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IPO is the Right Way to Reach Scale – Bandhan’s C.S. Ghosh on the SKS Microfinance’s IPO
As the SKS IPO has opened , Microfinance Insights brings to you reactions from various industry stakeholders, and their view of what it means for the future of microfinance.
Chandra Shekhar Ghosh, Founder and CEO of Bandhan, a Kolkata-based microfinance company, is unsure what the effects of the IPO move will be.
According to him, the sector will have to watch carefully how other MFIs respond over the next two to three months. But, on principle, he agrees with SKS’ move. “It’s a very good thing to get the money to reach the poor,” he says. “To meet capital needs and to reach more people, it must go the IPO route.” Ghosh doesn’t see another way to reach scale, without sizeable funding from the government toward the social sector.
Ghosh disagrees with Muhammad Yunus’ critique that to go public is to profit from the poor. The situation of Indian microfinance is unique, he says, and cannot be compared to Yunus’ experiences in Bangladesh.
“Sixty five percent of money has come from people themselves in the Grameen Bank. They are collecting deposits from their clients,” he explains. “That is enough to reach their small population. We cannot take a deposit from the people or clients. 90% of our funding relies on bank funding.”
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