Kotak Mahindra buys BSS Microfinance for Rs 139 crore

The acquisition will give Kotak access to BSS’s growing customer base which currently stands at over 2,17,000 and network of 78 branches (as on June 30, 2016).

By: ENS Economic Bureau | Mumbai | Published:October 1, 2016 2:08 am
Kotak Mahindra, BSS Microfinance, Kotak Mahindra growth, Kotak Mahindra expansion, microlending, business news (Source: File)

Kotak Mahindra Bank has acquired Karnataka-focused BSS Microfinance for Rs 139.2 crore in an all cash deal, enabling the private sector bank to enter the high-growth microlending segment.

The acquisition will give Kotak access to BSS’s growing customer base which currently stands at over 2,17,000 and network of 78 branches (as on June 30, 2016). BSS witnessed a 30 per cent growth in its loanbook which stood at Rs 483 crore as of March 2016 while the non-performing assets were at 0.003 per cent overdue for a day or more.

Narayan SA, president (Commercial Banking, Kotak Mahindra Bank, said, “The capabilities and processes required for this customer segment are unique, and cannot be created easily or organically in a short span. BSS is of the right size, culturally compatible with Kotak, and has proven its processes and value systems over a decade.” BSS, which lends only to women under the joint lending group model, has an average loan size of Rs 22,000 and all the loans qualify under priority sector lending guidelines, which would be of a help to the private bank.

Ramesh Bellamkonda, chairman & MD, BSS Microfinance, said, “We will now be able to expand, and provide better products and services ..I am excited about the prospect that we can now play a more meaningful role to alleviate poverty …much better than we have done so far.”

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  1. R
    Ronaldo David
    Oct 2, 2016 at 9:34 am
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