Tata Sons chairman emeritus Ratan Tata, Infosys co-founder and Aadhaar architect Nandan Nilekani, and former finance secretary Vijay Kelkar have joined hands to start a microfinance venture which aims to lend to the poor. The microfinance model was made famous by Nobel laureate Muhammad Yunus.
Named Avanti Finance, the company will apply to the RBI microfinance licence, and hopes to launch operations before December 3. In a joint statement, Tata and Nilekani said that they are bringing their investments from their respective "philanthropic capital", and "any gains will be reinvested in philanthropic causes".
Besides Tata, Nilekani and Kelkar, Tata Trusts managing trustee R Venkataramanan will also be part of the venture. The statement, without disclosing the founder-directors' investments in Avanti, said a senior leadership team has been put in place. Avanti will be a technology-enabled financial inclusion vehicle.
This is perhaps the first venture Tata is building from the ground up after his retirement as Tata Group chairman in December 2012. So far, the septuagenarian has been putting money in existing companies spread across e-commerce and social impact sectors.
Nilekani, whose passion is technology, has also been backing transformative business ideas that would solve problems for the country. "My participation in Avanti is more driven by social motivation rather than anything else...technology is an important differentiator and allows us to make a difference in many ways than one," Nilekani said. Currently, noted economist Kelkar is on the board of Tata Consultancy Services, the most valued company in India.
"The aim is to leverage on the social sector presence of Tata Trusts and other like-minded partners and the rapidly evolving India Stack (Jan-Dhan - Aadhaar - mobile), UPI and payments bank ecosystem. Avanti would use this ecosystem and will innovate on product design in consonance with the indigenous needs, to deliver seamlessly for the end consumer," the statement said. Of late, microfinanciers have started to disburse loans — the maximum ticket size being Rs 15,000 — directly to low-income people using technology in a bid to cut lending rates. Currently, most micro lenders use NGOs and local self-help groups to disburse funds and charge rates of up to 24% per annum.
The microfinance industry is growing at a breakneck speed after it nearly collapsed six years ago. In 2010, a number of borrowers committed suicide in Andhra Pradesh — which used to account for the bulk of the industry's loans — to escape coercive tactics employed by microfinanciers, prompting the RBI to cap usurious interest rates and high-margin fees. Recent data from the industry trade body MFIN showed that during the January-March period, gross loan portfolio of the industry had grown by 84% on an annualised basis to Rs 53,233 crore.
Source Times of India
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Named Avanti Finance, the company will apply to the RBI microfinance licence, and hopes to launch operations before December 3. In a joint statement, Tata and Nilekani said that they are bringing their investments from their respective "philanthropic capital", and "any gains will be reinvested in philanthropic causes".
Besides Tata, Nilekani and Kelkar, Tata Trusts managing trustee R Venkataramanan will also be part of the venture. The statement, without disclosing the founder-directors' investments in Avanti, said a senior leadership team has been put in place. Avanti will be a technology-enabled financial inclusion vehicle.
This is perhaps the first venture Tata is building from the ground up after his retirement as Tata Group chairman in December 2012. So far, the septuagenarian has been putting money in existing companies spread across e-commerce and social impact sectors.
Nilekani, whose passion is technology, has also been backing transformative business ideas that would solve problems for the country. "My participation in Avanti is more driven by social motivation rather than anything else...technology is an important differentiator and allows us to make a difference in many ways than one," Nilekani said. Currently, noted economist Kelkar is on the board of Tata Consultancy Services, the most valued company in India.
"The aim is to leverage on the social sector presence of Tata Trusts and other like-minded partners and the rapidly evolving India Stack (Jan-Dhan - Aadhaar - mobile), UPI and payments bank ecosystem. Avanti would use this ecosystem and will innovate on product design in consonance with the indigenous needs, to deliver seamlessly for the end consumer," the statement said. Of late, microfinanciers have started to disburse loans — the maximum ticket size being Rs 15,000 — directly to low-income people using technology in a bid to cut lending rates. Currently, most micro lenders use NGOs and local self-help groups to disburse funds and charge rates of up to 24% per annum.
The microfinance industry is growing at a breakneck speed after it nearly collapsed six years ago. In 2010, a number of borrowers committed suicide in Andhra Pradesh — which used to account for the bulk of the industry's loans — to escape coercive tactics employed by microfinanciers, prompting the RBI to cap usurious interest rates and high-margin fees. Recent data from the industry trade body MFIN showed that during the January-March period, gross loan portfolio of the industry had grown by 84% on an annualised basis to Rs 53,233 crore.
Source Times of India
Company Secretary GAURAV SHARMA+919990694230 Connect on Watts App with Gaurav Email us [email protected] Submit your guest articles for our website click here we will publish it Subscribe our Email updates like other 21,000 Members, Free/Easy/Comfortableway
