The leading personal loan lender in the country, Axis Bank has tied up with microfinance institution (MFI) Janalakshmi Social Services to help in offering financial services to the urban poor.
The MFI will function as business correspondent for Axis Bank as well as using its customer base to offer financial services of Axis Bank.
Shikha Sharma, Axis Bank MD and CEO said, “It solves two purposes for us. Firstly, it is part of the bank’s financial inclusion plan that will come through this effort. Secondly, unbanked population in urban areas is a big and faster growing segment, which the bank intends to tap”.
She said that this new initiative will begin from Bangalore and expand its reach to 50 other cities in the forthcoming future. The bank would be providing services such as No frill accounts to the urban poor.
Ramesh Ramanathan, promoter and chairman, Janalakshmi Social Services said, “The migrant and informal sector population in urban cities undertakes viable economic activity and creates productive assets, yet, they can’t access formal sources of credit or take care of their savings through formal channels. We are happy to be a part of this urban financial inclusion initiative by Axis Bank to reach out to the huge unbanked and underbanked population in urban India starting with Bangalore”.
Sharma added, “We don’t hope to make operating profit from this segment for next two years but are likely to reach sustainable level in the third year of operation”.
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