Lending to Low-Income Households

One of the worst kept secrets about rural India is that despite accounting for two-third’s of the country’s population and nearly half of its gross domestic product, their access to formal credit is less than 10 percent.

Part of the reason is that most of rural India till recently was unbanked. All this is changing though. In the last 10 years, 50 crore people have been banked. The spread of FinTech has enabled microfinance institutions to bank rural India, particularly women in low-income households.

The rapid surge in access to basics like cooking gas, electricity and so on is accelerating this process, bringing about a profound socio-economic transformation.

To understand this trend, Anil Padmanabhan spoke to Sadaf Sayeed, CEO of Muthoot MicroFin — the third largest lender in South India on Capital Calculus.