Can financial services be made bite-sized to deepen credit penetration?

Small can be more beautiful: Large-scale sachetisation of financial services may be just around the corner

Micro-credit is a hit. Total assets of banks, small finance banks and micro-finance institutions (MFIs) in this business now stands at Rs 2.5 trillion or thereabouts; it is projected to grow more than three-fold to around Rs 6 trillion by 2027, covering nearly 140 million low-income clients. Can financial services be made bite-sized to deepen credit penetration? The approach borrows from “sachetisation” in the fast-moving consumer goods business — shampoo being the first product to be sold this way.

Arohan Financial Services’ “Bazaar” offers credit through the joint lending group (JLG) mechanism to small-ticket borrowers. “The amounts can range between