Ujjivan Small Finance Bank
Ujjivan Small Finance Bank, winner of Asiamoney’s award for the best firm for microfinance in India, was set up in 2005 as a micro-lending institution, so its credentials in the microfinance segment are unrivalled.
It now boasts $1.7 billion in assets and $1.4 billion in deposits, but its core business hasn’t changed – about 85% of Ujjivan’s portfolio is still microfinance.
So what makes Ujjivan, run by chief executive Nitin Chugh, unique? First, the firm has consistently made sure to balance risk-taking with robust financials. Its net non-performing loan ratio last year, for example, was at a manageable 0.85%.
But that does not mean it is too conservative. The bank has shifted focus over the years from giving loans mostly to groups, to lending to individuals. In 2019, it went a step further than that by offering its banking products to families of its existing microfinance customers. It has also emphasized digital transformation to its microfinance clients.
Ujjivan’s loans range in size from about $70 to $2,810 and can go towards anything from home improvement and child education to working capital for businesses or agriculture. Loans can be paid within two days from application, with customers able to open a savings account in less than 20 minutes.
Ujjivan is also one of the few small finance banks to allow flexible cashless repayment options, with about $1.5 million of loans being repaid this way.
The bank is one of the first in India to use comprehensive credit card information reports for underwriting microfinance loans, giving it an early insight into risks.