In an effort to grow from its four existing branches to twelve by the end of the year, Housing Development Finance Corporation (HDFC) plans to open eight more microfinance branches across the nation. The branches would be designed around the self-help group linkage model.
This effort is one in a larger trend by major financial institutions to enter into the MFI space. Micrcapital.org, the source for this article, explains as such:
HDFC’s recent market entry and rapid scaling-up of operations reflects a general recognition by prominent Indian banks that microfinance is a financially sustainable if not lucrative enterprise. Other recent market entrants include banking giants UTI and ICICI, holding total assets of USD 1.2 billion and RUP 3.9 trillion (USD 92.7 billion) respectively. Further details on this movement can be found in the MicroCapital story Commercial Banks in India Delve into Microfinance Investments.
We have also written numerous times on the evolution of microfinance and involvment of traditional players. You can read Prerna’s wonderful post on MFI and Private equity here.