Yes Bank of India is currently interested in starting a non-deposit taking microfinance subsidiary as a Non-Banking Finance Company (NBFC). Bank president (corporate finance and development banking) Somak Ghosh announced that Yes Bank already has a contract with US based microfinance agency ACCION; ACCION would help Yes Bank assess credit worthiness of individuals, do risk analysis, and prepare loan appraisals.
While Yes Bank submits a proposal regarding the start-up of the subsidiary to the Reserve Bank of India and awaits approval, the bank plans on first starting a microfinance unit within the bank aimed at the urban poor with the mission of urban renewal. “Initially, say in the first six months, our target will be on increasing the number of clients, however, in the next two years, we expect to have a business of Rs 150 to Rs 200 crore (33 million to 44 million USD) from the microfinance division,” Ghosh said.
Yes Bank began operations August 2004 and is based in Mumbai, India. Total income mid-year 2007 was up 182.2% to Rs. 166.0 crore (36.6 million USD) compared to Rs. 58.8 crore (12.3 million USD) mid-year 2006. It had return on assets of 1.5% and return on equity of 14.2% mid-year 2007. More data for fiscal year 2007 can be found here.
ACCION International is a private, nonprofit organization that provides microenterprise loans, business training, and other financial services. ACCION was founded in 1961 and now provides loans in 22 countries across the globe. In 2005 the total loan portfolio for all of its partners was $1.34 billion. At the end of 2005, its total assets amounted to $45 million. In September 2005 ACCION joined Unitus, another microfinance network, in creating the Unitus-ACCION Alliance for India; one of the objectives of the alliance is the development of long-term partnerships with banks in India planning to launch microfinance programs.
by Lori Chang, MicroCapital.org Writer
Sources:
1) Zeenews.com: Yes Bank to seek RBI nod for micro-finance subsidiary
2) ACCION: Homepage
3) Reserve Bank of India: Homepage
4) Moneycontrol.com: Yes Bank’s total income for Q2-FY2007 up 182.2% to Rs 166cr
5) ACCION: Homepage
6) ACCION: Press release
7) ACCION: 2005 Audited Financial Statements
8) ACCION: Unitus-ACCION Alliance for India
9) Business Standard: Interview with Rana Kapoor, Managing Director and CEO, Yes Bank
10) Times Online: India’s newest bank chases wealth online
