ICICI Bank goes rural in growth push

ICICI Bank is focusing on rural credit for its second phase of expansion after covering the retail space in some detail. The bank has firmed up a "no white space" strategy to cover the entire country in the next three years.

The bank plans to lend Rs 10,000 crore to rural sector this fiscal. Around 25 per cent of its portfolio is expected to be from the segment by 2008.

"The 'no white space' (NWS) strategy involves covering all districts (around 600) directly or through some form of tie-up," explained K V Kamath, managing director and chief executive officer, ICICI Bank, while talking to reporters at the sideline of an interactive session organised by the Indian Chamber of Commerce in Kolkata on Thursday.

"NWS is aimed at providing rural credit by leveraging the role of micro-credit organisations, corporates which deal directly with farmers. The bank would primarily focus on vegetable production, 60 per cent of which never reaches market. Credit flow to this segment will have a direct impact on the growth of the sector," he explained.

"The bank will tie-up with nearly 40 micro-credit organisations. Next year, we would help set up 75 more such organisations, while in 2007-08 we would add another 150," Kamath added.

The bank would also initiate talks with corporates dealing with farmers such as sugar mills and companies which source their raw materials from farmers-directly or indirectly.

The bank would now identify people and provide the technology for setting up micro-credit organisations across the country, he said.