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Thursday, May 10, 2012

Bandhan Financial Services aims to grow 30% this fiscal

Microfinance company Bandhan Financial Services has set a 30% growth target for 2012-13 while it grew by 50% last fiscal.

Chandra Shekhar Ghosh, the chairman and managing director of the country's largest MFI by outstanding loans said the new operational guidelines would bring down the possibility of exponential growth and encourage the micro lenders to consolidate their businesses.

""We are told to provide two-year loans instead of one year and therefore the scope to step up the loan every year does not exist any more,"" Ghosh told ET. ""It is not easy to acquire new customers,"" he said.

Reserve Bank of India has also said total indebtedness of the micro borrower should not exceed Rs 50,000. It said that MFIs have to lend without a collateral and with a cap of Rs 35,000 in the first cycle and Rs 50,000 in subsequent cycles. The banking regulator has started regulating NBFC-MFIs since last year to guide the troubled sector out of the danger of a virtual collapse.

While most MFIs in Andhra Pradesh had to go for debt restructuring to avoid shut down, the entities outside Andhra were better off and even managed to grow business.

Bandhan aims to enhance its outstanding loan portfolio to Rs 4,850 crore by end of this fiscal from Rs 3,739 crore on March 2012. SKS Microfinance, the country's sole listed MFI, has Rs 1,669 crore of outstanding loans.

It plans to raise Rs 2,500 crore worth of resources this year to lend to poor people.

""We are reviewing the new securitisation guidelines as it would impact our fund raising strategy,"" Ghosh said. The MFI had inked securitisation deals worth Rs 723 crore last fiscal, including one Rs 500-crore transaction with IDBI Bank.

The Kolkata-based MFI operates in 18 states through a network of 1,553 branches. It has catered to over 37 lakh poor borrowers.

Source: EconomicTimes


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