Fusion Microfinance

Micro Finance:

RBI defines micro credit as any sort of credit, thrift, financial services and other products that is provided to the poor. These micro credits are provided so that people from the rural and semi urban areas can improve their way of living and also increase their income.

Fusion Microfinance provides loans to people of such sections varying from 12000 INR to 50000 INR and the tenure of these are usually one to two years. The loan amount is usually taken up to set up a new business venture or expand any existing business. This way, they can earn more and provide financial stability to their families.

Apart from the micro finances, Fusion also takes care of insurance for the people associated with them. The clients and their spouses are usually insured, in case of any unforeseen events. However, in case of uncertainty, Fusion not only waives off the principle amount, but also returns the amount repaid to them as a part of the repayment process. One of the reasons, these loans are appreciated by the clients is the lack of banking and similar services in such interior and rural places. People usually have to rely on money lenders for such transactions, but with Micro Finance a much-needed robust structure has been brought into the sector.

Income Generation:

The micro financing loans provided by Fusion are designed in way, to provide flexibility and also less burden on the economically weaker section. The lowest loan amount that one can opt for is of 12000 INR and it has a tenure of 12 months. Similarly, the highest loan amount granted to a borrower is  50000 INR which has to be repaid within 24 months. There are lots of options to choose from, which makes life easier for the clients.

A client can opt for a smaller installment amount for a smaller time frame or a larger installment amount for a longer  time frame. For example, if a client takes a loan of 15000 INR, they can choose to repay 660 INR per installment over 26 installments or 1000 INR over 18 installments. Fusion charges relatively lower reducing interest rate of 25.75%-24.5% which translates to an annual interest rate of 27.82%-24.50%. These loans are created keeping in mind the ease of repayment and hassle free banking experience.

The loan amount also includes the taxes and insurance amount as well. However, one of the biggest benefits is that, no security or collateral is needed for these loans. Clients usually start with the lowest amount of loans and work their way up. Fusion has lots of clients who started with 12000 INR loan amount, have repaid the same and taken a higher amount of loan to expand their business entities.

As Fusion adapts from the Grameen Bank model, it brings along the advantages of the same. A branch usually comprises of 4-5 Relationship managers who look after somewhere between 15 to 22 villages. Employees initiate the process by going around villages and understanding the environment and in the meanwhile looking out for potential clients. Post identification of potential clients, the motive and reasons of the program are explained to them. Such potential clients are then divided into groups and CGT is provided for couple of days and GRT for the entire branch by the manager. The turnaround time is quick for the disbursement of loan as well. It is usually 8-12 days since the CGT is provided.

One of the primary visions is to improve the living standards of the poor, Fusion deals with lots of Social responsibilities as well to ensure the same. Some of them are as follows:

Health Care and Sanitation:

Fusion has several projects which ensure that not only the clients but also their communities are benefited from these activities. With regards to healthcare and sanitation, there are several projects which promote awareness, provide with causes, symptoms, where ever possible prevention, and eradication of some common diseases. In order to expand the  Swatch Bharat Abhiyan campaign initiated by the Honorable Prime Minister of India, Fusion has also built several toilets in Ladwa Haryana.

Promoting Education:

Fusion Microfinance understands it pretty well, that one of the best ways to achieve its mission is to educate people regarding household business and provide them with the necessary trainings. Such events liberate and provides people with a motive to improve their way of living. Apart from education and training, Fusion also has undertaken the task of digital literacy for its clients. This empowers them to best use the mobile payment platforms for their benefits. Knowing the dire need for Financial Literacy, Fusion ensures the same is provided to their clients as well. Trainings on money management, proper utilization and the impacts of over borrowing are also explained to the clients.

Environment Sustainability:

Given the current scenario and context of hazards to the environment, Fusion has taken it up as a challenge and responsibility to do its bit for the environment. It has initiated several Tree plantation drives, along with providing contributions for Bio-Diversity conservation.

National Funds and Rural Development Projects:

During the recent flood in Chennai, Fusion donated 2 lakh INR through NGO and also contributed to the National Relief Fund. It has also taken up several rural development projects such as providing of LED lights on statues on the roads and also by distributing LED lights in the rural areas.

Fusion believes micro finance is not just lending out loans but also bringing financial involvement and helping out the largest unbanked section of population. In recent times, they have expanded in five additional states and 3966 villages and have disbursed about 236.36 crore INR to over 118180 new clients. The clientele of Fusion comprises of 89.48% of women who belong to scheduled caste, scheduled tribes and other backward classes. Which again reiterates the motive to bring about financial inclusion and provide them with authority to lead better lives.

As far as the existing states where Fusion has its branches, an additional amount of 304.70 crore INR has been disbursed to 154316 new clients. The constant ability of expanding its foot prints has brought good results for Fusion. Back in 2014,the total amount of loan disbursed was 167.51 crore INR, which swelled up to 601.53 crore INR in the year 2016 and considering the measures they are taking to reach even deeper into India, there is huge potential that Fusion can look forward to.

All this while, Fusion has not shied away from using technology to its advantage as well. They invested in automated loan management module, which would reduce the turnaround times and help them service their clients better, while eliminating human errors. The system is also capable of uploading files and consolidating them and sending them to the credit bureaus.

Inclusion of these automated systems has helped Fusion to increase their loan application processing from an average of 8847 per month in 2013-14 to an average of 24670 for the financial cycle of 2015-16. The turnaround time has also reduced from 14 days back in 2013-14 to 10 days in 2015-16. The bottom line of all these figures being that with growth Fusion has only become faster and more responsive with almost all the aspects of business rather slowing down like lots of other companies.

Fusion also has impressive collection efficiency as well at 99.37%, higher than the industry average of 99% and also has reported decline in overheads from 65.94% to 59.93%. It translates to fact that with better servicing of clients, they were able to improve their financials as well.

Fusion has displayed sustained growth over the last few years and the following numbers reflects the same. These values are also a testament as to why Fusion sits comfortably within the top 20 Micro Finance organizations in the country and its ever increasing footprints keep it poised for a steady growth.

Growth in number of Branches	65.21%
Growth in customer base	85.23%
Growth in disbursements	87.79%
Growth in revenue	100.31%
Growth in team size	83.64%

As part of its motive to have a very transparent process in place, Fusion also has Grievance mechanism in place. For the first level, clients can call on a toll-free number and register their grievances. A dedicated team then takes a look at the matter and tries to resolve it at the earliest. The passbook provided to all the clients has the toll-free number printed on its back. They are also provided these information during the three-day CGT. Each of the centers also has a complaint/grievance box, which its clients can make better use of.

However, in the event of failure of the team being able to resolve the issue within 15 days, clients can reach out to a designated Grievance Redressal Officer from Fusion Microfinance. And in the unfortunate event where the issue is not resolved by the Grievance Redresssal Officer within a month, the complainant/borrower can reach out to the General Manager of the Reserve Bank of India for the final escalation.

All the employees who are directly involved with the grievance undergo thorough induction regarding the same and also refresher courses from time to time to ensure the company’s goal to have an efficient and fair grievance cell.

Lot of thought process goes into ensuring the entire process starting from identifying potential clients to disbursement of loans to repayment of the same is as transparent as possible. And these initiatives are a result of those. The result of all these efforts is that Fusion has been awarded the MF Transparency seal of Pricing Transparency in the past.