In 2017, ESAF Microfinance, a non-banking finance company and microfinance institution, transformed into a small finance bank. It focuses on expanding the banking horizon to new unbanked/underbanked areas, yet it stands as a bank for all with a presence in urban, semi-urban, rural, and rural unbanked areas.
ESAF has adopted a unique social business strategy, with a triple bottom line approach, emphasizing People, Planet, and Prosperity. For every rupee invested in ESAF, studies by international agencies revealed that the Social Return on Investment stood at Rs. 3.19.
ESAF is committed to fostering a positive impact in society and the community. Its services are designed to effectively promote financial inclusion throughout the community
Latest News on ESAF Bank
ESAF Small Finance Bank partners with IFFCO Tokio General Insurance to offer comprehensive financial protection for its customers.
ESAF Small Finance Bank (ESAF SFB) has partnered with IFFCO Tokio General Insurance to provide financial protection to its customers. Through this partnership, ESAF SFB customers will have access to a range of general insurance products and services. IFFCO Tokio General Insurance, a joint venture between Indian Farmers Fertilizer Co-operative (IFFCO) and Tokio Marine Group of Japan, has signed a Corporate Agency agreement with ESAF SFB.
This collaboration is expected to expand ESAF SFB’s financial services suite, providing customers with value-packed insurance benefits. The bank’s customers will have access to a variety of simple yet valuable general insurance products and services. The partnership aims to make ESAF SFB’s customers financially secured by providing exclusive insurance products at affordable rates.
Warendra Sinha, Managing Director and CEO of IFFCO Tokio General Insurance, expressed his delight at partnering with ESAF SFB, hoping to provide customers with affordable insurance products and support the bank’s efforts in making its customers financially secured.
K Paul Thomas, Managing Director and CEO of ESAF Small Finance Bank, said that the collaboration with IFFCO Tokio General Insurance will help its customers make informed choices regarding insurance products. The customized insurance products offered by IFFCO Tokio General Insurance will cater to the general insurance needs of ESAF SFB’s customers, both existing and new.
The partnership between ESAF SFB and IFFCO Tokio General Insurance is expected to benefit customers by providing them with better insurance options and support. This partnership will enable ESAF SFB to further enhance its services, helping its customers navigate the complexities of insurance and make informed decisions about their financial security.
ESAF Bank is transforming its HR operations with AI-powered solutions to equip a future-ready workforce, poised to thrive in a rapidly changing business landscape.
With the rapid evolution of workplaces driven by AI, organizations that adapt to these changes are at an advantage. ESAF Small Finance Bank, ranked third in Fortune India’s Future-ready Workplaces study, is transforming its HR strategies to build a resilient, performance-driven, and innovation-led workforce. The bank’s MD & CEO, K. Paul Thomas, highlights its “digital-first approach” as a key factor in its success.
Thomas and Executive Vice President (HR) George Thomas emphasize the importance of creating a “future-ready organization” that prioritizes internal improvements, transparency, and employee engagement. To achieve this, the Thrissur-based bank has implemented various initiatives, including a digitalized recruitment system, online data migration, user access management, and resource allocation.
The bank is also committed to providing continuous technical and soft skills training for its 5,000-strong workforce. According to Thomas, this approach “ensures seamless hiring, particularly for tech-savvy young talent, while fostering a culture of continuous learning and upskilling.” The bank’s efforts to integrate AI-driven HR solutions, such as streamlining recruitment, enhancing performance management, and engaging employees efficiently, demonstrate its dedication to building a future-ready workforce.
The bank’s focus on leveraging AI and digital technology to drive its HR strategies reflects its commitment to adapting to the changing landscape of workplaces. By prioritizing innovation, performance, and employee engagement, ESAF Small Finance Bank is poised for continued success in a rapidly evolving business environment.
ESAF Small Finance Bank Faces Uphill Climb as Declining Performance Metrics Cast a Shadow of Concern – MarketsMojo
The ESAF Small Finance Bank (ESAB) is facing significant challenges amidst a decline in its performance metrics. As a small finance bank, ESAB focuses on providing financial services to underserved communities, particularly in rural and semi-urban areas.
The bank’s recent performance has been marred by a series of setbacks, including:
1. Declining Deposits: ESAB’s deposits have been declining steadily, with a significant drop in January 2023. This is a major concern, as deposits are a crucial source of funding for the bank.
2. Net Loss: The bank reported a net loss of ₹1.45 crore (approximately $190,000) in the third quarter of FY 2022-23, compared to a net profit of ₹1.15 crore (approximately $150,000) in the same quarter last year.
3. Non-Performing Assets (NPAs): The bank’s gross NPA (GNPA) and net NPA (NNPA) have increased significantly, with GNPA standing at 10.65% and NNPA at 5.45%. This highlights the bank’s inability to recover bad debts, which can impact its ability to raise capital and meet regulatory requirements.
4. Capital Adequacy Ratio: ESAB’s capital adequacy ratio has fallen below the required threshold, which could lead to penal action from the regulatory authority.
5. Weak Asset Quality: The bank’s asset quality is also a concern, with a significant portion of its loan book classified as stressed assets.
The bank’s challenges can be attributed to various factors, including:
1. Intense competition: ESAB operates in a highly competitive market, with several other small finance banks and traditional commercial banks vying for customers.
2. Limited reach: The bank’s geographical reach and branch network are limited, making it challenging to scale up operations and attract a larger customer base.
3. Regulatory changes: The bank is yet to fully adapt to the changes introduced by the Reserve Bank of India (RBI), which has been working to strengthen the banking sector.
4. Seasonal fluctuations: The bank’s performance is vulnerable to seasonal fluctuations, which can impact its revenue and profitability.
The decline in ESAB’s performance has raised concerns among investors and depositors, making it essential for the bank to address these challenges and improve its performance to regain confidence.
Explore the Top 7 Affordable Microfinance Banks in India
ESAF Small Finance Bank is a lending institution that provides microfinance solutions with competitive interest rates, specifically designed for small business owners and individuals in rural areas. The bank’s community-based lending model prioritizes women-led enterprises and self-help groups, recognizing the potential for economic empowerment through financial inclusion. ESAF’s loan offerings cater to a range of needs, including agriculture, small trade, and personal needs, with flexible repayment structures in place to ensure borrowers can manage their debt.
At ESAF, social impact is a key consideration, and the bank’s approach is guided by the goal of financial inclusion. By providing access to credit, ESAF aims to support low-income borrowers and help them build a better future. The bank’s focus on microfinance solutions with low interest rates enables borrowers to take control of their financial lives, invest in their businesses, and improve their overall well-being.
By targeting rural areas and underserved communities, ESAF addresses a significant gap in access to finance, which often hinders economic development and growth. The bank’s commitment to women-led enterprises and self-help groups also acknowledges the critical role that women play in driving economic progress and achieving financial stability.
ESAF’s approach is based on a collaborative and community-driven model, where borrowers and investors come together to drive sustainable economic development. By working closely with local communities, the bank builds strong relationships and fosters trust, ultimately leading to successful loan dispersals and repayment outcomes.
Overall, ESAF Small Finance Bank is a vital player in the microfinance sector, dedicated to promoting financial inclusion, social impact, and economic growth. Through its community-based lending model, the bank is empowering small business owners, individuals, and entrepreneurs in rural areas, giving them the tools and resources needed to build a better future. As a leader in rural finance, ESAF is committed to creating a more equitable financial landscape, where everyone has access to the resources they need to thrive.
CARE Ratings downgrades its outlook on ESAF Bank’s debt securities to negative, while reaffirms its previous rating assessment.
CARE Ratings has downgraded its outlook on ESAF Small Finance Bank’s various tier 2 bond instruments to “negative” from “stable” due to high asset quality stress. The rating agency has reassessed the bank’s profitability, noting that the bank has reported losses in the second and third quarters of FY25, and has a high gross non-performing assets (NPA) ratio of 6.96%. The bank’s gross stressed assets as a percentage of total advances rose to 7.03% as on December 31, 2024, from 4.84% as on March 31, 2024.
The rating agency has also noted that the bank’s pre-provision operating profit (PPOP) dropped to Rs 127 crore in the third quarter, a decline from Rs 143 crore in the second quarter and Rs 254 crore in the first quarter. CARE Ratings believes that the trend in PPOP will be a key rating monitorable going forward.
However, despite the losses, the bank’s capital adequacy stood at 22.7%, comfortably above regulatory requirements, with the tier-1 capital ratio being at 18.68%. The bank’s endeavour to expand its gold loan portfolio, which contributed to a reduction in risk-weighted assets, helped maintain robust capital adequacy.
To revert to a stable outlook, CARE Ratings requires ESAF Small Finance Bank to successfully raise substantial equity, which will help to mitigate the impact of the high asset quality stress. The bank will need to demonstrate improved performance and lower slippage in order to maintain a stable outlook. Overall, the downgrade in outlook reflects the challenges faced by the bank in managing its asset quality and profitability, and highlights the need for immediate attention and corrective measures to address these issues.
Stock Market Updates of ESAF Bank
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Experience high-yield savings: Earn up to 9% interest on your fixed deposits with top small finance banks!
Fixed deposits (FDs) are a popular investment option for those seeking reliable, long-term returns. Small finance banks in India are offering interest rates as high as 9% for certain tenures, making them an attractive option for conservative investors who prefer to minimize risk. Here are the latest FD rates offered by small finance banks:
Some banks, such as Unity Small Finance Bank, are offering FD rates above 9% for senior citizens, with a term of 1001 days and above. For general citizens, the highest rate is 8.6%. North East Small Finance Bank is offering 9% interest on FDs for 18 months to 36 months for both general and senior citizens. Utkarsh Small Finance Bank is offering 8.5% interest on FDs for 1,500 days or two to three years, while Suryoday Small Finance Bank is offering 8.6% interest for 5-year fixed deposits.
Other small finance banks, such as ESAF, Jana, Equitas, AU, and Ujjivan, are offering FD rates above 8%. These rates are applicable for various tenures, including 1 year, 1.5 years, 2 years, and 3 years. For example, Jana Small Finance Bank is offering 8.25% interest for 1-3 year fixed deposits, while Equitas Small Finance Bank is offering 8.25% interest for 888-day fixed deposits.
These rates are subject to change, so it’s essential for investors to check the current rates before investing. Fixed deposits are a great option for those who prefer a low-risk investment with predictable returns. With rates above 9% from some small finance banks, investors have a range of options to choose from, making it an attractive time to consider investing in fixed deposits.
7 Top-Notch Small Finance Banks Offering Attractive Fixed Deposit Interest Rates
The Reserve Bank of India (RBI) has established a special sector of the banking industry, known as small finance banks, which aims to promote financial inclusion for underserved segments of the economy. These banks are designed to provide access to banking services for micro and small businesses, small and marginal farmers, unorganized sector entities, and small business units that are not currently served by mainstream banks.
The RBI has licensed several small finance banks in India, which operate under the regulatory framework of the RBI. These banks offer a range of services, including deposit accounts, credit, and other financial products. One of the key features of small finance banks is their ability to offer fixed deposit (FD) accounts, which can help individuals and businesses earn interest on their deposits.
Here is a list of some of the small finance banks in India, along with their fixed deposit (FD) interest rates:
* Airtel Bank: 6.15% to 7.10% for 1-year FDs
* Au Small Finance Bank: 6.00% to 7.00% for 1-year FDs
* Equitas Small Finance Bank: 6.00% to 7.50% for 1-year FDs
* ESAF Small Finance Bank: 6.00% to 7.50% for 1-year FDs
* Janalakshmi Financial Services: 6.00% to 7.50% for 1-year FDs
* Suryoday Small Finance Bank: 6.00% to 7.50% for 1-year FDs
Please note that the interest rates may vary depending on the bank, deposit tenure, and other factors. It is always a good idea to check with the bank or their website for the most up-to-date information on their fixed deposit rates.
Overall, small finance banks have made significant progress in extending financial inclusion to underserved segments of the Indian economy. By providing access to banking services, such as fixed deposit accounts, these banks are helping to empower individuals and businesses to achieve their financial goals and improve their standard of living.
Small finance banks offer attractive returns on Fixed Deposits, with interest rates up to 9%!
The Reserve Bank of India’s recent 25 basis points cut in the repo rate has triggered a surge in interest rates offered by small finance banks (SFBs), making them attractive options for fixed deposit (FD) investors seeking higher returns. These SFBs, designed to promote financial inclusion, are now offering competitive rates, with some exceeding 9% for specific tenures. Here’s a breakdown of the top SFBs offering attractive FD rates:
* Unity Small Finance Bank: 9% for deposits with a tenure of 1001 days and 7.85% for one-year FDs
* NorthEast Small Finance Bank: 9% for deposits ranging from 18 months to 36 months and 7% for one-year FDs
* Suryoday Small Finance Bank: 8.6% for five-year deposits and 8.25% for one-year FDs
* Utkarsh Small Finance Bank: 8.5% for deposits of 2-3 years and 8% for one-year FDs
* ESAF Small Finance Bank: 8.38% for 888-day deposits, although their one-year option is lower at 6%
It’s essential to note that deposits in SFBs are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) up to ₹5 lakh, providing a safety net for depositors. However, experts advise caution when investing in these banks, which operate under different regulations than traditional commercial banks. To mitigate risks, investors are recommended to limit their deposits to the insurer’s coverage, ensuring the safety of their investments while still benefiting from the higher interest rates offered by these institutions.