State Bank of India is setting up a new vertical called Financial Inclusion and Micro Market (FIMM). This vertical will handle the bank’s microfinance operations. The bank has appointed K. V. Haridas as the deputy managing director of the FIMM vertical. The bank is at the moment laying the groundwork for the national roll-out of FIMM. State Bank of India has decided to enter the microfinance market that has largely remained unaffected by the economic slowdown.
The bank is planning to offer microloans through its thousands of branches at lower than prevailing rates in the market right now. The banks would provide loans for individuals without the need to form joint liability groups.
Bandhan Bank controls a quarter of the microfinance sector. Bandhan Bank gives loans at a rate of 17.95% while other private banks like HDFC lend at 20% or more.