Microfinance in India: The Case of ICICI Bank
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Code :BSM0060A
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Region : India
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Introduction:ICICI Bank, one of the largest private sector banks in India, ventured into microfinance in 2001, but within a short span of time achieved remarkable progress. The microfinance portfolio of the bank grew from $16 million to $63 million (the average loan is $223) from 2001 to 2003. Adopting a partnership model, it extended credit facilities directly to rural masses. But, information irregularity, inability of poor people to offer collaterals and lack of details of credit history were major challenges it faced. Apart from providing credit to the needy rural population, it planned to develop various financial products like weather insurance, health insurance, remittance services and commodity derivatives. Despite these developments, the question remained whether ICICI Bank would be able to sustain its success through partnership model in the Indian Microfinance sector as more and more entities began to jostle for the share in the burgeoning sector? |
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