ICICI Bank 2008 Annual Report Download - page 47

Towards a better life
India’s economic outlook is buoyant but there are millions of Indians who are currently not integrated into the
economic mainstream. Engaging them in the growth process is crucial for India’s sustainable growth and social
development. This would address existing inequalities and drive GDP growth to an even higher level.
The ICICI Group’s financial inclusion initiatives
Access to financial services is one of the key enablers for participation in the nation’s economy. The ICICI Group
is seeking to combine a sustainable business model with a social and human development agenda through a
range of initiatives aimed at providing access to financial services to those who are currently not within the ambit
of formal financial services. The aim is to build a business model that can provide financial services effectively
across rural India and deliver value to this market at a low cost. The ICICI Group is working with key stakeholders
including agri-based industries, government authorities and micro finance institutions in this direction. Technology,
including biometric authentication tools, forms a core element of the strategy to accelerate the penetration of
financial services.
The ICICI Group’s key initiatives towards financial inclusion include:
Microfinance: ICICI Bank’s microfinance programme facilitates extension of credit to low income households. With
a portfolio of Rs. 9.6 billion and having touched the lives of about 3.5 million people, this microfinance programme
is one of the largest among private sector banks in India. ICICI Bank was able to scale up this programme through
the innovative “Partnership model”. ICICI Bank’s participation has catalysed the growth of smaller micro-finance
institutions (MFIs) in India.
The Bank has focused on development and capacity-building in the MFI sector. In 2007, there were only five
MFIs in India with 500,000 or more customers. The ICICI Group has worked to significantly expand the sector by
developing new MFIs. The Bank’s Emerging MFI team, its Social Initiatives Group and the Centre for Microfinance
at the Institute of Financial Management & Research (IFMR) worked in collaboration in this area. The Bank’s Social
Initiatives Group acted as a catalyst for the development of appropriate channels and products that make basic
financial services accessible to the poorest clients. This has resulted in partnership with venture capital funds
engaged in identifying opportunities, providing equity finance, mentoring new entrepreneurs and facilitating
product development. The Centre for Microfinance at IFMR worked with large MFIs, whose volumes required
stronger planning and processes at different levels to expand or consolidate their operations, refine their risk
assessment and manage an increasing inflow and outflow of funds. The Emerging MFI team in the Bank identified
and developed organisations or individuals at varying stages of readiness to take up micro-finance as a viable
business. It also worked to resolve the geographical asymmetry of micro finance in India.
ICICI Bank’s other innovations in the field of micro-finance include the first securitisation deals in the micro finance
industry in India in 2004. The Bank’s current major initiatives include introduction of biometric smart cards towards
ensuring Know Your Customer (KYC) compliance and roll out of the banking correspondent model.
Other micro-financial services: To provide easy savings for low-income customers, ICICI Bank has launched a
micro-savings facility. A state-of-the-art solution based on a biometric-enabled smart card and a battery-operated
authentication device developed by Financial Innovation & Network Operations (FINO), a partner organisation,
this micro-savings product provides access to a savings account with convenient features. Apart from this
savings account, the Bank also offers recurring and fixed deposits to enable customers to avail higher return on
their savings.
The perpetual uncertainties in the income cycle of the poor increases their vulnerability to economic shocks.
ICICI Prudential Life Insurance (ICICI Life) provides micro insurance services which have promoted financial
security among the rural poor and improved their ability to avail credit facilities for undertaking income generating
activities. Similarly, ICICI Lombard General Insurance (ICICI General) provides a range of non-life insurance
Promoting Inclusive Growth
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