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BANDHAN: Commercializing a Social Cause
Abstract
Bandhan Financial Services Pvt. Ltd. (Bandhan), the largest microfinance institution in India, got an ‘in principle’ approval in April 2014 from India’s central bank, the Reserve Bank of India (RBI), to start full-fledged banking operations. Bandhan, which had been formed by Chandra Shekhar Ghosh (Ghosh) with the social motive of giving small loans to the asset-less poor in unbanked regions of India, would now have to change its business model to play on a bigger turf and on a larger scale. While transforming itself into a bank would give it benefits like access to cheaper funds and increased scope of operations, but the considerable liberty it enjoyed by being a microfinance entity would be lost.... |
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Issues
The case is structured to achieve the following teaching objectives:
- Understand various issues and challenges in managing the growth and opportunities of an entrepreneurial venture, especially a social venture
- Understand the operations of a microfinance institution taking Bandhan as a case in point and appreciate the constraints and the challenges faced by it, with the prime focus on India.
- Analyze the challenges lying ahead for Bandhan and explore ways and means to overcome those challenges
- Recognize and evaluate the challenges faced in the transformation of an organization, particularly of a social venture into a commercial one and study how to unite their goals and actions.
Keywords
Chandra Shekhar Ghosh,Bandhan Financial Services,CREATE Principles of Bandhan,Participatory Rural Appraisal,Trickle-down effect,The Bandhan model,people-centric model,SIDBI,Financial Inclusion,Group Lending
