Bandhan Bank and Bank of America have virtually nothing in common and probably never will. But incredible as it may sound, Amadeo Giannini, much like Chandra Shekhar Ghosh, was a big believer in lending to the small borrower or the “little fellow”.
Son of an immigrant, Giannini gave up his job at a bank that catered to the wealthy to start Bank of Italy that would help the local immigrant population in the US. He went on to build Bank of America (BoA).
Ghosh too started out in very modest circumstances at a microfinance institution — Village Financial Services — and later set up his own MFI, Bandhan Financial Services, in 2001.
Can Bandhan Bank scale the heights BoA has? Probably not. But the microfinance business that 57-year-old Ghosh has single-handedly built is no less impressive. The growth has come at a remarkably rapid pace — by August 2015, it accounted for about a tenth of India’s total MFI portfolio of around R1.1 lakh crore and in just 15 years, BFS had rolled out a pan-India network of more than 2,000 branches, nearly twice that of its closest competitor.
It probably helped that no other MFI was too keen to go east whereas Ghosh was born in Agartala, studied in Bangladesh and lived in Konnagar, near Kolkata, pretty much a Bengali-speaking world. Unassuming as he is, Ghosh was a risk-taker, having even been indebted to moneylenders at one point after having been turned down by Small Industries Development Bank because he could not produce balance sheets for three years. Later in 2002, though, he was able to source a loan of R20 lakh.
What really sets Ghosh apart from the rest of MFI pack is his emphasis on education as a means to eliminate poverty — the 300 plus schools that he set up have enriched the lives of more than 10,000 students. There is a strong focus on empowering women — 70% of the students are girls and all the MFI’s loans are to women. But most important, he’s a good banker and knows the importance of a clean balance sheet. That. more than anything else, will help him as he sets out to build Bandhan Bank.