HDFC Bank aims to grow share of rural biz to 50% in five years

Under the Sustainable Livelihood programme, which was started about 3 years ago, the bank has so far disbursed loans to the tune of Rs 2,500 crore

Private sector lender HDFC Bank is aiming to grow the share of its business from the rural segment to about 50% in about five years, its Managing Director Aditya Puri said today.

"Today 56% of our distribution outlets are in semi urban and rural areas. But only 15% of our income comes from semi urban and rural areas. But in five years, the distribution from this income, I mean that income (from these areas) will go from 15% to 50%," Puri told PTI on the sidelines of Bank's Sustainable Livelihood (SLI) Initiative.

This programme engages women by aiming to make them financially independent.

Under the SLI programme the bank provides occupational training, financial literacy, credit counselling, livelihood finance and market linkages to women in the rural areas that are mainly unbanked or underbanked.

"We are committed to making one crore women economically independent...In a country that has 27 crore people living below poverty line, 22 crore of them are living in rural India, which is where we are largely focussing," Puri said after disbursing loan to the 20th-lakh beneficiary of the SLI programme during an event here.

SLI has HDFC Bank's board mandated objective of one crore families (five crore Indians) in unbanked and underbanked locations and thus bringing them into the banking system. The SLI outreach of the bank is about 7,000 villages across 24 states in the country.

The bank is targeting to generate a business of about Rs 800 crore from this initiative in about three to five years as India has a huge unbanked population, said Mahohara Raj, Executive Vice President and Business Head, SLI.

"About 16 crore families are at the bottom of the pyramid and it has about Rs 8 lakh crore loan business opportunity...I target one crore people. Now I am looking at the individual loans. So it's a Rs 800 crore target from this in over a period of three years," Raj said.

Under the SLI programme, which was started about three years ago, the bank has so far disbursed loans to the tune of Rs 2,500 crore.

Puri said the SLI programme is a viable business proposition for the bank in the long run and it will expand the loan amount depending upon the capacity of the people taking such loans.

Currently, the bank is providing loans in the range of Rs 12,000-15,000 per year with an interest rate of 20-25% to the women under the SLI.