92 POS | Case Study - Payment Collection

Payment Collection

Executive Summary

Non-Banking Financial Companies (NBFCs) provide financial services such as deposits, loans, payment services, money transfers, and insurance products to the low-income households, and their micro-enterprises and small businesses.

India-based Mahindra Rural Housing Finance Ltd, a subsidiary of Mahindra Finance, caters to the rising demand for home loans from semi-urban and rural areas by tapping rural markets in Maharashtra, Gujarat and one of the South Indian states.

Challenges

Housing Finance in rural India means setting up of more and more branches in remote places and having large workforce for branch representation and information networking.

Loan and customer details needed to be manually carried by the field officers who in turn would look up the document to find the loan payment schedules and details. The physical documents may or may not carry the latest information on payments.

Collection of cash as loan repayment is manual for which a paper-pen based voucher is written and provided to the consumer. This leaves a scope for mismanagement of the cash receipts in the field.

End of the day, the vouchers provide all day transaction information to the main branch where a data is manually keyed into a computer terminal connected to the central database. A possibility of wrong data entry was never ruled out. Cash reconciliation on the other hand would be tallied with the vouchers produced.

This process was highly time-consuming and prone to errors.

Solution

Instead of setting up more branches to cover rural India, Mahindra Finance transformed thousands of their on-field officers into roaming mini-branches, using the simple, handheld, user-friendly VISIONTEK POS terminals.

With handhelds at their disposal, collection executives get details of the consumers beforehand, enabling them to plan their time and route appropriately. On providing the unique 'consumer ID', the customer details like the name, address, details of loan taken and the installment due is displayed on the POS terminal LCD.

The executive accepts the installment from the customer and feeds in the details of the cash received in the ePOS terminal. The same is updated in the central server and the receipt is generated. The operations staff takes out 2 receipts. Gives one to the customer and carries one for filing at the office.

All this information, riding on a GSM/GPRS/CDMA network, is updated on Mahindra Finance's central servers directly from the device.

Once an executive is back at the branch, the cash collected is deposited with an accountant, who in turn updates the systems. The automated MIS management based on online data flow enables the enterprise to have complete visibility of the cash flow.

Business Benefits

Armed with wireless online handhelds, this mobile workforce ensures that Mahindra Finance reaches the doorstep of its consumers, living in far-flung villages or semi-urban locations. They also act as mini-branches equipped to conduct financial transactions and instantly update the central servers at the company's headquarters in Mumbai. This provides business heads - from the controllers of the collection team to senior management - with up-to-date status in real time.

The executive can also create information trails, address business queries, record customer commitments and note relevant information for further follow-ups, undertaken with the customer at his doorstep.

Mahindra Finance leverages the information captured right from the door-step of a customer to adequately plan business actions and maximize ROI.

The efficiency and performance of the collection teams is also be examined through timely information updates coming in from their devices. An executive's incentive is also automatically measured using the data related to the cash collection being captured by the handheld devices.

About the Customer

Mahindra Rural Housing Finance, Ltd. provides loans in rural and semi-urban areas for buying, repairing, and constructing new houses in India.

92 POS - Rural finance

The company is based in Mumbai, India. Mahindra Rural Housing Finance, Ltd. operates as a subsidiary of Mahindra & Mahindra Financial Services, Ltd.