Micro finance services of Bandhan Bank.

1. BANDHAN BANK
MICROFINANCE SERVICE
Prepared by: Heer Shah

2. BANDHAN OVERVIEW
• Bandhan was formed in 2001 under the leadership of Chandra Shekhar Ghosh.
• Headquarters is located in Kolkata, West Bengal, India.
• The main thrust of Bandhan is social uplifment and economic emancipation of women who are socially disadvantaged
and economically exploited.
• It has been engaged in the delivery of microfinance service for the last 16 years.
• In 2014, Bandhan received the in-principle approval of the Reserve Bank of India (RBI) for setting up a universal bank.
Bandhan bank beside primary function gives the following services to its customers:
Liability products Asset products
 Savings accounts  MSME Loan products
 Term deposit accounts  Agriculture loan products
 Current accounts  Retail loan products-home loan, loan
against property, two wheeler loan,
and loan/overdraft against term
deposit.

3. History of Bandhan to Bandhan Bank
• The chairman and managing director of Bandhan “Chandra Shekhar Ghosh” was born and raised with limited resources in
Bangladesh; son of sweet seller.
• He involved himself with several NGOs working with the poor and developed interest in microfinance.
• Once, Ghosh witnessed small vendors in a Kolkata market paying interest of Rs.5 for borrowing Rs.500 from moneylenders for
12 hours. Why should they pay an interest rate of over 700% a year, he thought; this led him to the idea of starting a
microfinance business.
• However, it wasn’t easy to raise funds. When banks refused to risk advancing funds, he invested Rs.2 lakh of his own savings
and borrowed another Rs.1.65 lakh from his brother-in-law to start his microfinance set-up.
• It took 18 months to convenience the banks to give loans. Slowly banks started giving loans one after another and Ghosh was
eligible to help more poor people by giving loans and chain was known as Bandhan.
• In 2009, Bandhan was registered as a non-banking finance company (NBFC).

4. Conti……
• He applied for Bank license because “A single bank can lend only so much to a microfinance institution, but if we become a
bank then my funding is unlimited. Small is beautiful but big is necessary,” says Ghosh
• Finally, in 2014 it gets license from RBI to start a bank.
• The self made man with a grand mission, he has proved that
anything is possible with commitment and hard work.
• Bandhan is one of the largest microfinance organization
in the world.
• He is an influencer leader to microfinance sector.

5. Introduction of primary service (micro-finance) of Bandhan bank:
“Microfinance is an economic development approach that involves providing financial services through institutions to
low income clients”.
How microfinance service is provided to customers?
• Loan provided after verifying details of customers.
• Employees understands the customer’s situation.
• Maintains good relationship with customer.
• Loan is given only after the valid reason to use or invest money in a business.
• E.g buying autorikshaw and earning money
• Specific period of time is given for repayment of loan; which can be weekly or monthly.
• Employee of Bandhan also give facility of doorstep service for collecting loan installment to customer

6. It is different from micro-credit:
• Microfinance is a much broader concept than microcredit
• Microfinance refers to loans, savings, insurance, money transfers, and other financial products targeted at poor and low-
income people.
• Microcredit is a component of microfinance.
Need of micro-finance in India.
• India is said to be the home of one third of the world’s poor country;
• India is one of the fastest growing economies in the world,
poverty runs deep throughout country.

7. Micro Finance Models in India
• A wide range of microfinance models are working in India.
• The reason behind the existence of these models in India may be due to geographical size of the country,
• They can be categorized into six broad types:
1) Grameen model
2) SHG model
3) JLG model
4) Cooperative Model
5) ROSCA s
6) Micro-finance company (MFCS)
• Bandhan Bank is micro-finance Company, working as SHG and JLG model.

8. Self Help Group
Meaning of Self-Help Group
Self-Help Group (SHG) is a small voluntary association of poor people, specific 15 to 20 member from the
same socio-economic background. They come together for the purpose of solving their common problems
through self-help and mutual help. The SHG promotes small savings among its members kept with a bank and
then use it in form of loan which has to be repaid periodically.
• SHG members comprise only poor people
• SHG does not comprise only women members
Process of opening bank account by an SHG
o Formation of group
o Meetings of group
o Open savings account
o Follow RBI instructions for SHG

9. Joint Liability Group
• A Joint Liability Group is usually a group of 30 who come together to borrow from an MFI without any collateral.
• The members in a JLG are also from similar socio-economic backgrounds and usually the same village.
• A JLG is different from SHGs in that the members share liability, or stand guarantee for each other.
The features of JLGs
• Members should be of the same village.
• Only One member of a family can become a member of JLGs.
• Members should not be a defaulter of bank loan.
The Purpose of JLG
• Providing Credit to Farmers, Landless Labourers and Artisans
• Providing Collateral free Loan
• Building Confidence
• To provide self-employment and increase production of agricultural products.

10. Bandhan Network
• 501 branches was established on the very first day of Bandhan bank
• Today, there are total 2016 branches all over India as shown in figure;
• Bandhan bank targets more 180 new branches in 2017
VISION
• “To be a world class bank for convenient and affordable financial solutions to all, in an inclusive and sustainable
manner.”
MISSION
• To provide our customers accessible, simple, cost-effective and innovative financial solutions in a courteous and
responsible manner.

11. LITERATURE REVIEW
• Susy Cheston:
He examined that microfinance has the potential to have a powerful impact on women’s empowerment. Although microfinance is
not always empowering for all women, most women do experience some degree of empowerment as a result. Empowerment is a
complex process of change that is experienced by all individuals somewhat differently. Women need, want and profit from credit
and other financial services. Strengthening women’s financial base and economical contribution to their families and communities
play a role in empowering them. Product design and program planning should take women’s needs and assets. By building an
awareness of potential impacts of their programs. MFIs can design products, services and service delivery mechanisms that
mitigate negative impacts and enhance positive ones.
• Linda Mayoux:
Has examined that micro-finance programmes not only give women and men access to savings and credit, but reach millions of
people worldwide bringing them together regularly in organized groups. Through their contribution to women’s ability to earn an
income, micro-finance programmes can potentially initiate a series of ‘virtuous spirals’ of economic empowerment, increased
well-being for women and their families and wider social and political empowerment.

12. Loan Structure
No Loan Product Loan Amount Tenure Rate of Interest
1 Suchana(Micro Loan) 1,000 - 15,000
Subsequent increase up
to 10,000
12 months 22.40 %
2 Srishti(Micro Enterprise Loan)
16,000 - 50,000
Subsequent increase up
to 10,000. Loan does not
exceed 35,000- in the
first cycle
24 months 22.40 %
3
Samriddhi(Micro Small and
Medium Enterprise Loan) 51,000 - 5,00,000 12/18/24 months 22.40%
4 Suraksha(Micro Health Loan) 1,000 - 10,000 12 months 12.00%
5 Susikhsha (Micro Education
Loan)
1,000 - 10,000 12 months 12.00%
6 Fisheries 10,000 - 1,00,000 12/24 months 22.40%

13. RESEARCH METHODOLOGY
Area of research:
• Identifying the sources of capital which helps working smoothly
of micro-loans.
• To know total credit provided by bank to customers till date.
• To know the total bad debts
• To analysis its SWOT analysis.
• Ranking of Bandhan in microfinance
• To analyze the impact of micro-finance on poor people.
Primary source-- Secondary source--
Questionnaire ,
Observation by visiting microfinance unit &
Communication with manager.
Internet.

14. Source of fund: ( PRIMARY SOURCE )
• Via banks (before)
• savings account, fixed deposit, current account etc.(after)
• SWOT
Analysis:
Total credit provided by bank till
date.
23000cr.
Total no. of borrowers for micro-
finance.
6600,000
Total % of bad debts. 0.1%
Total % of successful recovery 99.9%
STRENGTH:
Huge networking
Customer loyalty
Weakness:
Weak management
Opportunity:
Employment opportunity
Threats:
Poor banking infrastructure
Financial crisis

15. Ranking of Bandhan Bank. ( SECONDARY SOURCE )
Top 10 MFIs disbursing loan Top 10 MFIs with client outreach.
 > As Bandhan has the highest network
> It gives loan without security
> The doorstep facility attracts all
> Aims to reach maximum number of poor
> The proportion of repayment is almost 100%
so can work smoothly on lending high loans.

16. Analysis of questionnaire by SPSS software
General Analysis
• Total number of respondent are 50 and all are working women.
• Maximum respondent comes under age group of 26-35 that is 22 in number and other 14 respondent
respectively in age group of 18-26 and 36-45.
• Education shows maximum 56% of respondent are literate, 6% are illiterate,
30% are primary educated and 6% and 2% are middle class and midway educated.
• After joining of microfinance there is 64% women having pukka house structure and 24% having semi-pukka
and 8% having kuccha house.
• Family income shows that below 12000 are 50% and in between 12000-20000 there is 40% respondent and
10% shows 20000-36000.
• Ration card holder are 96% and non are 4%

17. Cross tabulations in context with Family income and improvement in saving
FAI * IYS Cross tabulation (Family income and improvement in saving )
Count
IYS
Improvement in saving
2
Poor
3
Moderate
4
Good
5
Very good
Total
FAI
Family
income
1
below 12000
1 12 7 5 25
2
12000-20000
0 4 9 7 20
3
20000-28000
0 1 4 0 5
Total
1 17 20 12 50

18. FAI * RDML Cross tabulation (Family income with reduction in dependency level)
FAI * RDML Cross tabulation
Count
RDML
Reduction in dependency
2
Poor
3
Moderate
4
Good
5
Very good
Total
FAI
Family
income
1
12000
5 12 6 2 25
2
12000-20000
2 14 4 0 20
3
20000-28000
1 2 1 1 5
Total
8 28 11 3 50

19. PSASHG * LOPDMFH Cross tabulation (Social activity and decision making in house hold
PSASHG * LOPDMFH Cross tabulation
Count
LOPDMFH
Level of participation in decision making in house hold
2
POOR
3
MODERATE
4
GOOD
5
VERY
GOOD
Total
PSASHG
Social
activity
participation
1
Yes 0 5 12 13 30
2
No 1 8 8 3 20
Total 1 13 20 16 50

20. PSASHG * MHWTPA Cross tabulation (Social activity and microfinance help women to protest against
unethical things)
PSASHG * MHWTPA Cross tabulation
Count
MHWTPA
Microfinance help women to protest against unethical things
2
Poor
3
Moderate
4
Good
5
Very good Total
PSASHG
Social activity
Participation.
1
Yes
0 5 7 18 30
2
No
2 9 4 5 20
Total 2 14 11 23 50

21. Descriptive Analysis
Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
IYS:
Improvement in saving
50 2 5 3.86 .808
RDML:
Reduction in dependency
50 2 5 3.18 .774
LRPF:
Level of reduction of poverty in
family
50 1 5 3.30 .995
LOPDMFH:
Level of participation in decision
making in the house hold
50 2 5 4.02 .820
LOMI: moving
independently
50 2 5 3.90 1.055
MHWTPA:
Microfinance helps women to
protest
50 2 5 4.10 .953
ADFB: Able to discuss
freely
50 2 5 3.98 1.020

22. Reduction in dependency level. Participation in Decision making in household
0
0.2
0.4
0.6
0.8
1
1.2
Std. Deviation
IYS
RDML
LRPF
LOPDMFH
LOMI
MHWTPA
ADFB
IYS
15%
RDML
12%
LRPF
12%
LOPDMFH
15%
LOMI
15%
MHWTPA
16%
ADFB
15%
Mean
IYS RDML LRPF LOPDMFH LOMI MHWTPA ADFB

23. Findings & conclusion
• My research work has shown that development of working women by microfinance is effective for rural women
development.
• It shows that economic level as well as social level are improved.
• By using or being a part of microfinance this women improved her living standard, while some improved family
poverty.
• By microfinance improved her family income and reduce dependency level that this result shows.
• All factors has shown positive path for rural women that is saving improvement and dependency level improvement
and extrovert personality creation also they are self-confident for fight against unethical things in society.
• Thus I can conclude that Bandhan effectively works on what its aims i.e. Alleviating poverty by empowering
women.

24. BIBLOGRAPHY
• BOOK: Tamal Bandyopadhyay Book
• Chandra Shekhar Ghosh speech – YouTube
Website
www.selphelpgroup.com
• http://megselfhelp.gov.in/faqs.htm
www.Bandhanwikipedia.com
• https://en.wikipedia.org/wiki/Bandhan_Bank
www.Bandhanloan.com
• http://www.bandhanmf.com/loan.aspx