S.M.I.L.E. Microfinance Limited is a non-banking finance company
(NBFC), registered with and regulated by Reserve Bank of India
(RBI). They are engaged in providing micro finance services to women
from poor segments of rural and urban Tamil Nadu. Their vision is to
help. They believe they can achieve this by providing financial and
nonfinancial services to poor and thereby recognizing them as
bankable segments.
It was started in 2004 to provide credit services to the urban and
rural poor in the state of Tamil Nadu. The company started as
non-deposit taking NBFC in January 2006 and later on received an MFI
license in May 2015
SML provides credit to economically-backward women through the joint
liability group mechanism. This model ensures credit discipline
through weekly/ fortnightly / monthly meetings, mutual support and
peer pressure within the group to make sure individual members are
diligent in utilizing the loan and are prompt in repaying the loans.
Because of this model failure of any individual member to repay the
loan would ensure the group to make the payment on behalf of
defaulting member or they would use peer pressure to ensure timely
payment.
They have first mover advantage in Chennai as they were the first
urban MFI to set up operations in 2005. Their loan and profitable
track record and our focus on women empowerment are their distinct
competitive advantage. They finance the expansion by accessing both
debt and equity. Tamil Nadu region accounts for the majority of the
portfolio for SMFL. The two main districts i.e. Chennai and Madurai
account for 28% of total AUM as on 31.03.2020