IDFC buys Grama Vidiyal, to scale up
MUMBAI: IDFC Bank, the country’s youngest lender, on Tuesday said it will buy out Tamil Nadu-based microfinance institution (MFI) Grama Vidiyal for an undisclosed amount in an allcash deal, in a move that would extend the reach of the bank and also give it access to Grama’s 1.2 million customers.
The bank has received approval from RBI for the transaction, which is also the first acquisition of a MFI by a bank.
Grama Vidiyal has an asset base of ₹1,500 crore, and 3,000 staff across 319 branches in Tamil Nadu, Maharashtra, Madhya Pradesh, Kerala, Karnataka and Pondicherry, said Rajiv Lall, MD and CEO of IDFC Bank.
Microfinance companies have shown rapid growth in business and customer base in recent years. “As a nascent bank, our biggest challenge is customer acquisition. On October 5 when we started, we had 300 customers…We have grown about 60,000 customers on our own. Now 1.2 million is added, and we plan to have 1.5 million customers by March 2017,” Lall told HT.
IDFC Bank plans to grow its loanbook to 25% by March 2017 from the current 5%. “With this buy, our retail book will grow to ₹4,500 crore...We plan to reach ₹14,000 crore by March 2017.”
IDFC Bank started banking operations on October 1, 2015. It was one of the two entities to receive a licence from RBI in 2014 along with Bandhan Bank.
As of March 31, 2016, IDFC Bank’s advances stood at ₹45,699 crore, compared to ₹43,440 crore as of December 31, 2015.