The BMB will provide collateral-free loans for amounts up to Rs 1 crore, which will instead be covered under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
For loans availed for smaller amounts such as Rs 20,000, the bank will completely waive off the requirement for collateral.
Women are moderate risk takers. So the question of collateral should not really arise, said Usha Ananthasubramanian, CMD, BMB. The issue of collateral also tends to discourage women from availing loans, she pointed out, since much of the immovable property tends to be in the name of the husband or father. The bank, which was set up in November last year, has begun to receive queries for its various credit schemes such as kitchen loan, loans to set up beauty parlours, day-care centres and catering units apart from plain vanilla products such as car and education loans.
The CGTMSE is a credit guarantee scheme, where a premium is paid either by the lender or the applicant, provides a guarantee cover for up to 80 per cent of loans availed by women owned or operated micro- and small enterprises.
The BMB, which has set up nine branches, plans to scale up operations and set up another 16 branches in various state capitals this fiscal. From 2014-15, it will expand to Tier II cities and smaller towns as well as unbanked areas.
As part of its expansion, it will recruit about 300 candidates over the next few months and is also looking at recruiting people who have left the banking industry but wish to return.
We have a staff strength of about 150 officials right now, but they are on a three year deputation from other banks. The direct recruits will be trained to take their places when the tenure comes an end and also man the new branches, said Ananthasubramanian. The BMB has already recruited about 110 such candidates through exams conducted by the Institute of Banking Personnel Selection.
The mature recruitments, which would include economists, agriculture specialists, marketing personnel, etc are likely to be appointed at a higher scale.