Srishti (Micro Enterprise Loan)
Bandhan realized that there are certain Suchana (Micro Loan clients) who have graduated in terms of their capacities to take and manage a higher loan. These clients demand a much higher loan cycle. Bandhan decided to cater to their needs by introducing graduate product, Srishti.
Loan size: Rs 25,000 – Rs 50,000.
Sobre Você
Sobre Você
Nome
Chandra Shekhar
Sobrenome
Ghosh
Website
Your Organization
Bandhan Financial Services Private Limited
Country
Índia, WB
Sobre Sua Organização
Nome da Organização
Bandhan Financial Services Private Limited
Página da organização na internet
Telefone da organização
+91 33 2334 6751 - 55
Endereço da organização
EC-76, Sector-1, Salt Lake City, Kolkata - 700064, West Bengal, India
País da organização
Índia, WB
Organization Type
Private Institution
As informações que você fornecer aqui serão usadas para preencher todas as partes do seu perfil deixadas em branco, como interesses, informação da organização e website. Nenhuma informação do contato será tornada público. Por favor, desmarque aqui se você não deseja que isso aconteça..
Your solution
Name Your solution
Srishti (Micro Enterprise Loan)
Describe Your Solution
Bandhan realized that there are certain Suchana (Micro Loan clients) who have graduated in terms of their capacities to take and manage a higher loan. These clients demand a much higher loan cycle. Bandhan decided to cater to their needs by introducing graduate product, Srishti.
Loan size: Rs 25,000 – Rs 50,000.
Country your work focuses on
Índia
If multiple countries, please list them here. If your solution targets an entire region, please select it below
Region(s) your solution focuses on:
Range of turnover in your target firms, in USD
More than 50 Million.
Average turnover in USD of your target firm
$327.18 million – Total turnover for Bandhan Financial Services Pvt. Ltd. $ 30.08 million – Turnover for Srishti
Number of employees in your target firms
More than 150.
Average number of employees of your target firm
8230
Specify the size, average and range of expected loans or investments in each target firm
Loans are offered to the clients in the range of Rs 25,000 – Rs 50,000 to propel the growth of their burgeoning businesses. Bandhan members who have completed at least one loan cycle and are involved in an income-generating activity are eligible for the micro enterprise loans viz. Srishti. Since this operates as a graduation model, the borrower has to possess capital equivalent to the value of the loan amount. Disbursed in the individual-lending model, this generates employment opportunity for at least one poor individual.
What stage is your solution in?
Em execução entre 1 e 5 anos
INOVAÇÃO
What makes your innovative solution unique?
Bandhan started off with its core product, Suchana that offers small ticket size loans to low income, economically active clients. Loans in the range of Rs 1,000 – Rs 25,000 are disbursed under this scheme. But after working for three years, Bandhan decided to introduce a graduate product which would enable successful Srishti clients to acquire loans of higher sizes. Srishti (Micro Enterprise Program) was launched in January 2006 to cater to the needs of project/business expansion which demands a higher loan cycle, on realizing that certain members required this service. The MEP is a slight modification of the Micro Loan Product which has served these borrowers well since its inception. The uniqueness of this product lies in the fact that it is client need based. The micro loan product was specifically meant for a population hovering around the poverty line. It empowered them to become financially self-reliant, but with due course of time their aspiration levels as well as their capacity to generate more income was enhanced considerably. This created a void which was filled up eventually by the introduction of the Srishti loan. The Srishti loan envisioned to create micro entrepreneurs out of the graduate Suchana clients. Thus, it became an indispensable tool for sustainable development of the poor budding women entrepreneurs.
How does your proposed innovation leverage public intervention in catalyzing private SME finance?
Bandhan does not really work in direct partnership with either the government or any company. But whenever we commence work in any new area, we first of all, introduce ourselves to the local government leaders, community party etc. Their support and co-operation is essential for the smooth running of our activities.
What barriers does your proposed solution address?
Informality, Unavailability of financial products tailored to SME needs, Lack of institutional capacity of financial intermediaries, Lack of financing to women entrepreneurs.
If you checked any of these barriers, describe how your solution addresses them
At the very outset this loan product along with its predecessor Suchana tries to address the problem of informality. In the rural and semi-urban areas of India the concept of money-lending is still prevalent. Poverty being one of the key concerns, a large number of people does not have access to capital for a start-up business. Under such circumstances financial intervention is provided by the local money-lenders who charge exorbitant rates of interest. Lack of loan providers, force these people to become victims of fraud and high-handedness of the money-lenders. The rates charged by the money-lenders are so high that in order to pay back the loan amount they are compelled to acquire a second round of loans from another source. This results in the creation of a never-ending debt-trap. To compound the already existing problems, the village community is blatantly patriarchal in nature. The status of the women in the villages is highly deplorable and their activities are restricted within the households. They do not have form of financial independence and men disregard them as mere nonentities in family decision-making. The Srishti loan addresses these two critical issues. It is a winning combination of medium scale formal loans which goes directly into the hands of enterprising but needy women and results in their social and economic upliftment.
In the formal banking sector loans of such small sizes are not disbursed, hence not meeting the requirement of the poor rural families. In the process they get bypassed from the mainstream banking benefits. Bandhan with the loan option of Srishti provides specifically the side-lined women entrepreneurs the appropriate amount which is in conformity with their needs. Thus, it is easier for them to manage the loan portfolio.
Impacto
Provide empirical evidence of your proposed solution's success/impact at present. If your project is in the idea phase, please provide evidence that speaks to its potential impact
Srishti Loan
No. of States: 11
No. of Divisions: 32
No. of Regions: 164
No. of Branches: 859
No. of Districts covered: 50
No. of Credit Officers: 559
No. of Members: 59,576
No. Of Borrowers: 57,596
Cumulative loan disbursement in Crore: 344.26
Loan Outstanding in Crore: 140.26
On Time Repayment Rate: 99.81%
The above statistics prove the success of the Srishti loan.
How many firms do you expect to reach?
As per the above data, presently the Srishti loan is operational in 11 states of India. Bandhan is eyeing at a pan-India presence.
What is the volume of private SME finance you aim to catalyze?
30 different banks and Financial Institutions offer loans to Bandhan. It has the rare credential of having Small Industries Development Bank of India (SIDBI) as its equity partner. In the recent past SIDBI has acquired equity ownership in the company and has since then committed to long term support in this sector. The cumulative loan disbursement till July is Rs. 344.26 crores.
What time frame will be required to reach these targets?
Before the start of every financial year, Bandhan is in the practice of conducting a Strategic Business Planning (SBP) exercise. Not just the senior management, but also the board representatives are a part of the SBP. The year wise strategic planning is done. Needless to say that annual budgeting is an integral part of the same which is done based on trend analysis and future assumptions. The present number of clients in the Micro Enterprise loan segment is 57,596. By Financial Year 2015 it aims to cater to 934,265 clients. Going by our present record, this is highly achievable.
Does your solution seek to have an impact on public policy?
Sim
What would prevent your solution from being a success?
a) A regressive change of existing laws
b) Political pressures
c) Communal discord
d) Unavailability of human capital
e) Lack of community support
f) High rates of interest charged by the banks while disseminating loans to the microfinance institutions
Temas relacionados à inscrição
Describe the social impact of your innovation. Please include both numbers and stories as evidence of this impact
Srishti Case Study
Gouri got married at a very tender age. Like any other girl of her age she had a lot of dreams in her life. She wanted to study and make a decent living out of it. But her social upbringing and ambience deterred her from fulfilling her dreams. She was married to Ashok Sarkar the moment she turned 18. It seemed that all her wishes and desires to do something in her life had gone down the drain. After marriage she joined her husband in the hosiery business (family enterprise). Times were tough, the machine was in a dilapidated condition and the couple was the only manpower. Income earned approximately Rs 3,000 was not sufficient to fulfill their needs. There were certain other needs like primary health care, sanitation, better housing facilities which were put on the backburner. Her daughter was growing up and Gouri did not want history to repeat. Education was a priority for her and she wanted her child to at least complete secondary situation.
One day she came to know about Bandhan from her relative. Without any delay, she approached Bandhan for a loan of INR 5,000. She invested the entire loan in buying a second-hand machine for her hosiery enterprise. With a better machine production and sales automatically increased, leading to a higher income generation. Once the first loan was repaid she took four consecutive Suchana loans. Lastly, she took a Srishti loan of Rs 30,000 and bought a new sophisticated machine. Scale of production has increased manifold and is now supported by three hired laborers. Each laborer earns Rs. 60 to Rs. 80 per day. Her monthly income stands at Rs. 15,000. She has built some assets over the years. She has invested in a LIC account for her daughter.
SUSTENTABILIDADE
List all the funding sources that are required for the sustainability of this solution
The company’s key source of funding is a mix of debt and equity. Bandhan takes short term and long term loans from banks and other FIs, which are used for on-lending purpose. On equity front, Bandhan has raised Rs.50 crore equity through a like-minded investor, Small Industries Development Bank of India (SIDBI). This is the biggest investment by any government-owned institution in the microfinance sector. In spite of better valuation offers from Private equity investors, Bandhan chose to strike the deal with SIDBI because of their alignment with social objective of inclusive growth. Furthermore, sources viz. CP and NCD etc. are being explored to take care of future funding. Over the years, Bandhan has explored other funding options like buy-out arrangements for diversification of funding sources.
Demonstrate how your proposed solution has the capacity to graduate from dependence on public finance. What is the time frame?
The Non-Banking Financial Company (NBFC) entity of Bandhan prevents it from collecting deposits/savings from the clients. Hence, we are wholly dependent on Banks and Financial Institutions for funding. If a change in the financial policy allows us to collect deposits/savings then over a period of time, Bandhan can become self-reliant in terms of finance and can also reduce its interest rate by a remarkable degree.
Demonstrate how your proposed solution will survive a potential loss of its largest private funding source
The primary funding source of Bandhan being SIDBI, we do not have a single dominant private funding source. So a loss of any particular private funding source from the cluster of commercial banks shall not have long lasting impact. However, if any particular private funding refrains from providing loans, concerted action would be taken with the support of the existing sources. This would prevent the chances of a potential crisis.
Please tell us what kind of partnerships, if any, could be critical to the greater success and sustainability of your innovation
N.A.
Are there non-financial issues that could threaten the sustainability of your proposed solution?
As far as the expansion plan is concerned, Bandhan is looking at covering the uncovered parts of the country, basically to have pan India presence. Of course, like always, we would be assessing the needs of the poor at regular intervals and designing / modifying our products and services accordingly. The objective is to deliver innovative and need based services to the downtrodden section of the society. The Srishti loan is available in branches which have completed 1 year. In this way in no time the 1,550 branches will offer this loan. Bandhan believes to keep its products and services such that it is sustainable and replicable in other geographies as well. We may also go international some years down the line.
Please tell us if your proposed solution aims to scale up through a high growth sector, expand immediately to multiple sectors, and/or scale up geographically
Bandhan does not really work in direct partnership with either the government or any company. But whenever we commence work in any new area, we first of all, introduce ourselves to the local government leaders, community party etc. Their support and co-operation is essential for the smooth running of our activities.
| Anexo | Tamanho |
|---|---|
| GHOSH_07_08.JPG | 467.64 KB |
