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Small finance banks emerge as job creators amid coronavirus pandemic


Don’t be deceived by their nomenclature. ‘Small’-finance banks such as Jana and Ujjivan, and the pioneer in ‘micro’-lending, Bandhan Bank, are emerging as job creators even in challenging conditions, helping lift the pall of gloom in the broader jobs market.

These lenders are in the process of raising staff strength by 5-10% in the next three-four months, although several others in the sector might be more circumspect. The new workforce will largely be deployed for client servicing and to boost repayment, people familiar with the matter said.

Bandhan Bank has hired 2,500 people for its micro banking vertical with the lockdown restrictions being eased, while it is in the process of adding another 500 by the end of June.

“This is to boost our repayment collection. Large group meetings are difficult to do now. Our field staff are either meeting borrowers in small groups or approaching them individually. We have decided to lighten their burden by deploying more people,” Bandhan Bank managing director Chandra Shekhar Ghosh said.

Microfinance lenders across the board are focusing on repayment collection to stay liquid as their repayment collection was severely hit due to the lockdown. A sectoral study by Microfinance Institutions Network shows that the total value of installment falling due in April and May was about Rs 4,000 crore while collection efficiency was merely 10% until end-May. The Reserve Bank of India (RBI) has also extended the benefit of moratorium on loan repayment until August for borrowers in distress.

Among the small finance banks, Ujjivan is looking to add 150-200 people per month, raising its manpower from the existing 17,500. “We are recruiting for roles that we don’t have people for,” said managing director Nitin Chugh.

Varanasi-based Utkarsh would add 600-700 people to its present tally of 8,600 while Kerala-based ESAF has also hit the job market to add 300 more to its present manpower of 3,300.

“We are hiring now as we are converting our asset storefronts into bank branches,” said Ajay Kanwal, managing director at Jana Small Finance Bank, which is planning to hire about 500 people by September to add to its tally of about 15,000 people. “This branch conversion was delayed because of Covid-19. The positive impact of hiring will be visible by December,” he said.

About 70% of Bandhan’s new jobs are in Assam, Bihar and West Bengal. The bank had 39,700 people at the end of March including 26,000-odd people in micro banking. “Once things become normal and business growth starts picking up, we may redeploy the new recruits in growth-oriented verticals,” Bandhan’s Ghosh said.

Microfinance company Annapurna Finance said it is hiring too to bring down the load of its existing employees engaged in client servicing. Others like Arohan Financial Services, Satya MicroCapital and Village Financial Services are looking to hire only to fill the gaps created by attrition.

Top executives in the sector however said that the level of attrition has come down following dowckdown.


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