Fincare Small Finance Bank eyes over 300 branches in a year

Collects Rs 225 cr worth of fixed deposits in 4 weeks; to come up with an IPO after 3 years

With already 26 full-service branches up and running in states like Gujarat, Tamil Nadu, Karnataka and Andhra Pradesh, the new small finance bank (SFB) entrant Fincare is eyeing over 300 outlets in next one year.

Erstwhile Disha Microfin Limited, the Ahmedabad-based Fincare Small Finance Bank Limited formally announced the launch of its banking operations. However, in the last four weeks since a soft launch, Fincare SFB has already lapped up fixed deposits worth Rs 225 crore even as its advances stand at Rs 1,350 crore.

Rajeev Yadav, MD & CEO of Fincare SFB indicated that the bank's offering of fixed deposits in the range of 4-9 per cent depending on duration and savings accounts at seven per cent, is one of the best in the industry. "The public response to our deposit products is extremely encouraging. Our instant account opening process and the digital banking solutions have been a delight for our customers," said Yadav.

The bank charges interest rates in the bracket of 16-22 per cent on advances. Fincare is looking to gradually convert its over 300 microfinance offices into full-service bank branches or outlets. Apart from that, roughly 25 per cent of its branches will be converted into business correspondent (BC) outlets which will come up in unbanked areas as per RBI guidelines.

In all, the bank aspires to have 10 million customers, a deposit base of Rs 14,000 crore and assets of Rs 20,000 crore by 2022. Currently, according to founder-promoter of Disha Microfin Sameer Nanavati, Fincare SFB has a balance sheet of Rs 2000 crore which includes liabilities, investments and assets under management (AUM).

On the assets side, the bank has been engaged in providing micro loans to women groups since 2007. Besides, the bank will focus on growing the secured portfolio, comprising of Loans Against Property (LAP) and Loans Against Gold (LAG).

According to Yadav, Fincare aims to grow share of secured loans over the next few years.

"We are continuing to invest significantly on technology to ensure that credit decisions are communicated to customers instantly, and processes are simplified and paperless. These investments will help us cater to a wider base of hitherto underserved micro- and small enterprises. We will also introduce new products such as affordable housing loans, overdraft for SMEs and institutional finance over the next 2-3 years to grow our secured portfolio to 50 per cent of our total asset book," said Yadav.

Going forward, the bank is expected to have a presence across 500 outlets by the end of the current financial year. "These would be spread across ten states including Delhi, Haryana, Uttar Pradesh, Maharashtra, Madhya Pradesh and Rajasthan. With this network in place, primarily in semi-urban locations, the bank will diversify from being a rural lender to a 'rurban' bank," said Yadav.

The bank aims to be a digitally driven, rural and semi-urban bank, focused on the base of pyramid, retail mass and Micro & Small Enterprises (MSE) client segments.