ICICI Bank's Innovations in Rural Finance

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ICICI BANKS INNOVATIONS IN RURAL FINANCE

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ICICI BANK

• 2nd largest bank in India total assets 22
  billion
• Explicit social commitment enabling the poor
  to become active, informed participants in
  economic processes
• Universal, technology-driven bank over 1 million
  online customers
• Insistence on commercially viable model

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Two Strategies for Rural India

• Direct provider of financial services micro-loans
  via village self-help groups
• Indirect distribution channels lender to MFIs,
  sometimes an investor partner with enterprises
  building Internet kiosk networks in rural areas
• New financial products for rural India rain
  insurance, crop futures derivatives

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Self-help Groups

• Each 20 women below poverty line training,
  regular monthly savings program loans after 1
  year 250, 18 interest
• Social service consultants experienced local
  woman, form 20 new groups
• Coordinators oversee 6 consultants, 120 SHGs
• Bank project manager oversees coordinators,
  trains SHGs, reviews loan applications
• 8000 SHGs, growing rapidly

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Indirect Channels

• Partnering with 4 of largest MFIs line of credit
  to cover 3 years cash flow some equity
  investments
• Partnering with rural kiosk networks training
  the operator as credit agent placing
  inexpensive ATM at kiosks savings, loans, other
  products providing loans for crop inputs via
  suppliers
• N-Logue, ITC e-choupal, EID Parry, BASIX

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Development Benefits

• SHGs build self-confidence, group solidarity,
  governance skills, regular savings
• Some SHGs active in village politics
• Positive impact on income, communication skills,
  participation in household decision-makingdecline
  in social problems
• Access to credit at affordable rates, growing
  trust in formal system