Hyderabad-based Vaya Finserv Private Limited is all set to launch its microfinance operations. Vikram Akula will be at the helm of affairs.
Vaya is opening its first set of 15 microfinance branches this week in Bihar — one of the states where it sees the need for microloans was high.
Vikram Akula is the co-founder and chairman of Vaya, which is currently operating 50 banking correspondent (BC) branches across five states and managing about Rs 436 crore of the combined microloan portfolio for YES Bank, RBL Bank and Reliance Capital.
In 2012, Vikram quit as chairman of Bharat Financial Inclusion (formerly SKS Microfinance), which he founded and led to a successful IPO in 2010, in a fallout of differences triggered by the AP microfinance crisis.
Driven by the same level of faith and ambition in the potential of microfinance, Vaya has chalked out a three-year growth plan based on deeper insights at managing the risk, end-to-end use of technology, including big-data analytics.
"In three years(by the year 2020) we would like to grow our total loan portfolio to Rs 3,000 crore. While one-third of it will come from the BC operations, the remaining loan portfolio will be generated through our own microlending platform and investments," Jagadish Ramadugu, co-founder, managing director and CEO of Vaya Finserve told Business Standard.
While the initial rounds of investment were brought in by the founders, the company is in negotiations to raise around Rs 100 crore ($15 million) in equity and Rs 300 crore in debt from outside sources by March, 2018, according to Jagadish Babu whose earlier stints include senior roles in Asian Paints and Coca-Cola India.
In Vaya Finserv, Vikram Akula and Jagadish hold 26 per cent and 15 per cent stakes respectively while majority equity is controlled by Vaya Trusts (formerly SKS trust).
The company would apply for a small finance bank (SFB) license 2-3 years down the line as it brings down the cost of funds by at least 4-5 percentage points, according to Vaya CEO.
In terms of reach, Vaya seeks to expand its presence to 150 districts across 10 states from about 50-odd districts in 6 states where it currently operates. It seeks to establish 300-odd microfinance branches on top of the present network of 140 BC branches that continue to serve the three financial institutions under the BC model. It aims to serve 1.5 million customers across 40,000 villages by 2020 as compared to 2.6 lakh customers at present.
"The intervention of one state government had entirely disrupted the microfinance activity in 2010 because 70-80 percent of microlending activity was concentrated in one single state. That's a thing of past now," he says while adding that a lot of analysis will also go into the selection of a particular district or a segment of customers before spreading its operations to serve the 'aspiring poor'.
Interestingly, Vaya prefers to disrupt the joint-lending model being followed by the other MFIs. It seeks to set up smaller groups, each with five women members, for the sake of convenience and the relevance of a group ends there. "After a typical loan amount has gone up to Rs 25,000 per customer, no women's group was willing to take share a joint liability. That is a structural shift which had happened in the rural areas in the recent past," he said.