Case Study Series
This article describes ICICI Bank’s efforts to extend financial services to the Bottom of the Pyramid (BOP) population in India.
The Indian government has instituted policies to help the rural poor access financial services. Commercial banks are required to open a certain percentage of their branches in rural and semi-urban areas and in priority sectors like agriculture. While most banks view this as a loss-making proposition, ICICI Bank has developed models of lending that are profitable and scalable. They include:
- Direct-Access-Bank-Led model that creates and provides savings programs and microloans to Self-Help-Groups (SHGs);
- Indirect-Channels-Partnership model that combines the social mobilization strength of NGOs and MFIs working in rural areas with the bank’s strength.
ICICI Bank’s models to serve the rural poor have proved profitable. The bank continues to investigate other ways of increasing its presence in rural areas, especially through use of technology such as rural ATM machines and smart-card based payments.