BASIX Group, an Indian company whose holdings include two microfinance institutions (MFIs), reportedly intends to rework its business plan to diversify away from direct microlending and generate more income from allowing commercial banks access to its 3.5 million customers. Under the new model, BASIX customers would apply for loans to commercial banks and other financial institutions with BASIX serving as an intermediary, identifying potential clients, conducting risk assessments and collecting repayments. Banks would pay BASIX both for general access to the new customer base and for their assistance in monitoring clients. BASIX expects to increase fee-based income from a current level of 15 percent to 40 percent of total income over an unspecified time period.
BASIX Group’s microfinance activities are carried out by two MFIs; Bhartiya Samruddhi Finance Limited (BSFL), a non-banking finance company (NBFC) and Krishna Bhima Samruddhi Local Area Bank Limited (KBSLAB), a rural bank. According to the Microfinance Information Exchange (MIX), BSFL reported total assets of USD 406 million, a gross loan portfolio of USD 362 million and 1.72 million active borrowers as of December 31, 2010. As of December 31, 2010, KBSLAB reported to MIX total assets of USD 26.8 million, a gross loan portfolio of USD 17.3 million, return on assets (ROA) of 1.12 percent, return on equity (ROE) of 10.4 percent and 61,467 active borrowers.
By Rohan Trivedi, Research Associate
About BASIX Group:
BASIX Group is an Indian institution that consists of companies that provide various services targeted at poor people including microfinance, health insurance and agricultural and business development services. The BASIX Group operates through a holding company, Bhartiya Samruddhi Investments and Consulting Services Limited (BASICS Ltd). BASIX Group’s microfinance activities are carried out by two MFIs; Bhartiya Samruddhi Finance Limited (BSFL), a non-banking finance company (NBFC) and Krishna Bhima Samruddhi Local Area Bank Limited (KBSLAB), a rural bank. As of September 30, 2010, BASIX reported a gross loan portfolio of USD 402 million with approximately 3 million clients and operations in 16 Indian states and 6 other countries.
About Bhartiya Samruddhi Finance Limited (BSFL):
Bhartiya Samruddhi Finance Limited (BSFL) is a regulated non-banking finance company (NBFC) based in Hyderabad, India, that was founded in 1997. It is part of the BASIX Group, which provides microfinance, agricultural and business development services to poor, rural households. According to the US-based nonprofit Microfinance Information Exchange (MIX), BSFL reported total assets of USD 406 million, a gross loan portfolio of USD 362 million and 1.72 million active borrowers as of December 31, 2010.
About Krishna Bhima Samruddhi Local Area Bank Limited (KBSLAB):
Krishna Bhima Samruddhi Local Area Bank Limited (KBSLAB) is an Indian rural bank that was founded in 1999 and provides savings and microcredit services to poor people. It is part of the BASIX Group, which provides microfinance, agricultural and business development services to poor, rural households. According to the US-based nonprofit Microfinance Information Exchange (MIX), KBSLAB reported total assets of USD 26.8 million, a gross loan portfolio of USD 17.3 million, return on assets (ROA) of 1.12 percent, return on equity (ROE) of 10.4 percent and 61,467 active borrowers as of December 31, 2010.
Sources and Additional Resources:
[1] The Economic Times: “Basix microfinance reworks business plan, to share network for Funds”, http://articles.economictimes.indiatimes.com/2011-05-26/news/29586300_1_mfi-agents-microcredit-manmath-dalai
MicroCapital.org story, April 19, 2011: “MICROCAPITAL BRIEF: Indian Banks Seek Personal Guarantees from Microfinance Institution (MFI) Executives as Condition of Debt Restructuring”, https://www.microcapital.org/microcapital-brief-indian-banks-seek-personal-guarantees-from-microfinance-institution-mfi-executives-as-condition-of-debt-restructuring/
MicroCapital.org story, March 14, 2011, “MICROCAPITAL BRIEF: For-profit Microfinance Institution (MFI) BASIX Group Negotiating $166m Loan from Consortium of Banks Led by Small Industries Development Bank of India (SIDBI), https://www.microcapital.org/microcapital-brief-for-profit-microfinance-institution-mfi-basix-group-negotiating-166m-loan-from-consortium-of-banks-led-by-small-industries-development-bank-of-india-sidbi/
MicroCapital Universe Profile: BASIX Group, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=BASIX+Group
MicroCapital Universe Profile: Bhartiya Samruddhi Finance Limited (BSFL), https://www.microcapital.org/
microfinanceuniverse/tiki-index.php?page=Bhartiya+Samruddhi+Finance+Ltd+%28BSFL%29
MicroCapital Universe Profile: Krishna Bhima Samruddhi Local Area Bank Limited (KBSLAB), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Krishna+Bhima+Samruddhi+Local+Area+Bank+Limited+%28KBSLAB%29
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/
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