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Bandhan Microfinance: Is Transformation to Bank Status Required?
內容大綱
Bandhan, the largest microfinance institution in India, has 13,000 staff members and 2,016 branches in 22 states and union territories, 5.2 million borrowers and loans outstanding of INR 57.04 billion. However, its overdependence on external sources of funds along with recent steps by the country’s banking regulator have started worrying Bandhan’s management, from a profitability and sustainability perspective. The banking licence policy declared by India’s central bank in February 2013 came as an opportunity for Bandhan to resolve the predicament it had met. The founder chairman and managing director is now trying to address the question of transforming Bandhan into a bank. Does the present business require any change? As a bank, the cost of funds for Bandhan would come down, as it would be able to raise funds by drawing deposits from clients. But is Bandhan ready to become a bank? How will it meet the various challenges in achieving business transformation?
學習目標
This case would be most suitably used for a graduate program in business management, especially in a course on financial services, management or microfinance management. Within a finance or microfinance course, this case is well suited to show an MFI’s transformation under external and internal pressure. This case is a great illustration of an organizational effort to achieve sustainability, without losing sight of a grand vision of financial inclusion, in alignment with prudent, market-oriented business principles. The objectives are:<br><ul><li>To engage students in discussing the importance of MFIs for financial inclusion of the previously excluded population and the business models for this purpose.</li><li>To enable students to examine the viability of the “non-banking financial company-MFI” (NBFC-MFI) business model and the tensions created within it due to the susceptibility of the model to the dynamic external business environment.</li><li>To enable students to analyze the possible option of easing susceptibility to the financial environment through the management decision of transforming the organization from an NBFC-MFI into a bank.</li><li>To evaluate the organizational challenges that management may face during transformation and in the future.</li></ul>