July 2012

Targeting the Hardcore Poor

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“We at Bandhan believe that Financial Inclusion goes hand in hand with Financial Literacy,” says Chandra Shekhar Ghosh, Chairman & Managing Director, Bandhan in conversation with Nayana Singh

Chandra Shekhar Ghosh,
Chairman & Managing Director,
Bandhan

With micro-finance and inclusive banking are you seeing a silent revolution happening in rural India?

The microfinance revolution is already on. Rural India of 15 years back is completely different from what it is today! Many factors are behind this dynamic change, including microfinance and inclusive banking. MFIs are complementing the banks in the deeper pockets where the banks are not being able to reach due to infrastructural reasons and highcost factor. The easy availability of credit due to MFIs and the additional efforts of the banks in the domain of financial inclusion have made the rural folk self-reliant and self-employed to a certain extent. In fact, people who were financially excluded previously are now getting included. The MFIs have helped them to stay away from the clutches of the moneylenders to an appreciable extent. The increase in the family income has invariably led to elevation in the aspirational instincts of the underprivileged households. They have started recognising the important of education, health and the like. If the MFIs and the banks continue to deliver similar services, we’ll see a makeover of the rural India 10 years down the line.

What are your best achievements in the financial inclusion space?

We have been delivering microfinance services for 10 years now and we believe that it is an appropriate tool for financial inclusion. The fact that we have been able to reach out and serve more than 3.8 million poor women in a span of 10 years is encouraging. We envision reaching out to 10 million by 2020. We at Bandhan believe that Financial Inclusion goes hand in hand with Financial Literacy. Imparting financial literacy is not in vogue in rural India. Bandhan implements its microfinance activities by way of individual lending through group formation model. Bandhan places a great deal of importance on the weekly group meetings. They are not just meant for financial transactions, the emphasis is also on sensitising women on important issues, financial Literacy being one of them. Presently, more than 10,000 such ultra-poor families have been covered under our ‘Targeting the Hardcore Poor’ (THP) Programme. Some of the beneficiaries who are on the threshold of graduation have already been linked with banks and post offices operational in their adjoining areas. Savings accounts have been created individually for these women who hail from backward districts of West Bengal, Assam, Tripura and Bihar.

Tell us about the micro financing solutions that you are offering in India?

Bandhan has been engaged in the delivery of microfinance services for 10 years now. We are operating in the wide geography of 18 Indian States and Union Territories with special focus on Eastern and North Eastern part of the country. We are catering to more than 3.8 million poor women through a strong branch network of over 1,600 branches with a committed work force of nearly 10,000 employees. Our loan book stands at `37,356 million and we have a consistent repayment rate of over 99 percent. We offer a host of services to the underprivileged section – beginning from small micro loans for starters to micro enterprise loans of slightly large amounts for those looking at expansion and also Micro Small and Medium Enterprise (MSME) loans to potential entrepreneurs. Besides the above business loans, we also extend support for emergency health needs and child education requirements in the form of health and education loans respectively. Apart from these, all our borrowers are covered with LIC. We offer remittance services in association with Western Union and pension services in association with Pension Fund & Regulatory Development Authority (PFRDA), Ministry of Finance, Government of India.

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