Mumbai: India Post Payments Bank (IPPB) has partnered with the Small Industries Development Bank of India (SIDBI) to extend financial and other support services to MSMEs in rural and remote areas.
SIDBI provides credit to small businesses, while IPPB provides banking transaction services, including onboarding merchants for digital transactions. Payments banks are not allowed to provide credit but can partner with other institutions for distribution.
The partnership aims will utilise IPPB’s rural reach and deep connect with village-level communities through postal department employees and SIDBI’s lending and credit risk assessment models to reach informal and micro enterprises.
IPPB shall also support SIDBI’s customers in digitising the payment mechanisms through its merchant onboarding system and collection solutions like UPI, QR-based solutions, etc. The two Institutions will also undertake joint programmes to upgrade the skills of Dak Sevaks in supporting credit and other services to micro-enterprises.
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Sivasubramanian Ramann, CMD SIDBI and J. Venkatramu, MD & CEO, IPPB signed the agreement on October 11, 2023, in the presence of Vivek Joshi, secretary, department of financial services and Vandita Kaul, member (Banking and DBT), postal services board, department of posts.
Along with signing of the MoU, the two banks announced a hackathon involving the fintech community for innovation in financial services in rural areas as also a Swavalamban Challenge Fund to promote rural livelihood enterprises.
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“We look forward to a fruitful and meaningful partnership with IPPB which can make a positive impact on millions of informal rural enterprises in the country by improving their access to financial services and financial literacy,” said Ramann.
IPPB is 100% owned by the government to reach the last mile, leveraging the Indian Postal network comprising 155,000 Post Offices (135,000 in rural areas) and 300,000 Postal employees.
The payment bank provides its services without paper through a CBS-integrated smartphone and biometric device.
