India: HDFC to Spread Its Network to Capture Indian Rural Market

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Aug 2008
Chennai, India, August, 26 2008 - With the aim of enabling farmers and Self Help Groups (SHGs) have access to banking and finance products, India's third largest bank HDFC has chalked out new measures to expand its network to rural areas of the country.

New branches in rural areas would be equivalent with the core banking facilities that HDFC provides to customers in metropolitan cities, according to a top official of the bank.

"During the next fiscal, we plan to open more than 200 branches across the country. Of this, we will open more than 100 branches in rural areas," HDFC Senior Vice President G S Gopinath said.

Currently, 125 of the total of 325 branches in South India are in rural and semi-urban areas, 113 in urban areas and 87 branches in metro cities. "The main idea is to make farmers and SHG have a bank account and access to the bank,' he said.

For this purpose, HDFC planned to depute more field staff and provide office with internet and other facilities at rural branches.

"We believe that HDFC has great potential for further development due to its broad geographical service coverage, its connection with rural residents and the increasing demand for loans in rural areas,' he said.

Gopinath said HDFC was constantly conducting surveys in rural areas with the help of SHGs to assess the banking needs of the people, SHGs to understand their earning and spending patterns and devise services and products that suit them.

"Our field staff will provide knowledge to farmers on the new developments in the banking area and the right use of banking facilities for better savings,' he said.

"We also plan to expand our 'SB-Max' scheme, a new product where the customer can access in any ATM without any service charge, to the rural areas," he said.

on the initiatives to uplift SHGs in rural areas, HDFC Country Head Micro Finance K Manoharaj said that HDFC planned to disburse Rs 380 crore in the current fiscal to benefit about four lakh families in the country.

"Under the micro finance scheme, HDFC plans to disburse Rs 625 crore (6.25 bn US$), where 12.70 lakh (1'270'000) families will be benefited,' he added.

On the expansion of micro finance services in South India, he said HDFC planned to open four dedicated micro finance branches in Thiruvaru, Tanjore, Athur and Villupuram districts of Tamil Nadu and Gudoor and West Godavari districts of Andhra Pradesh.

Manoharaj said HDFC would also launch market linkage, a new scheme, which would promote and market the products of SHGs through a online portal.

He said HDFC would offer services, including consultancy, to help SHGs carry out commercial transactions and guide SHG's on procedural matters, quality packaging, building market contacts, brand creation, trademark registration and activate the web portal to promote SHG products through the web.

 

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