HDFC Bank aims to grow share of rural business to 50 per cent in 5 years - NDTV

Chomu, Rajasthan: Private sector lender HDFC Bank is aiming to grow the share of its business from the rural segment to about 50 per cent in about five years, its managing director Aditya Puri has said.

"Today 56 per cent of our distribution outlets are in semi urban and rural areas. But only 15 per cent of our income comes from semi urban and rural areas. But in five years, the distribution from this income, I mean that income (from these areas) will go from 15 per cent to 50 per cent," Mr Puri said on the sidelines of the bank's sustainable livelihood initiative (SLI) in Chomu, Rajasthan on Friday.

This programme engages women by aiming to make them financially independent.

Under the SLI programme the bank provides occupational training, financial literacy, credit counselling, livelihood finance and market linkages to women in the rural areas that are mainly unbanked or underbanked.

"We are committed to making one cr ore women economically independent...In a country that has 27 crore people living below poverty line, 22 crore of them are living in rural India, which is where we are largely focussing," Mr Puri said.

The SLI has HDFC Bank's board-mandated objective of 1 crore families (5 crore Indians) in unbanked and underbanked locations and thus bringing them into the banking system. The SLI outreach of the bank is about 7,000 villages across 24 states in the country.

The bank is targeting to generate a business of about Rs 800 crore from this initiative in about three to five years as India has a huge unbanked population, said Mahohara Raj, executive vice president and business head of the initiative.

"About 16 crore families are at the bottom of the pyramid and it has about Rs 8 lakh crore loan business opportunity...I target one crore people. Now I am looking at the individual loans. So it's a Rs 800 crore target from this in over a period of three years," Mr Raj sa id.

Under the SLI programme, which was started about three years ago, the bank has so far disbursed loans to the tune of Rs 2,500 crore.

Puri said the SLI programme is a viable business proposition for the bank in the long run and it will expand the loan amount depending upon the capacity of the people taking such loans.

Currently, the bank is providing loans in the range of Rs 12,000-15,000 per year with an interest rate of 20-25 per cent to the women under the SLI.

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