Bandhan Bank, which remains cautious about growing its loan portfolio in general banking space, is planning to support small microfinance institutions (MFIs) and homegrown startups by funding them.
The city-based private sector lender, which commenced operations in August this year and is the first instance in the country of a microfinance entity transforming in to a universal bank, is drawing up plans to lend to small MFIs to help them grow. “We are planning to fund some small microfinance institutions to develop them. We are planning to provide loans to them,” managing director and CEO Chandra Shekhar Ghosh said.
The bank is providing loans under micro banking space, but it is yet to start full-scale general banking as it wants to grow loan portfolio cautiously when the banking industry is worried over the high level of non-performing assets.
“We would be very careful on lending as NPA is growing in the banking industry,” Ghosh said. As an MFI, Bandhan had a loan repayment record of 99%.
The lender is, however, planning to provide loans to homegrown startups if it finds their business models viable.
As West Bengal has created a R200 crore venture capital funds to support startups, Bandhan is planning to provide debt funds to promote them. “In MSME sector we want to promote startup companies…We will provide them funds if their business models and visions are good,” Ghosh informed.
In retail segment, the bank will provide small ticket home loans between R5 lakh and R15 lakh. It has also chalked out a plan to give up to R1 lakh loans to 1,000 rickshaw pullers for buying electric vehicles like Toto cars for rural transportation.
The bank expects its microfinance loan portfolio would be close to R13,000 crore by this fiscal-end. In the last financial year, it had a loan portfolio of over R10,000 crore. Currently, its deposit base stands R4,500 crore.