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CASE STUDY
Sonata Finance implements Nelito Systems’ microfinance solution
S
onata Finance Private Limited (Sonata) is an Indian, Non-Banking Financial Company (NBFC) that provides microfinance loans to the lesser privileged sections of the
society, particularly women.
Established in January 2006 in Central East Uttar Pradesh, Sonata provides loans to individuals or groups of 10 to 20 women members. Offerings include Joint Liability Groups, Individual Lending, Utility Finance, Sanitation Loan, and Home Improvement Loan. Sonata has a network of around 360 branches across the country, more than 2,400 employees, a customer base of 600,000 and loan book of US$ 200 million.
Some of the key challenges that a typical loan issuance process faces is to effectively establish the authenticity of the loan applicant, fulfilling the KYC compliance requirements, and reducing the time taken for the loan approval.
These challenges are especially critical for a company like Sonata that operates mostly in smaller towns and villages, where access to simple facilities such as photocopying of documents is not as easy as the bigger cities. Considering that time sensitivity to such applicants may be more critical as it may be their source of livelihood, improving the efficiency of the process became a key requirement for Sonata.
KEY FACTS
Bank: Sonata Finance Ltd Assets: 13.58 Bn (US$212Bn) Branches (#): 350+ Location: India Supplier: Nelito Systems
Solution implemented: FinCraft™ Core Micro Finance solution Timeline: 1 Year
Sonata already had technology to support its processes by another Indian vendor between 2009 and 2014. However, certain functionalities such as real-time uploading of KYC documents and faster loan processing were lacking in the earlier software. Therefore, the company decided in 2015 to replace its existing core software and began looking for new suppliers.
Numerous companies were considered – including some of the top players – but they were not finalised either due to lack of the right product or the affordability. Finally, after shortlisting three companies, Nelito Systems was chosen.
microfinance loans to the lesser privileged sections of society, particularly women
“
Nelito Systems is an Indian financial technology company that provides software technology solutions and services for banking, financial services, microfinance and government verticals globally.
Formed in 1995, Nelito has more than 200 customers in 16 countries across four continents. Some of the factors that prompted Sonata to select Nelito were the availability of a microfinance-focused solution addressing all the requirements, its market reputation, and the supplier’s willingness to further customise the product for Sonata’s needs.
Sonata approached Nelito with a set of requirements. Some of the key ones were:
• Complete automation of its operations to improve TAT for providing loans
• Integration with Insurance agencies to automate the new group policy and renewal
•Integration with the rating agencies Sonata provides
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