MFIs managing risk by turning to tech innovation to ensure loan repayment

The technological interventions were necessitated by the increasing cases of defaults in the microfinance segment

One of the biggest worries of microfinance institutions (MFIs) is “risk management”, or managing the risks involved in disbursing loans to customers whose credit history and repayment capabilities may not be known. However, the next generation of MFIs in India are turning to technological innovation to solve this problem. 

Take Svatantra Microfin, promoted by Ananya Birla. The Mumbai- based MFI not only does all its disbursements digitally, it is also using technology to identify the location of clients, and in loan origination, collection and risk management. The company’s risk management team has access to the longitude and latitude of the places