The financial institution currently serves more than 2.7 million clients through 500 branches and employs close to 9,000 people. Utkarsh started operations as a microfinance institution in 2009 and received a license to transform into a small finance bank in 2017. Senior Investment Manager Aditya Mohan: “This has enabled Utkarsh to offer other products and services, including savings and remittances apart from a wide variety of credit products while as a microfinance institution it could only offer micro-loans.”  

Through its welfare foundation Utkarsh also undertook financial literacy projects, initiated the distribution of solar lamps, and organised mobile health clinics that travel around rural areas where availability of primary healthcare facilities is limited.  

The COVID-19 pandemic has had a profound impact in India, also on Utkarsh and its client base. Aditya Mohan: “Economic life was brought to a standstill in April and May 2020. With borrower livelihoods being impacted by the lockdown. India’s central bank announced a moratorium on repayments and Utkarsh extended the same to practically all of its micro loan clients and offered them assistance wherever possible. We see that since September, the vast majority of clients have started to make repayments again.”

Utkarsh is preparing for the next phase of growth. Given the market that it operates in, physical banking will continue to play a key role. Aditya Mohan: “However, digital banking will become increasingly important. Digital payments in India have grown rapidly since 2016 (due to demonetisation), and COVID-19 has further underscored the importance of digitalisation. Though a pure digital banking ecosystem is still some distance away in the rural regions that Utkarsh operates, the bank continues to invest in technology to improve process efficiency and customer experience.”

SFRE Fund is shareholder in Utkarsh Small Finance Bank.

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