India: IDFC Bank Acquires Grama Microfinance

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Jul 2016
India, July, 13 2016 - Grama Vidiyal’s has assets under management (AUM) of Rs 1,502 crore of micro finance assets as on March 31, 2016. All loan assets on the book will be transferred to IDFC Bank.

Private sector lender IDFC Bank has acquired 100 per cent stake in Tamil Nadu-based Grama Vidiyal Microfinance, a leading microfinance institution (MFI) in the country, for an undisclosed sum.

After acquisition, Grama Vidiyal will be a wholly-owned subsidiary of IDFC Bank. Grama Vidiyal will act as a dedicated Business Correspondent of IDFC Bank, and will help deepen reach and widen the delivery mechanism for banking services. “The move enables IDFC Bank to significantly enhance its network and reach and make basic banking services available to a large customer base,” IDFC Bank said.

The acquisition will give IDFC Bank immediate access to 1.2 million rural and semi-urban households and Grama Vidiyal’s network of 319 locations across 65 districts of Tamil Nadu, Kerala, Karnataka, Pondicherry, Maharashtra, Gujarat and Madhya Pradesh. Current customer households of Grama Vidiyal, in turn, will benefit from IDFC Bank’s full range of liability products, customised credit offerings, innovative digital services and doorstep banking, it said.
IDFC Bank stock climbed 8.42 per cent to settle at Rs 52.15 on the BSE. During the day, it had jumped 12 per cent to Rs 53.90 at one stage.

Grama Vidiyal’s has assets under management (AUM) of Rs 1,502 crore of micro finance assets as on March 31, 2016. All loan assets on the book will be transferred to IDFC Bank.

“The 30-year-old, Trichy-headquartered Grama Vidiyal is known for its double-bottom-line approach, focusing on the sustainability of financial inclusion programmes and the development of women and their families,” IDFC said. Its employee base of over 3000, with an understanding of the needs of local communities, will represent IDFC Bank, in their branch locations.

“The acquisition of a micro-finance institution by a bank is an industry first,” said Rajiv Lall, Founder MD & CEO of IDFC Bank. “IDFC Bank intends to be a mass retail bank with a significant footprint and customer base, in five years. Its retail offering is all about delivering a unique banking experience using technology and new processes. The acquisition of Grama Vidiyal not only fast-tracks the build out of a retail network, but with technology intervention, enables the bank to deliver new age banking solutions at scale, thereby financially enriching the lives of people in both, rural and urban geographies.”

“Grama Vidiyal is a perfect fit, as its business values and service philosophy aligned with that of IDFC Bank. The bank plans to build a public banking infrastructure that benefits the under-served segments. IDFC Bank and Grama Vidiyal will work together to build sustainable communities, make small households self-reliant, financially empower women and encourage local entrepreneurship,” Lall said. S Devaraj, Chairman & MD of Grama Vidiyal, said, “our customers will now also have access to a wider range of banking products through our network and outreach provided by our frontline field force.” Members of Grama Vidiyal will use the bank’s inter-operable micro ATM, which functions like a “Bank-in-a-Box”, allowing customers and non-customers to transact from the comfort of their homes and neighbourhoods.



 

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