RBL Bank Limited, an Indian commercial bank formerly known as Ratnakar Bank Limited (RBL), recently bought out the other owners of Swadhaar Finserve Private Limited (SFPL), a microfinance institution (MFI) providing loan, deposit and insurance services to low-income households as well as micro-, small and medium-sized enterprises (MSMEs). For undisclosed prices, RBL bought a 36-percent stake from US-based NGO Accion and a total of 4 percent from a group of unidentified individual investors. According to Harjeet Toor, the head of Retail, Inclusion and Rural Business at RBL, the bank “sees Swadhaar as a vehicle for becoming the market leader in the space of inclusive finance, especially catering to the underserved households and small businesses. In the future, [RBL] will also be looking to leverage Swadhaar’s growing branch network to offer other relevant products to customers in semi-urban and rural markets.”
Established in 2008 in Mumbai, SFPL provides microcredit, microinsurance and deposit-taking services to individuals and MSMEs operating in low-income semi-urban and rural areas in 16 states in India. In 2014, SFPL became RBL’s exclusive business correspondent, a relationship through which RBL’s services are available via SFPL branches. As of 2018, SFPL operates 331 branches and serves 750,000 customers. It reports assets under management of INR 20 billion (USD 291 million). Additional financial information for SFPL is unavailable.
RBL was established as a private-sector bank in 1943 and is headquartered in the Indian state of Maharashtra. The bank’s products include deposit services, credit cards, property loans, housing loans, education loans, insurance products and investment services. The bank issued an initial public offering in August 2016. As of March 2017, it reported total assets of INR 487 billion (USD 7.5 billion), loans outstanding of INR 274 billion (USD 4.5 billion) and deposits of INR 346 billion (USD 5.3 billion). For the 12 months ending March 2017, it reported return on assets of 1.08 percent and return on equity of 11.7 percent. As of June 2018, it serves approximately 4.5 million customers via its 265 branches distributed across 20 Indian states and Union Territories.
The mission of Accion is to alleviate poverty by offering services such as microenterprise loans and business training. The NGO was founded in 1961 and issued its first microloan in 1973 in Brazil. Accion’s partner microfinance institutions (MFIs) provide loans entrepreneurs through 64 MFIs in 32 countries in Africa, the Americas and Asia. During 2016, the network disbursed USD 10.9 billion in loans, and it held USD 4.2 billion in savings deposits as of December of that year.
By Nicholas Galimberti, Research Associate
Sources and Additional Resources
Accion press release
http://accion.org/content/rbl-bank-acquires-100-stake-swadhaar-finserve
SFPL background
http://www.swadhaar.com/index.php/history/
RBL background
https://www.rblbank.com/about-us
RBL annual report
https://ir.rblbank.com/pdfs/financial-highlights/Annual_Report_FY_17.pdf
MicroCapital Brief; October 24, 2016; India’s RBL Bank Acquires 10% Equity Stake in Utkarsh Micro Finance
https://www.microcapital.org/microcapital-brief-indias-rbl-bank-acquires-10-equity-stake-in-utkarsh-micro-finance/
MicroCapital Brief; February 18, 2016; International Finance Corporation (IFC), ACCION Support Swadhaar in Expanding Microfinance for Women in Urban India
https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-accion-support-swadhaar-in-expanding-microfinance-for-women-in-urban-india/
MicroCapital Brief; June 19, 2018; 4Di Capital, Accion Venture Labs, Lireas Holdings Invest Equity in Insurance Technology (Insurtech) Firm Lumkani of South Africa
https://www.microcapital.org/microcapital-brief-4di-capital-accion-venture-labs-lireas-holdings-invest-equity-in-insurance-technology-insurtech-firm-lumkani-of-south-africa/
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