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MR RANA KAPOOR, MD & CEO, YES Bank, and Ms Maria Otero, President & CEO, Accion International, at a press conference in Mumbai on Wednesday. - Paul Noronha

Mumbai , Dec 6

YES Bank, which launched its microfinance division YES Microfinance India today, has signed an MoU for technical collaboration with Boston-based Accion International, a microfinance institution.

Accion will provide the bank with capacity-building support, technical initiatives and new product development.

YES Bank has set apart Rs 10 crore for the next two years for the microfinance division.

The division will offer credit, savings, insurance and remittances in phases to the urban and rural poor.

The pilot programme will start in Mumbai's slums by March-April 2007. The bank plans to reach three lakh households in five years to foster financial inclusion.

The bank plans to spin off the microfinance division into a separate entity within two years.

"YES Bank will have a majority stake and will invite other partners for equity and debt," said Mr Rana Kapoor, Managing Director and CEO. "The microfinance business plans to break even in the third year."

Ms Maria Otero, President and CEO of Accion International, said: "This partnership marks Accion's entry into India. For the poor, access to sustainable capital is important."

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