Helping to improve the economic status of rural women – the Kissandhana way!

Radha Bheru and her family at Dhabla in Mandsaur district of Madhya Pradesh grow wheat every year on the 2-acre farm they own. The family is unable to grow crops during kharif as water from neighboring farms flows into their farms. This forced them to work as farm laborers.

Four years ago, the family’s prayers for a better life were answered through Kissadhan Agri Financial Services. A financial services firm initially provided a loan to the family to open a grocery store. Now it has added a grocery store with big plans for the future.

“We had nothing until Kissandhan came to us. We initially received a loan of £60,000 and paid it off. Then we took £80,000. We will complete the loan repayment in the next few months,” said Beru, whose husband and youngest son look after the store.

Checking relationships with neighbors

Like Bheru, many women have availed loans from Kissadhan, a wholly owned subsidiary of Sohanlal Commodity Management Limited (SLCM). For example, ten women from Dhabla village in Rajasthan formed a Lalitha JLG (joint liability group) to collect ₹7.6 lakh from a non-banking finance company (NBFC).

These women worked as laborers in MGNREGA. Using the loan, the women bought buffaloes and sold the milk. This helped them support their family and plan a better future for their children.

According to Golu Yadav, who heads the Jalwara branch in Mandsaur district, the NBFC did due diligence by talking to Beru’s neighbors before extending the loan to them for the first time.

Kissandhan CEO Gurinder Singh Sembey spoke about this. business line that parent firm SLCM, established in 2008, is one of the largest collateral managers in the country. Therefore, the decision was made to serve retail clients who were not receiving funds and were not affected by the banking system.

38,000 beneficiaries

Kissandhan was launched in 2014 to cover tier 2, 3, 4 and 5 cities. “We wanted to work with a progressive group of people who want to improve their business,” he said.

Sembey said that since 2020, Kissandhan has started encouraging and engaging women entrepreneurs through various schemes such as micro-credit and working with Farmer Producer Organizations (FPOs).

To date, the NBFC has provided loans to more than 38 thousand women entrepreneurs. “It’s growing month after month. These women manage funds well. Ultimately, we have seen them progress in terms of their lifestyle. Their income potential is growing rapidly,” he said.

Of late, the NBFC has been discussing new products with a special focus on attracting women, he said, adding that Kissandhan is looking at long-term products as compared to the current short-term products of six, 12 months or 24 months.

Jan Samriddhi loans

“Sometimes entrepreneurs may need funds for more than two years. It can reach 5 years. This could help them improve processing or face challenges in expanding into new industries,” Sembey said.

In this regard, Kissandhan is soon planning to launch Jan Samriddhi loans targeting women entrepreneurs in rural areas with a long-term goal. However, the NBFC may require collateral for the loan issued as compared to other schemes where the lending is unsecured. The loan term can be up to five years.

Kissandhan is currently focusing on Rajasthan and is opening about 10 branches in the state. Over the next 2-3 years, the bank plans to open more than 50 branches to service such loans, in addition to the existing ones.

Regarding the schemes, CEO Kissandhana said that the NBFC looks at the capabilities of the entrepreneur and creates a scheme depending on his income and the business he is involved in. The NBFC is creating a group by identifying entrepreneurs and expanding group lending.

Average loan size

“These women entrepreneurs undergo a lot of training through our credit service provider (LSP) and then monitoring happens accordingly. So within this particular scheme of things we have another one where personality comes into play,” he said.

For women-focused PBOs, Kissandhan provides short-term unsecured lending for a period of six to 12 months. It is based on their cash needs for the crops they grow. “One program is for input and purchase. The second is intended for the purchase and sale of products. And the third is associated with entrepreneurs or FPO businesses who regularly need capital for working capital and long-term capital,” Sekhmbey said.

Kissandhan usually prefers to lend to women entrepreneurs, with loan sizes ranging from Rs 30,000 to Rs 1-1.5 lakh, he said, adding that currently all loans are “unsecured in nature”. However, the average loan size is £35,000-£40,000.

Kissandhan is present in almost all states except Northeast and Jammu and Kashmir. “Currently we are in 14 states in which we have an active presence. But we have a presence in other states too, but it is very small,” said the NBFC CEO.

Influential states

Of the 14 states, Kissandan is aggressive in nine. Among the states, NBFC considers Maharashtra and Odisha to be the most influential. “We have gained decent experience in West Bengal in recent times. Bihar, like eastern Uttar Pradesh, performed well. We had a good history in Rajasthan and Andhra is a very mature market,” he said.

Kissandhan has about ₹70 crore left of the loaned money. NBFCs have a limit of ₹250 crore for their schemes. All loans are paid through the client’s bank account.

The loans are nearly 100 percent refundable, with collections done through a UPI account. Its service providers also collect the cash and deposit it in the bank the next day.

Kissandhan is looking to expand further in Madhya Pradesh, being a strong player as it only has a small portfolio in the central Indian state. NBFCs issue multiple cycles of loans, improving with each cycle. It makes a maximum of three to five cycles until the client becomes solvent.

With the government focusing on the role of rural women, especially in the field of driverless technology, Kissandhan will look for opportunities in such entrepreneurial programmes, the NBFC CEO said.