Sonata Microfinance

Sonata Finance Private Limited began operations in 2006 and is headquartered in Allahabad. It provides customers with insurance and savings products, emergency loans, income-generating loans and a host of other financial products and services to help low-income Indian women. The aim of the bank is to help microfinance achieve financial self-sustainability using training, technology and processes to ensure that their customers have access to the best of banking. The bank has adopted both group lending as well as individual lending as its approach, lending funds to individuals and groups as big as 10 to 20 women.

Approach:

• Cash-free operations: Loans are disbursed by Sonata Finance Private Limited via bearer cheques. The collection is either deposited in the bank’s branch offices or the bank’s accounts in commercial banks as doing so reduces risk and ensures that the amount of cash floating around is relatively low.
• Focus on women: The bank offers exclusive products and services for women to help them gain easy access to finances that can be invested in their children or their household.
• Customised products: The bank has tailored loans with low repayments after considering the various wage structures, income-generating and consumption activities to ensure that emergency distress sales are avoided. The first loan sanctioned is usually quite low in order to help customers develop collective responsibility and credit discipline.

Features of Loan Products

1. The purpose of the loan is income generation
2. This loan is only offered to women
3. The household income requirement is more than Rs.60,000
4. Repayment must be done on a weekly basis
5. The minimum amount that can be borrowed is Rs.7200 and the maximum is Rs.19,650
6. The shortest term is 12.2 months and the highest is 23.3 months
7. The interest rate is currently 26%
8. Interest is calculated on a reducing balance method

• Finance in times of emergency for any purpose
• The loan is only offered to women
• The minimum amount that can be borrowed is Rs.1000 and the maximum is Rs.6770
• The interest rate varies from 23.12% to 26%
• Interest is calculated on a reducing balance method
• The shortest term is 3.6 months and the highest is 8.9 months

Features and Benefits of Sonata Finance Loan Products

• Processing fee is levied when the loan is disbursed
• There are no penalties in any case
• The loan can be availed without pledging any asset as collateral
• Prepayment can be done without penalties
• Repayment can be done in monthly, fortnightly and weekly instalment depending on the borrower’s choice
• Loans are granted to support customers who wish to engage in income-generating activities
• There are no additional fees
• The maximum amount offered to customers is Rs.50,000
• The minimum annual income requirement for rural customers is Rs.60,000 and Rs.120,000 for urban customers
• All loans are compulsorily verified by the credit bureau before they are disbursed