In a recent development, SignDesk is thrilled to announce that we have partnered with Jai Kisan, a digital lending platform for farmers in India, to enable digital loan repayments. Through this collaboration, Jai Kisan’s borrowers can now easily make loan repayments courtesy SignDesk’s secure and user-friendly Physical NACH and API NACH solutions.
Non-Banking Financial Companies (NBFCs) are financial institutions that offer financial services such as loans, credit facilities, and investments but do not hold a banking license. NBFCs like Jai Kisan leveraged NACH recurring payments to receive loan repayments from its customers on time and reduce their workload significantly.
The National Automated Clearing House (NACH) system enables the automatic and safe electronic transfer of cash from the borrower’s account to the lender’s account on the due date to expedite the loan repayment procedure. NACH, in simple terms, can be described as an electronic payment system that streamlines fund transfers between banks and NBFCs.
In line with their vision, Jai Kisan aims to provide credit access to businesses and individuals operating in rural areas through their flagship rural financing product, Bharat Khata. However, one of the biggest challenges Jai Kisan faced was the lack of digital infrastructure in these regions, which made loan disbursement and repayment highly challenging.
Jai Kisan attempted to solve this issue by collecting NACH challans in large quantities from borrowers and then transferring them to banks. During this process, they recognized the limitations of collecting and transferring NACH challans in bulk, realizing the need for a more efficient registration method.
SignDesk’s recurring payment automation solution helped Jai Kisan streamline their customer’s loan repayment process by enabling automated mandate registration across banks.
Jai Kisan has extensively utilized SignDesk’s eNACH eMandate solution, to provide credit access to rural businesses and individuals using Physical Nach. This was made possible due to the valuable support provided by SignDesk, which helped Jai Kisan seamlessly register NACH.
Challenges in NACH Collection
Jai Kisan faced multiple challenges with their NACH registration process, resolved by adopting SignDesk’s eNACH eMandate solution- Link.It.
The traditional mandate registration procedure often comes with several shortcomings which make it difficult for firms to track overdue payments, maintain regulatory compliance, monitor payment status, and ensure the security of their customer’s data. The paper-based mandate collection process involved physically collecting NACH forms from borrowers, which was time-consuming, prone to errors, and posed logistical challenges.
Jai Kisan collected NACH in the following manner:
- Jai Kisan sanctions loans to the farmers/clients
- Farmers/Clients fill out the mandate form for loan repayment
- Jai Kisan team collects the form from the clients and sends it to the bank
- Banks register the mandate, and the periodic debits for repayment begin
Challenges In NACH Collection For Firms
The following problems resulted from the manual process:
- High Failure Rates:
Jai Kisan faced significant obstacles in its financing pipelines due to inconsistent manual mandate registration processes that frequently led to failures. This led to friction in the whole payment recollection process.
- Delayed Processes:
Jai Kisan’s team spent several hours to days registering and couriering a single batch of mandates. This caused significant delays in their operations.
- Lack of Efficiency:
Processing mandate documents manually posed a high risk for Jai Kisan as the collection, organization, and transfer of forms across different locations increased the chances of errors. In addition, they spend a significant portion of time waiting for mandate registration which led to a significant loss of efficiency and reduced team productivity.
- Logistical Issues:
Specific teams had to be created and allocated for collecting NACH forms. These teams had to coordinate with various customers and bank staff across multiple banks to ensure mandates are registered successfully on time. This posed a logistical challenge for Jai Kisan due to the multiple dependencies involved.
Jai Kisan had to overcome these obstacles by adopting a secure digital payment recollection method.
Link. It- Automated Recurring Payments: The Path Ahead for Jai Kisan
Automated payment collection systems are essential for NBFCs like Jai Kisan since they enable prompt and effective loan repayment processes. Electronic payment collection for NBFCs is made possible by automated systems like NACH, which allows real-time tracking of payment progress while reducing mistakes and delays.
Automating recurring payment processes simplifies loan repayment collection, boosts NBFCs’ operational effectiveness, and lowers costs. SignDesk assisted Jai Kisan in achieving a smooth process of collecting payments from borrowers. The NBFC leveraged SignDesk’s eNACH eMandate solution to streamline and digitize their clients’ mandate registration process.
By using Link.It, SignDesk’s eNACH solution, Jai Kisan has been able to streamline their payment recollection processes by streamlining physical Nach collection. Link.It helped reduce the time and effort required for these transactions and streamlined digital mandate registration for Jai Kisan
Utilizing the eMandate solution helped Jai Kisan automate loan repayment steps, improve productivity and facilitate quick and accurate NACH document registration. Here’s how Jai Kisan accomplished this:
Physical NACH Registration Process
With SignDesk, Jai Kisan’s Physical NACH registration process became quick and easy to process and could be completed in just a few simple steps:
Step 1: Fill and sign the NACH challan
The borrower must fill and sign the NACH challan to initiate the mandate registration process.
Step 2: Scan the forms using the SignDesk app
The QR code on the NACH challan is scanned using the SignDesk app and the challan’s image is uploaded.
Step 3: Send mandate info to NPCI in bulk
The scanned images of the NACH challans are sent to the National Payments Corporation of India (NPCI) in bulk. NPCI forwards the mandates to the destination banks where the borrowers hold their accounts.
Step 4: Registration of physical NACH mandates by destination banks
The destination banks review the mandates sent by NPCI and either approve or reject them within 5-10 days.
Step 5: Jai Kisan & borrowers receive alerts
Once the destination banks approve or reject the mandates, Jai Kisan and its clients receive notifications informing them of the status of the mandates.
API NACH Registration Process
With SignDesk’s Physical NACH solution, Jai Kisan was able to simplify clients’ mandate registration process. However, the process still required its clients to fill out the mandate forms.
To solve this problem, Jai Kisan used SignDesk’s API NACH solution which streamlined the NACH registration process further. Jai Kisan set up a fully online NACH registration procedure with SignDesk’s API NACH solution.
By following these simple steps, the NBFC could easily complete API NACH registration and experienced the advantages of effortless transactions:
- Data Collection
Jai Kisan submits a request to SignDesk for mandates pertaining to a set of borrowers, following which SignDesk procures the required data.
- Invitation
SignDesk notifies the customer via email or SMS to review the mandate information. The mandate details are auto-filled and the client can preview the collected data prior to submission.
- Submission
The customer reviews the NACH information and submits it to the NPCI-ONMAGS portal for registration.
- Validation
The customer authenticates their debit card or NetBanking information to validate the mandate
- Mandate Registration
The customer’s bank accepts or rejects the mandate and the appropriate alerts are forwarded to stakeholders.
Using the API NACH solution made it easier for Jai Kisan to register mandates of its customers, minimize mistakes and delays, and improve operational efficiency. The implementation made the process simpler and more secure, helping Jai Kisan register mandates online, in real time.
Advantages of eMandates for NBFCs and Fintech Firms
Jai Kisan was able to streamline their NACH collection procedure and shorten turnaround times by using Link.It, SignDesk’s recurring payment automation solution.
With Link.It, businesses can automate their loan recollection process by streamlining their recurring payment registration and payment collection. Enabling extensive digitalization helped improve the process of mandate registration and simplified Jai Kisan’s customer loan payback procedure.
Employing eMandates created a workflow that was not only more efficient but also improved productivity. Using it, Jai Kisan was able to achieve:
- Real-Time Registration
Previously, collecting mandate forms and sending them to banks for registration was time-consuming and could take weeks. Using API NACH enabled mandates to be registered in real-time while Physical NACH registration could be completed in 5-15 days.
- Smart Dashboard
When the collection of mandates was done manually, it took up a lot of time and effort of Jai Kisan’s teams. Additionally, storage and keeping track of multiple files was challenging. The presence of an intelligent dashboard helped the authorized personnel to easily monitor the progress of mandate registration.
- QR Codes and OCR Integration
Using Physical NACH allowed Jai Kisan to simply scan mandate forms filled by borrowers and upload them, eliminating the need for in-person form collection and transportation.
- Robust APIs
Previously, Jai Kisan faced several challenges and manual dependencies for procedures like mandate form collection, storage, transport, and registration. Using APIs helped populate NACH forms and send them to banks for registration.
Advantages of eMandate for NBFC & Fintech Firms
eMandate Registration With SignDesk- The Impact
Integrating with Physical NACH & Nach APIs can be vital for NBFCs as it allows them to accelerate their payment collection process and focus on delivering exceptional financial services to their customers. As a rural lending Fintech, Jai Kisan has made substantial use of eNACH eMandate to guarantee that rural companies and people can borrow money smoothly.
SignDesk helped Jai Kisan’s NACH registration process operate smoothly by providing hands-on assistance, onboarding training, and documentation for the Physical and API NACH solutions.
Want to know more about the impact? Download the case study to know more details about how Jai Kisan streamlined customers’ loan repayment process with SignDesk.