The Manager's Perspective

An interesting article about a rural foray by a behemoth that is being talked about and generating good money. A rediff article : Why ICICI's rural foray thrived?
Some highlights:

How many people join a non-profit organisation after graduating from the money-showering portals of IIM-Ahmedabad? How many go on to join a bank - and then make the best of their learning experiences?

"We realised that the model wherein banks lend directly to SHGs was not viable for us, and we felt that we must work with community-based organisations who are more aware of the needs of customers."

And so ICICI Bank signed up micro-finance institutions as intermediaries for micro lending. Their key strength "is not their ability to manage capital and assume risk, but their intricate knowledge of clients and the geography in which to operate", says Mor, convinced that such a twin-tier structure is the way ahead.

ICICI Bank recently lent Rs 175 crore (Rs 1.75 billion) for a rural roads project in Madhya Pradesh, for example, and the big beneficiary is the local mandi (so the loan is serviced by the mandi cess, collected in an escrow account).

"The mandi will now tell us which road to build," says Mor, with satisfaction.

posted by Dr. Gonzo  # 12:57 AM