Jana Small Finance Bank to launch 2-wheeler loan products next year

Bank eyes total loan book size of Rs 100 billion by end of FY19

Jana Small Finance Bank, the newly launched entity in the small finance banking space, is planning to enter into consumer durables and two-wheeler loan segments next year after starting operations with agri, individual and business loan offerings.

The company, which officially launched its operations on March 28 this year after receiving small finance banking licence in April, 2017, is also hopeful of increasing its total loan book size to around Rs 100 billion by the end of this financial year from Rs 76 billion reported in FY18.

"We will be designing products as per the demand that we see in the market place. Currently, our loan products include agri, individual and business loans. We see sound demand for affordable housing loans, which we will launch next month," said Ajay Kanwal, chief executive officer of Jana Small Finance Bank.

Currently, the bank is focusing on building up its current account, savings account (CASA) base to fund its business growth. The bank Wednesday launched fixed deposits products offering 8.5 per cent interest rate to customers and 9.1 per cent for senior citizens as introductory offer.

Jana Small Finance bank, which has turned into a bank from a micro-finance institution- Janalakshmi Financial Services - is hopeful of building up its liabilities base from its existing customers. The bank is currently enabling its existing 4.5 million customers across 19 states to access its banking services.

The Bengaluru-headquartered bank has around 157 branches as of now and plans to take it to 500 by the end of 2019. It is also planning to add around 1,000 new employees this year to bolster its current staff strength of 15,000.

The small lender also said that it is adequately capitalised to fund its loan growth apart from investment in expansion.    

"We have raised around Rs 16 billion from a clutch of investors in the recent past and another Rs 3 billion will be added to our capital base post RBI approval. So, the bank is well capitalised to fund the business growth," Kanwal said.

Investors like TPG, Morgan Stanley Asia-managed private equity fund, QRG Enterprises Ltd and HarbourVest among others have infused funds into the entity in the recent past.

The bank also remained confident of resolving the bad loan problem which stuck its previous avtar, the microfinance company, post the demonetisation.

"The new loans are showing very good repayment at more than 99%. The older loans which were given before demonetisation are recovering slowly and we are concentrating majorly on their collections," he said.

The lender also said that it would invest around Rs 800 million per annum in technology platforms to provide better digital experience to customers.

R Gandhi, the former deputy governor of RBI, who is also an independent director in the board of Jana Small Finance Bank, said the bank could see stronger growth in coming years with differentiated product offerings apart from focusing on the theme of financial inclusion.