The Aga Khan Fund for Economic Development-promoted Development Credit Bank (DCB) is all set to go rural after achieving the priority sector lending target in 2007-08.
The Mumbai-based small private bank has been falling short of the requirement of having to lend 40 per cent of their total advances to priority sectors which include agriculture and home loans.
DCB is also seeking help from its promoter Akfed, which is active in microfinance space worldwide. The Aga Khan Association for Microfinance (AKAM) is the nodal agency though which Akfed routes its microfinance activities. AKAM will provide the bank a technology platform to set up the microfinance business.
“We see huge potential in the microfinance business. There is an opportunity to attract both savings and market insurance products in the rural centres which we can do through the microfinance institutions,” said Kartik Mehta, head, microfinance business, DCB. AKFED led organisations like the Aga Khan Development Network (AKDN) and Aga Khan Rural Support Program (AKRSP) is involved in microfinance activity in the western region of Maharashtra. The bank is looking forward to cash in on these organisations expertise to enter the MFI business.
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