Microfinance boom catches attention of private banks in India
The rapid growth in the microfinance space seems to have caught the attention of private sector banks, which have lately been getting aggressive in tapping the opportunity at the bottom of the pyramid, either through acquisition of microfinance firms or by buying minority stakes in them.
On 30 September, Mint reported Utkarsh Micro Finance Pvt. Ltd raised Rs395 crore from domestic institutional investors, as the firm prepares to make a transition to a small finance bank. One of the key investors in the investment round was private sector bank RBL Bank Ltd, which picked up a 10% stake in the company.
Also on 30 September, private sector lender Kotak Mahindra Bank Ltd said it had acquired BSS Microfinance Pvt. Ltd for Rs139.2 crore. In July, IDFC Bank Ltd acquired a Tamil Nadu- based microfinance institution (MFI) called Grama Vidiyal for an undisclosed amount.