Suspense crime, Digital Desk : A huge part of the Indian population is still dependent on high-interest loans that charge fees of almost 10% each month. For Sahamati CEO BG Mahesh, the initiative can only be deemed successful when these communities are reached within the AA ecosystem and offered low interest credit access.

Sahamati’s Goal Towards Achieving Universal Access to Services

Sahamati is the voice of all association of accounting (AA) services registered with the Reserve Bank of India which parleys on behalf of Sahamati’s members. These companies assist individuals as well as businesses with the safe sharing of financial information for the purpose of lending. According to Mahesh, the vision of Sahamati is to provide pivileged mastercard holders and shop owners like auto drivers means to withdraw clones on a daily basis through the mechanism of AA.

Utilizing Financial Information in a Different Way Other than Credit Scoring

In the case that a credit score is unavailable, financial data such as bank statement, GST, and even payments towards insurance will be handy in determining how credit worthy the individual is. In this regard, Mahesh can much easier gain access to these alternative data sources.

Enhancing the AA Ecosystem

The AA system is currently processing more than 350k new consents each day, with monthly loan issuances surpassing ten thousand crores each month. Although Mahesh had high hopes about the AK adoption, he believes that a framework for growth without restriction is essential for system pitfalls and a solid groundwork is ensured.

AA Ecosystem and Framework Primary Gaps and Hurdles

Unfortunately, the AA ecosystem has several potential areas of friction:

Some of the AAs, like PhonePe, who have exited the AA space deem the benefits too minimal, too costly to justify the investment.

Many of the fintechs still use traditional credit check mechanisms instead of utilizing AA data.

The multi bank and multi AA integration is very complex and resource demanding.

Mahesh did not shy away from emphasizing a need for great integrations, but highlighted the challenges that lay ahead.

SahamatiNet: Integrating Into Banks and AAs

To cope with the technical design challenges, SahamatiNet has build a layer of technology to change the way banks interface with AA companies, increasing integration easeness. This initiative aims at cutting operational costs while speeding up adoption into the ecosystem.

So, AAs are not regulated by any single authority, but operate autonomously at stand alone AAs.

Undiscerned by AAs: Risk Management and Financial Impact

A crucial downside of standalone AA companies is the decline in transaction fees. Pricing policies, however, are still a matter of individual business and that’s not in the purview of Sahamati to dictate.

Continuous Support from the Industry and Growth

Sahamati’s focus on AA model awareness education for institutions in its initial year of establishment in 2019 as a non-profit. Now, over 177 FIPs and about 630 FIUs form the ecosystem (with the FIU base increasing perpetually).

Mahesh noted that while the AA’s progress, particularly in terms of market penetration, might seem slow, developing a robust, secure, and scalable architecture for financial data exchange centers is inherently time-consuming.

Incessant Communication with Other Powerful Stakeholders

Sahamati engages the RBI supervisory authority and the ministry of finance on system updates and upgrades. As noted by Mahesh, government engagement has been constructive, particularly in regard to allowing deeper access to non-banking financial records such as tax files.

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