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Promoting Inclusive Markets and Financial Systems

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Leveraging Digital Financial Services at Microfinance Institutions – II

This blog post is the second in a 2-part blog series, and serves as a continuation of the postSteady and Sustainable Behaviour Change – Lessons from Sonata by Grameen Foundation

Grameen Foundation India, with funding from Citi foundation, and in partnership with Oxigen Services India Pvt. Ltd and Sonata Finance Pvt. Ltd., is using a human-centered design approach to deliver mobile financial services and education to Sonata’s female microfinance clients in Uttar Pradesh.

The Project

Grameen Foundation is executing an innovative partnership between Sonata, a Microfinance Institution (MFI) and Oxigen, a mobile technology company, to route MFI repayments through mobile money as an introductory transaction for clients to develop their mobile financial capability as well as to start using mobile money to access mobile financial services. The project is designed to let Sonata focus on its core strength as a trusted intermediary to support the development of financial capability of the clients and on delivering financial services to the poor, while Oxigen will focus on providing a mobile transaction channel to the poor.


  • Develop a workable model to introduce and encourage adoption of Digital Financial Service by low income population. This model with its proven execution capability, strengthened through pilot testing and adapted for scale-up could then be replicated by other players in the industry
  • To encourage MFI client loan repayments through mobile money as an introductory transaction for clients to develop their digital financial capability as well as to start using it to access other financial services
  • To develop a sustainable rural agent network which will provide the last mile connectivity to clients and ease the cash management function for inclusive Financial Service Providers

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    Sonata provides access to their client base to pilot test and implement the solution. Their field officers introduce mobile money technology to the clients, onboard them on Oxigen wallets, train them on usage, handhold them through the transactions and address any concerns and grievances they may have. Oxigen provides the customized technology of mobile wallet acting as the bridge for cash management between the client and Sonata, they appoint third party agents at locations closer to clients to act as collection points and handle agent related grievance issues. GFI is responsible for getting these partners together through a careful selection process.

    Results and Success Stories

    As of May 2016, this program has reached out to over 23,222 clients to train them on mobile financial services of which 7000 clients have been on-boarded. This payment option has been introduced at over 18 branches at Sonata and transactions have started flowing in, till May 2016 transactions worth INR 1.1 cr have been routed through Oxigen.

    Shanti runs a small general store in Gadaganj. She and her husband recently moved to the village from a more rural area so their son could have better educational opportunities, but in order to earn enough money for his education and their family needs, Shanti’s husband had to take a job in Mumbai as a cook. Shanti has taken loans from Sonata for seven years, and hopes to be earning enough from her business that her husband can come home and help run the shop.

    Shanti has had a positive experience as a Sonata microloan customer, so when her loan group decided to try the new Oxigen mobile repayment option developed by Grameen Foundation, she felt confident that it would work well. Each time she closed down her shop to go to a Sonata branch to make loan payments, she lost valuable sales time; having a quicker – but still dependable – way to handle her loan repayment is a boost to her business.

    Kusuma's seven-member household subsists mostly on farming, though her husband has a small business of his own: transporting sugar cane from the fields to the buyers. Kusuma is in her first loan round with Sonata and used her loan to buy agricultural inputs.

    Kusuma used to lose an entire day and 70 Rupees in transportation fees to make her loan repayment, but now, thanks to Grameen Foundation’s mobile financial services work, her repayments are considerably quicker: she goes to her nearest Oxigen agent and makes her repayment through him. The first time she went to make a payment through Oxigen, she and her son Rahul found the shop easily, made the payment within minutes, and had time to shop.

    Lessons Learned

    The critical success factor in this program during the pilot phase was to train the field staff to act as change agents for introducing, bringing on board, trying and adopting digital financial service by the low income MFI clients. This was done through detailed client level behavior research, designing the product and payment process using the human-centered design approach and creating systematic training plan and aids for the staff and clients.

    Managing the change was a serious concern, not just for the clients but also for the MFI staff. On one hand, introduction of a possibly disruptive technology can pose as a threat to staff for their own jobs while on the other hand there is a risk of it being perceived as just another experiment which will die after the initial euphoria. This challenge was tackled with focused but adaptive change management efforts right from senior management to field level staff through interactive workshops, communication plan, incentive, rewards and recognition schemes.

    The initiative is being continued to roll out at scale across the organization. The lessons learned from this program are also being shared with the industry at large and more MFIs are keen to adopt digital financial services to improve efficiency and offer better and newer services to the poor clients by their financial inclusion. Large scale adoption and usage of this service are expected to bring about efficiency improvements at MFIs, develop a sustainable last mile agent network and spread awareness and trust on the service among clients.

    Chandni G. Ohri is the Chief Executive Officer of Grameen Foundation India (GFI) where she spearheads the strategic vision, operations, planning and implementation of GFI. Prior to this Chandni worked Grameen Foundation USA where she led the set-up of GFI as a wholly owned subsidiary of Grameen Foundation USA. She is on the board of two leading MFIs in the state of Uttar Pradesh, India – Sonata Microfinance Pvt. Limited and Cashpor.

    Gopika Gulati works on marketing and communications at Grameen Foundation India (GFI) where she brings her Public Relations experience across sectors spanning technology, aviation, education, consumer, development, hospitality, corporate and uses communications as a force for positive change.

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