The Reserve Bank of India’s decision to award Kolkatabased Bandhan Financial Services a banking licence along with IDFC surprised many people since better known companies such as Aditya Birla Nuvo, Bajaj Finserv andReliance Capital missed the bus.
It is a measure of the microfinance lender’s efforts that it financed the dreams of a slice of the country’s 25 crore unbanked households while banks have failed to reach 42 per cent of them even after 45 years of bank nationalisation. Bandhan has created a pool of Rs 58 lakh poor borrowers since Chandra Shekhar Ghosh founded the company in 2001 and turned it into the country’s largest micro lender with outstanding loans of Rs 6,446 crore.
At present it lends at 22.4 per cent a year on reducing balance and the transition into a bank will allow it to reduce its lending rate.
“Bandhan has worked as a change agent for the rural poor,” says Ghosh. “To serve people is a major challenge and our employees have lived up to the challenge selflessly and helped Bandhan to rise to this level.”