Esaf Microfinance, the only aspirant from Kerala to be granted in-principle clearance to become a small finance bank, hopes to ‘meet financial requirements of the poor by advancing loans of higher value.’
This task will be delivered in as efficient a manner as possible. In fact, this has been a long-pending demand of customers, says K Paul Thomas, managing director, Esaf Microfinance.
‘LONG WAY AHEAD’
Esaf is one among the 10 players chosen by the RBI from among 72 applicants. Headquartered at Thrissur, it has its regional office located at Chennai.
Currently, its footprint runs across nine states covering 74 districts and reaches out to more than eight lakh members through its 224 branches.
Major social investors in the company include Dia Vikas Capital, a subsidiary of Opportunity International, Australia, and Manaveeya Holdings, a subsidiary of Oiko Credit Netherlands.
“We still have a long way to go. But I’m confident Esaf will rise as a team to meet the future challenges,” Thomas told BusinessLine.
SAVINGS VEHICLE
The Thrissur-based Esaf has an employee strength of 2,500 and has plans ready to ramp up capacity-building exercise down the line through intensive training.
“For us, this is an extension from being an RBI-registered NBFC-MFI to being a bank. We take this as our first step towards becoming a reputed banking institution.”
While thanking the RBI for recognising it, Thomas said that as bank, Esaf will seek to set up a savings vehicle for the un-served and the underserved sections of the society.
As instructed, it will train primary focus on supply of credit to small business units, small farmers, micro and small industries, and other entities in the unorganised sector.
HIGH-TECH, LOW-COST
High technology and low-cost operations will be leveraged to meet the requirements of these sectors. Esaf is also ready to take up other simple activities in financial services with prior RBI approval.
But the company cannot set up subsidiaries to undertake non-banking financial services activities, Thomas said.
The licensing of small finance banks follows the payment bank licenses to 11 entities to provide basic savings instruments to customers and deposit, payment and remittance services to people without access to formal banking system.
Both initiatives are aimed at furthering financial inclusion, which the NDA Government at the Centre has made one of its top priorities since assuming office in 2014.