Microfinance is not just a micro loan given to a poor and enterprising woman: the model succeeds because it has a social touch or human connect. The hand-holding of customers is an integral part of the microfinance world. Customers are the bedrock of the business as the loans are unsecured, and showing them the ropes of financial literacy is an important role for VFS Capital Ltd.
Financial literacy is done through Customer Awareness Training (CAT). VFS branches conduct CAT regularly, bringing groups of customers together and teaching them the best practices regarding borrowing, use of funds, and repayment.
Utilization and repayment of loans according to an agreed schedule is the crux of financial literacy. Customers are made aware of the importance of utilizing the loan effectively and on time to improve their income and livelihood. The loan being unsecured, CAT plays a vital in improving the socio-economic of the underprivileged.
At the CAT sessions, VFS officers and customers also discuss local problems, use of the loan, repayment, the dangers of over-lending, and financial literacy. VFS also spreads social messages on menstrual hygiene, child marriage, dowry, and the prevention of waterborne diseases.