Microfinance firm from Bengal makes it to Forbes list

Written by Economy Bureau | Kolkata, Dec 25 | Updated: Dec 26 2007, 05:00am hrs
He started with a Rs 20 lakh loan from a bank, five years down the line his outstanding has touched Rs 250 crore and is eyeing a whopping Rs 1,000 crore in next two years.

Chandra Shekhar Ghosh, founder and chief executive officer of Bandhan, has made it to the Forbes magazines first-ever listing of the worlds top 50 Microfinance Institutions, next to only ASA of Bangladesh and way above Nobel laureate Mohammed Yunus Grameen Bank.

The crucial part is selecting workers, said Ghosh, whose organisation has 23,000 employees on its rolls. We select workers who are graduate but poor. Their understanding of the ground realities is much better than others.

Bandhan, started five years back, has 425 branches, 8.25 lakh members or borrowers and an outstanding amount of Rs 250 crore disbursing Rs 55 crore every month. We are looking at an outstanding amount of Rs 1,000 crore by 2010, he said.

The Forbes list, published five days back, has seven Indian Micro finance institutions a similar number that Bangladesh has. Headquartered in West Bengal, Bandhan has presence in Tripura, Assam, Bihar, Jharkhand and Orissa, the poorer states of the country. Some of our workers were rickshaw pullers once, said Ghosh who worked in a sweetmeat shop in Bangladesh to meet expenses for his education.

While less than 2% of the MFIs in the world are able to reach 1 lakh clients, Bandhan is scouting for a member base of 20 lakh in next two years.

Ghosh has been contacted by a fellow of Massachusets Institute of Technology for a research project. The recipe for success lies in the simple and focussed approach, Ghosh said. The sense of ownership he nurtured among the workers has propelled Bandhan to a 600% growthenvied and revered.