MSIL Formalizes NBFC Operations with Aggressive Rural Expansion Strategy
State-run Mysore Sales International Ltd (MSIL), which has recently rebranded its chit fund business through a dedicated mobile application and customized chit values, is now taking significant steps to give a formal structure to its non-banking finance company (NBFC) operations. The company is embarking on an aggressive expansion drive into rural Karnataka, aiming to leverage self-help groups (SHGs) and recently retired bankers to widen its subscriber base and strengthen fund management.
Partnering with Self-Help Groups for Wider Reach
As part of this strategic expansion plan, MSIL is actively engaged in discussions with officials from the National Rural Livelihood Mission (NRLM). The goal is to utilize SHG Sakhis as agents to significantly broaden its subscriber network across the state. "NRLM is open to the idea as Sakhis have been trained in banking aspects," stated Manoj Kumar, Managing Director of MSIL. "We will consider the option on a pilot basis in the old Mysuru region and use Sakhis as our agents or commercial business partners."
The SHG-based model is slated to be launched initially in Bengaluru South and Mysuru districts, with plans for a statewide rollout following successful implementation. Karnataka boasts more than 2.5 lakh SHGs, with substantial investments already made to promote their financial independence and empowerment.
MSIL officials elaborated on the training and incentives for Sakhis, noting that they will receive specialized training in the chit fund business. "Sakhis will be trained in the chit fund business, and we will ask them to get people to invest," the officials said. They added that the company is also exploring the possibility of hiring local grocery store owners as additional agents to further penetrate rural markets.
To ensure credibility and trust, Sakhis will be provided with certificates to prove they are genuine MSIL partners. Similar to LIC agents, they will earn a percentage of the investments they bring in, creating a sustainable incentive model that aligns with the company's growth objectives.
Tapping into Rural Growth Potential
Currently, one-third of MSIL's one lakh chit fund subscribers are from urban areas. The firm identifies significant growth potential in rural regions where formal banking services remain limited due to regulatory constraints. "With the state government guarantee, we believe MSIL chit funds can achieve its targets," Kumar emphasized. "Already, as per our current estimates, the chit fund business should touch over Rs 1,000 crore this fiscal."
This rural focus is not just about expansion but also about addressing financial inclusion gaps, providing accessible investment opportunities to communities that have traditionally been underserved by mainstream banking institutions.
Strengthening Fund Management with Retired Bankers
In a parallel move to enhance professionalism and security, MSIL is planning to recruit recently retired bankers to bolster its fund management operations. "We are looking to hire those in the 60 to 65 age group on a contractual basis to manage the business more professionally and add a certain degree of security to it," Kumar explained.
This initiative aims to leverage the extensive experience and expertise of retired banking professionals, ensuring that MSIL's chit fund operations are managed with high standards of integrity and efficiency. The inclusion of such seasoned individuals is expected to instill greater confidence among subscribers and stakeholders, further driving the company's growth trajectory.
Overall, MSIL's multifaceted strategy—combining technological rebranding, rural outreach through SHGs, and professional fund management—positions the company for robust expansion in Karnataka's financial landscape, targeting both urban and rural markets with tailored approaches.
