Finance

Promoting better financial literacy

Equitas is ensuring its clients are financially aware

The Indian small finance bank and former microfinance institution Equitas is promoting financial literacy to its clients to ensure they’re ready for the formal financial sector and supporting the community by running food stores and schools

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Equitas, founded in 2007 as a microfinance institution, is one of India’s newly established “Small Finance Banks”. Its head office is in Chennai, Southern India, and it has a total of 353 branches across 7 Indian states.

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Equitas provides microloans of USD 180 to USD 380 to individuals with a maximum income of USD 2,400 per year and per household. Generally, male employees go out to visit clients, while female employees work in the offices.

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Many clients have never met a financial services provider or had to calculate their income and expenditure. To qualify for a loan, borrowers form groups of five members and are taught about money by Equitas.

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Equitas invests time in promoting financial literacy among new borrowers. The loan groups meet with their Equitas client advisor every 14 days to repay the next instalment of their loan, generally in cash, and improve their financial education.

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Clients are encouraged to use a bank account for their transactions and, as a reward for doing so, they’re offered larger loans. Latha from Chennai uses her loan to buy fish, which she then sells in the markets.

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Many Equitas clients run small businesses or work in agriculture.

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Equitas provides microloans to individuals with a maximum income of USD 2,400 per year and per household. Equitas Housing Financing serves people on low incomes who want to take out a mortgage to realize their dream of owning their own home.

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Equitas has a used vehicle leasing offering targeted at drivers who want to establish a business by obtaining their own vehicle. Thanks to access to financing, people own a taxi and become their own boss.

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Another client segment is SMEs that have experience of microloans. These are eligible to borrow between USD 750 and USD 7,500. Companies can borrow up to USD 38,000 against collateral.

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Equitas also supports the community – running food stores and schools for the children of microborrowers. Children can obtain a solid and affordable education, which is vital for their future success.

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The company’s social commitment stretches to shops open exclusively to Equitas clients where staple foods are on sale at lower prices.

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Since its transformation into a “Small Finance Bank” in 2016, Equitas can offer clients savings products as well as loans.