Bharat Finance Ltd.

Bharat Finance Limited (BFL), formerly known as SKS Microfinance Limited, is a prominent microfinance institution (MFI) in India. It plays a significant role in providing financial services to low-income individuals and women, primarily in rural and semi-urban areas. Founded in 1997 by Vikram Akula, BFL aimed to alleviate poverty by offering small loans to help individuals start or expand their businesses and improve their livelihoods.

BFL operates on the Joint Liability Group (JLG) model, where small groups of women guarantee each other's loans. This system fosters peer support and accountability, which has proven effective in ensuring high repayment rates. The loan amounts are typically small, catering to the needs of micro-entrepreneurs involved in activities like agriculture, animal husbandry, handicrafts, and small retail businesses.

Over the years, BFL has expanded its operations across numerous states in India, becoming one of the largest MFIs in the country. It has also diversified its product offerings beyond micro-credit to include services like insurance and other financial products, tailored to the needs of its target clientele. The company emphasizes responsible lending practices and financial literacy programs to ensure that borrowers understand the terms and conditions of their loans and can manage their finances effectively.

In 2016, Bharat Financial Inclusion Ltd (BFIL), the name SKS Microfinance had adopted, was acquired by IndusInd Bank. This acquisition marked a significant shift in the microfinance landscape, as it was one of the first instances of a large private sector bank acquiring a microfinance institution. Following the acquisition, BFIL became a wholly-owned subsidiary of IndusInd Bank. The merger brought together the extensive banking network and resources of IndusInd Bank with the deep rural penetration and microfinance expertise of BFIL, leading to synergies in operations and enhanced service delivery.

As a subsidiary of IndusInd Bank, Bharat Finance continues to focus on providing microloans and other financial services to underserved communities. It leverages technology and innovative approaches to improve efficiency, reduce costs, and expand its reach. The merger has also allowed BFL to offer a wider range of products and services to its customers, including savings accounts, remittances, and other banking facilities.

Despite the positive impact of microfinance on poverty alleviation, BFL, like other MFIs, has faced challenges such as regulatory changes, economic downturns, and concerns regarding over-indebtedness among borrowers. However, it has strived to adapt to these challenges by strengthening its risk management practices, promoting financial literacy, and focusing on customer-centricity.

Today, Bharat Finance Limited remains a significant player in the Indian microfinance sector, committed to empowering individuals and communities through access to financial services and contributing to the broader goal of financial inclusion in India.