The Hindu Business Line : DCB looking at alliances, branches for micro-finance

To meet the needs of the microfinance sector, Development Credit Bank (DCB) is looking at options such as forging alliances with microfinance institutions (MFIs) and at opening exclusive branches for this purpose.

Mr Guatam Vir, Managing Director and Chief Executive Officer of DCB, told Business Line that DCB is looking at forging alliances with MFIs pan-India to enhance focus on the microfinance sector.

DCB has tied up with 14 MFIs across the country with cumulative sanction of Rs 86 crore and withdrawals of approximately Rs 48 crore.

Stating that DCB would explore opening of microfinance-focused branches in the western India corridor, he said ‘DCB Sahyog’ is its microfinance branch at Dediapada in Narmada district of Gujarat. “This initiative is being nurtured and DCB Sahyog is our first dedicated branch for microfinance,” he said.

Multi-focal approach

In the first nine months of operations, ‘DCB Sahyog’ has sourced 238 accounts and disbursed Rs 20 lakh to 85 groups under this initiative.

The microfinance business encompasses portfolio buyout, direct term loans for lending and partnership model with MFIs as business correspondents or business facilitators. “The business requires a holistic approach. While branches establish on ground presence, our multi-focal approach enables extensive outreach,” he said.

The bank has set a target of reaching 2.5 lakh microfinance customers by 2008-09 through MFIs and direct exposure to borrowers. “From the start-up phase, our goal is to comprehensively scale up and reach out to a million customers within the next two years,” he added.

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