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SKS is currently reaching over one lakh (1,00,000) villages in India with a presence in 19 states and 2,379 branches. SKS has begun leveraging this extensive branch network and its financing ability to provide more financial services to the bottom of the pyramid. In this direction, SKS undertook initiatives like mobile handset financing, financing loans against gold collateral and lending to kirana stores (Sangam stores).
A suitable credit product has been designed to meet this specific need. SKS partnered with one of the world’s most reputed wholesalers, Metro Cash and Carry (India) Pvt. Ltd., in Hyderabad. SKS enrolled 3,500 stores and is now planning to expand this program geographically (to Bengaluru and Kolkata) as well as to different customer segments (non-borrowers). SKS is building new relationships to extend the non-borrower program across the country. SKS has also developed a mobile based MIS system to collect and consolidate orders and track the loan portfolio. The enhanced software system will help SKS in scaling the program in multiple locations working with multiple partners. This program can act as the first step in creating distribution channels for a wide range of other non-financial products. SKS believes that it can offer profitable products that benefit its approximately 5 lakh Sangam store owners and which have trickle-down benefits to its broader borrower base. 
A pilot project has been launched in three locations in Karnataka and in two centres in Gujarat to test the product and processes. |
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India has a high potential in the mobile telephony market, but the high cost of mobile handsets is a key deterrent for rural borrowers of SKS. Considering this, SKS has launched a mobile finance program that offers its borrowers mobile phones at a relatively lower price with the option of paying in small, easy installments. SKS has partnered with Nokia India Pvt. Ltd. to supply quality handsets to its borrowers. A loan product has been designed to facilitate finance for handset purchases. Under this program, SKS has disbursed 3.5 lakh mobile loans to its borrowers in six states of India. This initiative has instilled confidence in its borrowers and improved their business through better access to communication. 
A Sangam store is a kirana store run by an SKS borrower. The objective of SKS’s Sangam store lending initiative is to enable Sangam store owners to buy — from a wholesale vendor — fast-moving consumer goods and groceries which they would then resell in their retail kirana stores. This will give them access to quality products at competitive prices. It also saves the borrower time and transport costs. About 8% of the total borrower base of SKS is running kirana stores (i.e 5 lakh kirana stores). With SKS providing finance and the wholesaler facilitating delivery to kirana stores, SKS and their partner wholesaler can both enhance the volume of business done by Sangam stores and meet working capital needs of Sangam store owners.
Currently, the gold loan market is predominantly operated by usurious pawn-brokers with players in the organized sector having limited reach in the rural markets. To bridge this gap, SKS has initiated the Gold Loan pilot project. The objective is to enable borrowers to get loans at competitive rates to increase their business, to fulfill personal needs and to address other emergencies. SKS plans to target its current borrowers as well as new ones with the product.