Country's biggest private lender, HDFC Bank’s Navelim Branch in South Goa was adjudged the Best Performing Branch in microfinance in the state, by the National Bank for Agriculture and Rural Development (NABARD).
Under microfinance, financial institutions try banking with people with low income and little documentation to prove their credit-worthiness.
HDFC Bank has dealt with this challenge by targeting women self-help-groups (SHGs) under its sustainable livelihood initiative (SLI). Considering the lending to a SHG, the liability of repayment is collective instead of individual, thus narrowing the chances of NPAs by a considerable margin.
Jorge D’Costa, circle head, HDFC Bank, said, “Our experience is when we lend to SHGs, the repayment rate is 98-100%. So, our loan-book remains very healthy.
HDFC Bank has covered 15,000 households in Goa under microfinance as of now in 69 villages. Nationally, HDFC Bank’s vision is to cover 10 million households, thus impacting 50 million people which is approximately 4% of India’s population.
When asked what types of businesses, HDFC Bank is lending to under microfinance, D’Costa, said, “We have given finance to a groups engaged in making toys, making pickles, jewelry and etc,” D’Costa said, “We not only give loans to SHGs, but we also impart them business training; for instance, how to sell their products, how to find markets."
