harsh collection practices. We have in place a customer complaint & redressal system and conduct exit interviews with customers,” explained Mr. Ghosh. Ujjivan also recently won the Srijan Transparency Award for established MFIs in 2010.
