Award: Entrepreneur with social Impact
Chandra Shekhar Ghosh
Chairman and Managing Director, Bandhan Financial Services Pvt Ltd
Age: 54
Interests outside work: Reading, music and photography
Why he won this award: Creating a source of living for India’s underprivileged and now looking to include over 58 lakh unbanked customers under the banking purview. And this is just the beginning
It took two defining moments for Chandra Shekhar Ghosh to get to where he is today. The first was an encounter with a woman and her three-year-old daughter in the interiors of West Bengal. This was in the 1990s, when Ghosh was a health officer with a local NGO. After observing the mother boiling a pot of rice outside her hut, while her daughter was busy making a meal of the dust and dirt around her, Ghosh stepped in and delivered a sermon on the importance of healthy habits. “I’ll never forget the mother’s reply,” he says. “She told me, ‘My daughter has been asking for fish for three days now. And today, I will make another false promise to her, knowing I cannot give her what she wants. That’s what saddens me more than anything else’.”
What moved Ghosh more than just the deprivation was her resignation to the situation.
The second instance also took place in West Bengal when a conversation with a vegetable vendor in one of Kolkata’s busy markets brought home the tyranny of moneylending. The vendor was paying a moneylender an annual interest of about 700 percent on a daily loan of Rs 500. Every morning, he would borrow some money from the lender and return the principal amount with interest in the evening. “The vendor felt this was a good deal,” says the 54-year-old Ghosh. “He told me that his daily interest was the equivalent of just two cups of tea, and argued that even if he managed the impossible and got a loan from a bank without a guarantor, he would be paying more than his current interest just on transport—getting to and from the bank. The lender, on the other hand, would come to his house every evening to collect the dues.”
These were the conversations playing in his head when Ghosh decided to start a microfinance organisation with the goal of lending money to women entrepreneurs who were marginalised by society but were willing to try their hand at a small-scale business. Bandhan was born in 2001. Five years later, he registered his organisation as a non-deposit taking, non-banking financial company (NBFC) with the Reserve Bank of India (RBI), and Bandhan became Bandhan Financial Services Pvt Ltd. It now provides loans to people in rural and semi-urban India irrespective of gender, though women empowerment remains its primary goal.
Even at the inception stage, Ghosh knew that he wanted a long-term solution to poverty alleviation. “I was never keen on an NGO model or charity because they are mostly for the short term,” he says. “We wanted to impact the lives of a large number of people who are not able to have food even twice a day. How can we contribute towards their well-being? First, there has to be a stable flow of income; only then can other areas like health and education be taken care of.”
For 14 years, Bandhan Financial has remained true to its founder’s philosophy. But now, the ever-evolving NBFC is preparing itself for its next big leap: It’s on the cusp of becoming a full-fledged bank. If all goes as per plan, the proposed Bandhan Bank will be operational by the first quarter of the next financial year with an initial 600 branches across India.
In April this year, the RBI awarded Bandhan Financial a preliminary licence to set up new banks in India. It’s the first microfinance organisation in the country to win a coveted bank licence, staving off competition from 23 companies, including corporate giants such as Aditya Birla Group, Larsen & Toubro and Anil Ambani’s Reliance Capital. The RBI last issued a bank licence a decade ago to Yes Bank. (The only other firm to receive an RBI licence this year was infrastructure financing company IDFC.)
But Ghosh’s colleagues are confident that his hands-on approach will show them the way forward. Ashoka Chatterjee, institutional finance head of Bandhan Financial, says the new bank will not be a clone of its peers. “The ticket size of the transactions might be lower, but the customer base at over 58 lakh is huge. At present, 78 percent of Bandhan’s reach is in rural and semi-urban India. It will be a microfinance-focussed bank,” she says.
(This story appears in the 17 October, 2014 issue of Forbes India. To visit our Archives, click here.)
Heartlly congratulations sir. Your doing very very good work for villagers struggling for their basic needs.
on Feb 7, 2016Congrats sir You r great. you r playing a vital role to develop our village economy....well done....
on Sep 15, 2015i like it bandhan bank
on Aug 23, 2015A man and company to make Bengalis proud and the leader among common Indians.
on Jan 28, 2015