Indian private sector lender IDFC Bank has snapped up 100% of microfinance firm Grama Vidiyal Micro Finance for an undisclosed sum.
Grama Vidiyal operates 319 branches across seven states and 65 districts of Tamil Nadu, Kerala, Karnataka, Puducherry, Maharashtra, Gujarat and Madhya Pradesh, and has a customer base of 1.2 million. As on 31 March 2016, the company managed INR15.02bn of micro finance assets.
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Following conclusion of the transaction, the Trichy-based microfinance lender will become a wholly-owned subsidiary of IDFC, and all its loan assets will be transferred to IDFC.
“The move enables IDFC Bank to significantly enhance its network and reach and make basic banking services available to a large customer base,” IDFC said.
IDFC Bank founder MD and CEO Rajiv Lall said: “The acquisition of a micro-finance institution by a bank is an industry first. IDFC Bank intends to be a mass retail bank with a significant footprint and customer base, in five years. Its retail offering is all about delivering a unique banking experience using technology and new processes. For a young bank, however, it takes time to build its footprint.
“The acquisition of Grama Vidiyal not only fast-tracks the build out of a retail network, but with technology intervention, enables the bank to deliver new age banking solutions at scale, thereby financially enriching the lives of people in both, rural and urban geographies.”
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