User in Focus – Chaitanya
This regular blog series will shine the light on the financial institutions that are using Mifos or partner-led solutions powered by Mifos? We want to share the impact and benefits Mifos is helping you have on your clients as well as the personal experiences and lessons you learned while deploying your solution.
Chaitanya – Bangalore, India
Chaitanya is an NBFC serving more than 170,000 rural clients in the states of Karnataka and Maharashtra. Their mission is to improve the lives of low income families through the provision of Financial Services. They are using FinFlux, a core banking solution powered by Mifos built by Conflux Technologies.
Chaitanya has its roots as a local NGO working in the rural parts of Central Karnataka. It was founded in 2004 by the late Mr. Ramesh Paineedi, a school teacher. It started work in the area of children’s education and gradually moved into supporting rural microenterprises through its partnership with Small Scale Sustainable Infrastructure Development Fund (S3IDF), a US based NGO. Anand Rao (a Promoter in Chaitanya), built the partnership between the NGO and S3IDF while working with the latter.
The S3IDF and Chaitanya partnership helped create more than 25 microenterprises in rural Karnataka in the area of electricity supply to un-electrified households, Self Help Group (SHG)-owned and operated enterprises and IT based enterprises. Through the partnership, equity support, bank guarantees and debt financing support was provided to these microenterprises. Additionally they also arraned microcredit through the local regional rural bank, Pragathi Grameen Bank, to self help groups for activities such as LPG and electricity connection. Arranging financing for SHGs helped Chaitanya gain experience in the microcredit space and laid the foundation for starting Chaitanya, the MFI, as an NBFC.
Chaitanya was incorporated in March 2009 and MFI operations started in October 2009 after obtaining a fresh NBFC license from RBI. The initial promoters of the MFI were Anand Rao and Samit Shetty. As the MFI operations started, the NGO activities were completely wound down.
Chaitanya now reaches 170,000 clients with a portfolio of 3 Billion INR or about $45 Million USD. They hope to grow by 50% CAGR for the next two to three years. Chaitanya focuses on the rural markets, reaching 20 of the 30 districts in the state of Karnataka and 2 districts in the state of Maharashtra. Chaitanya offers a variety of Group Based Credit Products in the form of JLG loans ranging form INR 5,000 to 35,000 and Business and Housing JLG loans from 35,000 to 60,000. Individual Loans for 2 Wheelers, Housing and Small business loans varying from 100,000 INR to 500,000 INR.
Chaitanya chose to implement Mifos because they were seeking a solution that is not rigid and hence permits integration with multiple software and different environment.
In July 2015, Chaitanya began implementing Mifos with the support of Conflux Technologies and the project led internally by IT Manager, Jignesh Bhalani. Initial implementation took around three months with a range of other integrations ad enhancements added in over time including a workflow management module, reducing balance interest rate calculations, soft integration with credit bureaus, and an added accounting balance. Their Mifos implementation also integrations with the Aadhaar national ID system.
What challenges were overcome?
Chaitanya faced and surmounted a number of challenges including having pilots spread across different geographies and creating visibility into each of these pilots and not considering each one complete until all concerns were addressed. They also achieved success by putting together a multi-function implementation team with clear success owners across the entire organizational spectrum.
What has been the greatest impact or benefit of your solution?
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