Esaf Small Finance Bank eyes Rs 5,000 crore business in first year
MUMBAI: Kerala-based Esaf Small Finance Bank, which was launched recently, hopes to double its balance sheet to Rs 5,000 crore by the end of fiscal 2018.
The company, as a microlender has a balancesheet of Rs 2,500 crore when it got converted itself into a small finance bank which began operations on March 20, thereby becoming the first private sector lender in Kerala after the Independence.
"We hope to double our business to Rs 5,000 crore by the end of next financial year. We did a business of Rs 2,500 crore by mid-March. By 2020, we hope our balancesheet can grow to Rs 10,000 crore," K Paul Thomas, founder and chief executive of the Thrissur-based Esaf Small Finance Bank told PTI over phone today.
As an MFI, the company is present in 11 states, which includes all the Southern states, barring Andhra Pradesh and Telengana; Madhya Pradesh, Maharashtra, Chhattishgrah, Jharkhand, Bihar and Bengal among others.
The bank began operations with 15 branches in Kerala, Thomas said, adding in Maharashtra the company will be focusing on the Vidharbha region. The first Mumbai branch will be opened in Andheri shortly, he said, adding in the first year of operations it plans to have 85 branches nation-wide.
When asked about the deposit pricing, Thomas said it varies from 5.75 to 9 per cent, with the term deposits attracting higher pricing.
"We are targeting Rs 500 crore in retail deposits in the first year. We are offering a savings rate of 6-7 per cent with up to Rs 1 lakh getting 6 per cent and above Rs 1 lakh getting 7 per cent. Senior citizens will get 50 bps more," he said, adding the bank already has 11.5 lakh customers.
Esaf, as an NGO and stands for Evangelical Social Action Forum, and owns 64 per cent in MFI which owns the bank.
The bank currently has Rs 350 crore in tier 1 capital and plans to raise Rs 200 crore in tier 2 capital some time this year and is already in talks with investors, Thomas said.
While Esaf MFI, which also functions as multi-state cooperative agri society, owns 64 per cent in the bank. Thomas own 5 per cent personally in the venture. Sidbi Venture owns 12 per cent, an Australian fund owns 19 per cent.
Thomas also said he is planning to divest stake in the bank by the end of fiscal 2018 and an IPO by 2020.
Esaf Small Finance Bank is among the first five out of the 10 licencees which got permission from RBI in August 2015.
Its urban plan includes entering Bengaluru, Kolkata, Mumbai, New Delhi and Hyderabad in the first year. Esaf MFI has 285 branches in 93 districts spread over 11 states all of which be converted into bank branches.
The company, as a microlender has a balancesheet of Rs 2,500 crore when it got converted itself into a small finance bank which began operations on March 20, thereby becoming the first private sector lender in Kerala after the Independence.
"We hope to double our business to Rs 5,000 crore by the end of next financial year. We did a business of Rs 2,500 crore by mid-March. By 2020, we hope our balancesheet can grow to Rs 10,000 crore," K Paul Thomas, founder and chief executive of the Thrissur-based Esaf Small Finance Bank told PTI over phone today.
As an MFI, the company is present in 11 states, which includes all the Southern states, barring Andhra Pradesh and Telengana; Madhya Pradesh, Maharashtra, Chhattishgrah, Jharkhand, Bihar and Bengal among others.
The bank began operations with 15 branches in Kerala, Thomas said, adding in Maharashtra the company will be focusing on the Vidharbha region. The first Mumbai branch will be opened in Andheri shortly, he said, adding in the first year of operations it plans to have 85 branches nation-wide.
When asked about the deposit pricing, Thomas said it varies from 5.75 to 9 per cent, with the term deposits attracting higher pricing.
"We are targeting Rs 500 crore in retail deposits in the first year. We are offering a savings rate of 6-7 per cent with up to Rs 1 lakh getting 6 per cent and above Rs 1 lakh getting 7 per cent. Senior citizens will get 50 bps more," he said, adding the bank already has 11.5 lakh customers.
Esaf, as an NGO and stands for Evangelical Social Action Forum, and owns 64 per cent in MFI which owns the bank.
The bank currently has Rs 350 crore in tier 1 capital and plans to raise Rs 200 crore in tier 2 capital some time this year and is already in talks with investors, Thomas said.
While Esaf MFI, which also functions as multi-state cooperative agri society, owns 64 per cent in the bank. Thomas own 5 per cent personally in the venture. Sidbi Venture owns 12 per cent, an Australian fund owns 19 per cent.
Thomas also said he is planning to divest stake in the bank by the end of fiscal 2018 and an IPO by 2020.
Esaf Small Finance Bank is among the first five out of the 10 licencees which got permission from RBI in August 2015.
Its urban plan includes entering Bengaluru, Kolkata, Mumbai, New Delhi and Hyderabad in the first year. Esaf MFI has 285 branches in 93 districts spread over 11 states all of which be converted into bank branches.
