After six months on loan, Sheroes founder explains how difficult it is


  • Eight years Sheroes started lending, only to women, through its digital bank called Mahila money Six months ago.
  • Chahal wants to expand this business to an additional 10 million women by 2022.
  • Chahal shares the challenges and how she plans to overcome them in an exclusive interview with Business Insider.
  • Check out our weekly explainers on the hottest topics and sign up if you like them.

Delhi-based women-only social network Sheroes now expects to become prominent in the lending arena by offering small business loans to women micro-entrepreneurs in India.

The eight-year-old company set up a new neobank six months ago, called Mahila Money, to provide loans as well as financial services to women. It’s a separate entity, with a separate team, to make it evolve faster with precise focus.

The company currently offers small loans of an average of 50,000 and up to 500,000 to yoga trainers, class teachers, social commerce vendors, beauty salon owners and boutique owners.

Simply put, neobanks are digital-only banks with no physical branches. You can read more about it
here.

While founder Sairee Chahal started out with lofty goals, Mahila Money managed to lend to 200 women in the last quarter. She noted that people who borrow from Sheroes’ Mahila Money have never borrowed capital in the formal market before and this is mainly due to the lack of options available to female entrepreneurs.

One of the biggest hurdles in the segment has been a lack of confidence.

“Confidence is a major, major thing. No woman, no one wants someone to land on their doorstep or for someone to call their family or loved ones to get their loan paid off, ”Chahal said in an interview.

All the space for small loans has been sullied by unregulated players, many of whom are acting unethically to collect their loans. A problem that worries even the Reserve Bank of India (RBI).

Even those in need of loans have been branded and are often suspicious of legitimate players like Sheroes.

But confidence can put your foot in the door. There are a lot of other challenges along the way.

The traditional loan system leaves out a large part of the Indian population who have no credit score. Women were at the end of this pool because they had no assets or credit scores on which to borrow capital.

Women have to rely on other male family members to complete the loan process as they do not own any assets in their name and this is quite disheartening for them, Chalal explained.

To address this challenge and identify women who are likely to repay loans, Mahila Money examines 100 new data points, including their understanding of the business, behavioral data, social data, transaction data and social capital, added. Chahal.

BI India

It is still a difficult task. Thus, Chahal has partnered with organizations that work closely with these women.

In order to build that trust, Mahila Money has partnered with 60 women-focused organizations – Empower Foundation, Udyam Foundation, Seva Foundation, beauty salon associations – which have nearly one million members. These organizations redirect their members to Mahila Money when needed and also help with the subscription process.

The company aims to connect with 3000-4000 of these organizations, with nearly 10 million members, by the end of 2021. This is in addition to the 22 million women who are registered on the Sheroes app for the employment, entrepreneurship or simply to get involved in a community.

It’s still a huge opportunity. According to a
report By International Finance Corporation, a member of the World Bank, India ranks third in the world for the gender gap in entrepreneurship and lack of capital is one of the main reasons.

Another report
published by Mckinsey Global Institute in 2018 added that India can increase its gross domestic product (GDP) by up to 60% by 2025 through equal participation of women in the workforce. This would require an additional $ 700 billion to $ 7.9 trillion.

Chahal wants to expand this business to an additional 10 million women by 2022, from the current customer base of 200.



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