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For the biggest microfinance institution in the country, 60% of the nearly 13000 odd field staffs are class 12 passouts, while the rest are simple graduates. However, that comes as the biggest strength for Bandhan, a low-profile microfinance provider till a few years back.
Close to 12,961 of Bandhan's staff have been instrumental for tapping close to six million borrowers, which is about 20% of the total number of MFI borrowers in the country. Logically, even with each borrower depositing Rs 1000 at Bandhan, the institution will have an instant deposit base of Rs 600 crore on a lower band.
"About 60% of our field staffs are class 12 passouts and 40% are graduates. Bandhan would induct all its field staffs as regular employee of the bank," said Chandra Shekhar Ghosh, Chairman, Bandhan.
The MFI operations of Bandhan would be integrated with the MFI operations, and might work on a unique integrated model of doorstep banking, added Ghosh.
Quite reasonably, within a day of getting an in-principal nod for a banking licence, institutions are already looking to leverage the huge borrower base of Bandhan. Notably, WBIDFC, which is now struggling to market the recently-launched Safe Savings Scheme, launched by the West Bengal government in the aftermath of the Saradha scam, is already eyeing a tie-up with Bandhan.
"Bandhan has done wonderful work in rural areas and their biggest strength is penetration. It would be a good idea to collaborate with them, but it is just a thought as of now. Even if there is no formal tie-up, there is so much to learn from the way Bandhan functions," said Abhirup Sarkar, chairman, West Bengal Infrastructure Development Finance Corporation (WBIDFC).
The training which Bandhan's field staffs undergo not only include refresher courses and skill development, the employees are also expected to keep a close tab on the borrower's life.
Notably, Bandhan's offices also double-up as residences for their staff, which, helps in close monitoring and supervision of what's happening in a borrower's life, according to Ghosh, in the recent issue of his write-up in the Indian Management magazine, published by Business Standard.
Ironically, about few years back, recruiting and retaining staff was the biggest nightmare for Bandhan, said Ghosh.
"Nobody was willing to join the organization during those days. The strategy of recruitment was changed to word of mouth. Job application forms were distributed in the villages; even village youth were provided white papers to submit their biodata. Today, things have changed and we are flooded with biodatas," writes Ghosh.
Thus, low branch expenses, decentralised business model and the head office staff accounting for less than 1% of the total employee base, are strengths that have added to the profitability of Bandhan.
Quite reasonably, Bandhan would be able to reduce its lending cost by 6-7%, which now stands at close to 22%.
However, collecting a huge corpus of microsavings would not be a smooth ride for Bandhan, and the biggest risk would come from a large pool of unsecured loan of the MFIs.
"What would differentiate Bandhan from other banks would be its large pool of unsecured loans. I think, RBI would come out with some regulations on the cap on lending from unsecured lending pool," said Kuldip Maity, Managing Director & CEO, Village Financial Services, a West Bengal based MFI.
