With a population of less than 5,000, Pandia is a small village in the coastal district of Ganjam in Odisha. Like most villages, chit funds are aplenty here, mostly run with political backing, as bank branches are 7-8 km away. It’s not like stories of these funds folding up overnight and vanishing with villagers’ hard-earned money has not reached Rameshsundar Sahu. But the sweetmaker, belonging to the gudia caste, still invests Rs.200 out of his daily income of Rs.500 into one. Sahu is not alone. Chit funds are the only source of finance for villagers looking to save up for big investments like marriage or building a house in this unbanked tier-6 village.
It is this setup that IFMR Holdings aims to change. So far, it has brought institutional credit to 17 million low-income customers such as Sahu by inserting itself into every step of the process, right from facilitating rated debt capital to running a ‘wealth management’ programme in remote villages.
Usually associated with ultra high net worth customers, wealth management in a village setting is unheard of. But that’s exactly what IFMR is doing through Kshetriya Gramin Financial Services (KGFS). Run by its subsidiary IFMR Rural Channels & Services (IRCS), the rural outreach programme is present in six districts across Odisha, Tamil Nadu and Uttarakhand, four of which are operationally profitable.
For instance, KGFS Berhampur (or Dhanei as the villagers call it after a local river) is responsible for 33 branches in remote villages across Ganjam. “We have lent around Rs.160 crore to close to 80,000 households in Ganjam,” says Subasish Chatterjee, senior regional manager. Moreover, Chatterjee is responsible for 136 locally recruited ‘wealth managers&rsq