Bandhan began as a small economic non-profit in West Bengal, India. Its mission: alleviate poverty. Its founders believed that the best way to accomplish this mission would be to open up avenues of economical empowerment to disadvantaged women. This way, they reasoned, these women would not only lift themselves up out of poverty, but would also become engines of economic growth within their communities. By assuring the prosperity of families and communities, Bandhan’s vision for systemic economic improvement would become a reality.
Bandhan – which means “bonding” – became immensely successful. In August 2015, Bandhan received approval from the Indian government to operate as a bank. Bandhan had more than proved itself, providing lending services to more than 6.5 million underserved consumers, primarily women. It has garnered international recognition, including the 2014 World Economic Forum Global Growth Company Award and the Social Impact Award from Forbes.
Bandhan enjoyed early financial support from IFC, which has been a shareholder since 2011. IFC’s $29 million seed investment made it the second largest microfinance investor in India’s financial sector. The significance of this early investment is visible in the overwhelming results and impact that Bandhan has had on the Indian microfinance market.
Microfinance is the Only Way to Reach Underbanked Populations
One-third of the global underbanked population reside in India. Without access to banking services, it is almost impossible for poor, rural and especially female citizens to extract themselves from poverty. Even a modest loan can help a woman launch a successful micro-enterprise and radically disrupt the poverty cycle.
Consider, for example, the story of Sibiancy Kyriem. A 40-year-old garments trader, Kyriem secured a loan of less than $200 in 2008. Her business flourished, and she now also owns a restaurant. With this modest loan from Bandhan, she moved her entire family out of poverty, putting her children through graduate school. She mentors other women in her community, helping them pursue their own paths to successful entrepreneurship.
Bandham’s new status as a bank means it will be able to produce many more stories like Sibiancy Kyriem’s, and stands as a testament to the strengths of microfinance.