In India, Bandhan’s banking licence signals competition for rural microfinance

Monday, April 14, 2014

One big implication of the grant of a banking licence toBandhan Financial Services on the basis of its 13-year record in micro-lending to the poor and disadvantaged is the likely impact on the nascent market for deposits in rural areas.

In fact, spurred by like developments, at least two mainstream lenders operating in West Bengal (Bandhan is based in this state and accounts for nearly three-fourths of the micro finance market here) — YES Bank and HDFC Bank- have started ‘doorstep’ banking in rural areas for credit and deposit mobilisation. HDFC Bank has been employing own field staff; YES appears to have tied up with non-government organisations (NGOs). The two banks would not comment on the extent of their micro finance operations.

Source: Business Standard (link opens in a new window)