ICICI Seeks 25 Million Rural Clients to Lift Growth
Friday, November 10, 2006
ICICI Bank Ltd., India’s biggest by market value, plans to lend to 25 million rural clients in five years to sustain record loan growth as the government curbs credit to customers in the cities.
The bank will use branches, franchises, telephone kiosks and automated teller machines to lift its rural customer base eightfold, Deputy Managing Director Chanda Kochhar said in an interview in Hyderabad, southern India. Mumbai-based ICICI aims to screen borrowers and approve loans of as little as $100 at sites located every 10 kilometers (6 miles) across India.
Borrowers outside cities in India pay more than double the interest rates of their urban counterparts and default rates are lower. Finance Minister Palaniappan Chidambaram said he wants banks to cut lending to buyers of homes, cars and household goods to prevent an asset bubble and focus on the 700 million- strong rural sector.
ICICI Bank’s rural lending doubled to 165 billion rupees ($3.6 billion) in the year ended March. That’s only about 10 percent of its outstanding loans. The bank, which started lending in villages about four years ago, tripled the number of rural clients to 3.2 million last year from 1 million.
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