Microcredit Inc: Franchising microfinance

(guest post by Intellecash Strategy Team)

Here at India Development Blog we like to highlight people who are doing things differently, particularly in the social entrepreneurship sector.

IntelleCash (www.intellecash.com) is a bright new idea to apply the principles of mainstream business franchising to microfinance in India.

Vineet Rai, the CEO of development consultancy Intellecap, conceived the idea while considering how the microfinance sector could achieve a more rapid outreach of financial services to the poor, and more particularly, how to make use of talented entrepreneurs in doing so.

Business franchising is a set of techniques which have already had a revolutionary impact on the retail and the fast food sectors. IntelleCash is the first to take these ideas and use them for microfinance.

Individual entrepreneurs are given access to a proven business model, and then apply it to their own local area. By building on a template that has already been successful elsewhere, the risk to the entrepreneur is greatly reduced. For clients, quality standards are assured by the use of a familiar brand and a standardized product.

Ankur Singhal, a senior manager at IntelleCash explains: “Right now, the Indian microfinance market is packed with small microfinance institutions (MFIs) who are failing to grow to their full potential due to inexperience and lack of professional management. It is a shame, because the market for financial services amongst the poor is larger than ever”.

IntelleCash gives entrepreneurs a ‘toolbox’ of services to guide them from the drawing-board to the field, including intensive staff training, software, consultancy services and capital structuring guidance.

For the most successful and profitable franchisees, there is also the option of equity finance from IntelleCash’s investment partner, Aavishkaar Goodwell (www.aavishkaargoodwell.com).

So far it seems to be working. The first batch of franchisees are spread across Delhi and Maharashtra, and more are due to launch soon. Mr Singhal comments: “What is really exciting is to see how our services are empowering entrepreneurs to help themselves and reach out to the poor.”