Utkarsh Small Finance Bank, a microfinance institution in India, has rolled out Intellect Design Arena’s core banking system.

The bank received its licence last year, and according to Intellect, one of the key requirements for Utkarsh was to have a joint liability group solution that would enable it to provide group loans to the microfinance sector. This was “critical” to reach out to the unbanked population in rural areas who cannot afford individual loans.

Govind Singh, MD and CEO, Utkarsh Small Finance Bank, says its microfinance business has “evolved into the small finance bank” and it wants to provide “easy access to finance for those who are skilled, but do not have the adequate financial support”.

Intellect provided Utkarsh with a “completely hosted” solution that includes loans, deposits, internet banking, mobile banking, digital branch and tablet banking. In addition, it provided offline capability which lets remote users continue working without a network connection.

Utkarsh has over 400 business locations in ten Indian states, with more than 1.2 million clients. It says it is targeting over ten million customers by 2021.

The new niche

Small finance banks (SFBs) are new niche players in India – aimed to facilitate financial inclusion. They provide basic banking services to the sectors often overlooked by mainstream banks, such as micro and small businesses, small farmers etc.

There are currently around ten SFBs in India. These include AU Small Finance Bank, Capital Small Finance Bank, North East Small Finance Bank, Suryoday Small Finance Bank, Equitas Small Finance Bank, and Ujjivan Small Finance Bank.