CHENNAI: Commonwealth Finance Solutions Ltd. (CFS), a 100 per cent subsidiary of Commonwealth Projects and Finance Ltd. (CPF), is the latest to join the burgeoning Indian micro-finance market.
It has just set up a subsidiary in India under the name and style of Commonwealth Microfinance (India) Ltd. (CMFIL).
CMFIL will focus on the un-banked and under-banked population. “Our penetration into countries like Uganda and in certain parts of the U.K. has provided us the rich experience. We hope that this expertise will help us grow in India," says Mahesh Ramachandran, Director of CMFIL.
Mr. Ramachandran told this correspondent that CMFIL was set up in January this year with the hope to capture a sizable share from the 600-million un-banked people of India. The main vision of the subsidiary was to bring the majority of the economically active adult population into formal banking system by leveraging technology and innovative business process.
In order to provide a safe, secure and speedy way to store and transmit cash electronically, CMFIL has tied up with Zipp International Payment plc, an independent low cost pre-paid debit card and an international inclusive inter-change, supported by CBC, Global Business Council for United Nations, World Health Organisation and NePad (New Partnership for Africa).
The company planned to launch CMFIL Zipp smart cards in India and tie up with un-banked sections of the society such as auto rickshaw drivers’ associations, fleet operators, tourist taxi operators and other contract labourers. The pre-paid card, which does not have credit risk, could be operated through various multi channels such ATMs, post offices, point of sales, mobile phones and the Internet. The card would be used in various financial institutions, health organisations and educational institutions. By 2012, there would be 20 million CMFIL Zipp customers in India and three lakh pop and mom merchants using the smart cards, he said.
To partner banks
He said the Indian company would partner banks and microfinance institutions. It would not deal directly with end consumers.
About the regulatory compliance, he said the partner banks were authorised to issue and acquire cards. CMFIL and partner banks would also notify RBI about its intention to launch Zipp pre-paid cards.