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August 4, 2022

India’s Yes Bank open to deals in microfinance segment

Indian private sector lender Yes Bank could buy entities in the microfinance segment to pursue inorganic growth, Moneycontrol reported citing Yes Bank CEO and MD Prashant Kumar.

The news comes after the bank announced last week that it is raising $1.1bn from Carlyle and Advent International.

“Wherever there is an opportunity for inorganic growth, whether it is the purchase of a pool of assets or some entities in microfinance or other industries, we would like to examine and if it is a good opportunity, we would like to acquire,” Kumar told the publication. 

“Microfinance is something which we would like to explore because that is something which we are not doing in the bank. If you start building up those capabilities in the bank, it will take a lot of time. If you have some good platforms to invest in, which makes sense for you, you may acquire them and they will provide growth for you,” the bank’s chief noted. 

Kumar added that Yes Bank did not face any capital constraints and even with access to the new capital, the lender will refrain from providing big-ticket loans. 

On being asked if the lender has set new targets for loan growth, Kumar said the bank does not plan to do so as it may not be in line with the current times. 

“We are very careful to not compromise on the quality of the loan book. Since now there is no capital constraint, the bank has the ability to grow, but it would depend on how things change in the broader macroeconomic environment,” Kumar added.

Commenting on the fundraising, Kumar stated that following the latest $1.1bn round, the bank does not plan to raise funds for at least next three to four years.

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