Ujjivan mulls digital steps for rural customers

Ujjivan Financial Services Ltd is looking at automation and digital initiatives to keep costs low as it reaches out to the unbanked customers when it opens its small bank in February.

The bank plans to use Aadhaar e-KYC to open accounts, use hand held devices for verification; have mobile ATM services to allow customers deposit or withdraw cash as much as Rs 5,000. Ujjivan plans to open 116 new branches in rural areas, as it converts its 464 centres as bank branches.

"For us the given the size and the numbers, the numbers are going to be more interesting in terms of providing services to large number of people. At the same time we have to keep our cost down to do that technology is a very important part," said Ittira Davis, Chief Operating Officer and Head of Transition at Ujjivan. "We are going to find lot of people( competition ) entering the space and cost efficiency becomes important for us," Davis added.

Ujjivan is looking at a model that replicates its micro finance initiatives, where it reaches out to customers, calling it doorstep banking, at local centres outside the branch. These centres would come up around 10 kilometres of a bank branch, allowing customers to deposit or access cash during specific days.

"For some of them half a day goes in coming to a branch and they lose half a day's work. To solve these problems we have come up with the center meetings," said Davis. "In terms of repayment it has encouraged people to be more timely on repayments, what happens there are days for repayments and if you ask customers to come to the branch on those days they may find it difficult. By going to them they are able to honour those commitments and there are much lesser defaults," Davis added.

Ujjivan will also look at small firms and vendors to target as customers. As vendors with sales on Flipkart or Amazon already have established themselves and have a track record of sales, which will help it grow the business.

"Going further we are going into the micro and small enterprises as lot of business potential is the as this a sector which is not been supported well. We see this as a natural growth for us. Our products will be focused on them going forward," said Davis.