Mamata Padhi lives near Khurda in the Odisha province of eastern India with her husband and three children. When the income from her husband’s farming was not enough to meet their household needs and cover their children’s school fees, Mamata decided to start a tailoring business to earn money for her family. She began as a group lending client of Annapurna Finance Ltd. and used her first loan to open her tailoring shop. As she grew her business over four years, she was able to hire another woman to share the workload in the shop.
Annapurna Finance Ltd., a longtime Accion partner which serves two million customers across India, is committed to reaching the poorest and most underserved; more than 90 percent of customers are women, and more than 80 percent live in rural areas. In addition to group lending, specialized loan products such as housing, individual business loans, and other financial products, Annapurna also provides financial and technical support to its clients to strengthen their entrepreneurial skills. During the COVID-19 pandemic, Annapurna offered additional financial and non-financial support to their clients, like Mamata. COVID-19-related lockdowns left Mamata unable to pay the rent in her tailoring shop, and she came close to going out of business permanently. Annapurna offered her a new midterm loan product to help her through this challenging time, allowing her to reopen her shop, rehire her employee, and rebuild her business.
Accion has worked with Annapurna for nearly a decade on various projects such as financial inclusion for people with disabilities and financial capability building. Currently, Annapurna works with Accion through the Mastercard and Accion partnership to drive digitization in product innovation, customer engagement, and risk management.
We’re also supporting the development of a Just-in-Time financing product that can be offered to existing customers through various digital channels as an emergency loan option. This product allows Annapurna to support clients like 26-year-old Rosina Das in Odisha, who was able to reopen her small grocery shop in her village despite challenges faced during the coronavirus pandemic. Rosina worked with Annapurna to reschedule her payment dates and receive an emergency loan through Annapurna’s midterm loan offering. This allowed her to quickly purchase the supplies she needed for her store and resume providing groceries to her community.
Annapurna’s vision of financial inclusion is closely aligned with Accion’s, and we are excited to deepen our commitment by investing in the company as they continue to grow, innovate, and expand their impact. Annapurna is already providing a host of individual lending products for microenterprises and is planning to expand its product offerings to include housing loans, MSME loans, and savings products to continue to meet client needs.
Annapurna is working toward transforming itself into a fully digital financial services entity with the help of Accion’s investment and advisory services. We started by conducting our Digital Maturity Assessment to better understand how Annapurna can design products that meet their clients’ needs through digital tools. This focus on digital strategy will further boost the financial inclusion objectives of Annapurna as distributing products through digital channels increases the speed and convenience for their customers. By providing faster and easier access to women borrowers in rural India, they’ll continue to bring more women and families into the formal financial ecosystem.
We are excited about Annapurna’s future and look forward to continuing to support the company’s work to innovate and find new ways to make microcredit as relevant and effective as possible for low-income communities across rural India.