Running a Pigmy (Daily Deposit) Savings Scheme Alongside Your Loan Book

A pigmy scheme — sometimes called a daily deposit or recurring deposit scheme — flips the loan relationship around: instead of lending money and collecting repayments, you collect small regular deposits from a customer and return a lump sum (sometimes with a bonus) once the scheme matures. For many small finance businesses in India, it isn't a separate business at all — it's the same field agent, the same daily visit, just moving money in the other direction.

What a Pigmy Scheme Actually Looks Like

A customer agrees to pay a fixed amount — say ₹50 a day — for a fixed term, commonly 100 days, 11 months, or a year depending on the frequency. The agent collects it on the same visit as loan installments, marks it against that customer's account, and at the end of the term the customer receives the full accumulated amount. Some schemes add a small bonus at maturity as an incentive to complete the full term rather than withdraw early.

Why It Pairs Naturally With Loan Collection

Running both products through the same field visit isn't just convenient — it changes the relationship. A customer who sees the same agent weekly for a savings deposit, not just for loan recovery, experiences the visit as a service rather than only a demand for repayment. That goodwill tends to carry over: customers with an active pigmy account alongside a loan are, anecdotally, easier to collect from, since the agent's presence isn't purely associated with chasing money.

Setting Frequency, Duration, and Maturity Value

The three settings that define a scheme are frequency (daily, weekly, or monthly), duration (how many installments make up the full term), and the per-installment amount. Multiply the two and you get the maturity value before any bonus — straightforward in principle, but worth tracking per account rather than recalculating by hand, especially once a business is running schemes for hundreds of customers with different start dates.

Handling Early Withdrawal Without Losing Trust

Customers do sometimes need their money before maturity — a medical expense, a wedding, a bad month. A scheme that makes early withdrawal impossible or punitive enough to feel like a trap will cost you trust with every customer who hears about it secondhand. The more sustainable approach is a clearly stated early-withdrawal rule (for example, principal only, no bonus, recorded with a reason) set once and applied consistently, rather than negotiated case by case.