ESAF Small Finance Bank

Location India
Impact story Impact story Impact story

Vision & Mission: 


“To be India’s leading social bank that offers equal opportunities for the whole society through universal access and financial deepening, thus providing financial inclusion, livelihoods and economic development as a whole”.  


“To provide responsive banking services to the underserved and un-served households in India facilitated by customer-centric products, high-quality service and innovative technology.”  

ESAF Small Finance Bank’s Vision and Mission drives the triple bottom line agenda of balancing profit, people and planet in a way that low-income customers are able to move from poverty to self-sufficiency while they enhance their capabilities to fight the partiality of prosperity. 


  • Started as a social development organisation or a charitable society in 1992 by Mr. K Paul Thomas, a social entrepreneur, aimed at creating opportunities for the marginalised communities in a way that they are able to leave behind their perpetual state of backwardness and move ahead on road to growth and development.  
  • Sustainable livelihood promotion for steadier incomes and hence Micro Enterprise Development through the formation of Self Help Group of women in the villages was the first step.  
  • In 1995, Grameen model of lending with features of Self Help model was adopted. 
  • In February 2006,  ESAF took over a Non-Banking Finance company called Pinnai Finance and Investments Pvt Ltd which was renamed as ESAF Microfinance and Investments Pvt Ltd to bring the microfinance operations under a proper regulatory framework to ensure optimal scale and viability.  
  • With effect from 31st March 2008, the Micro Enterprise Development (MED) program of ESAF group in which microfinance was carried out got transferred to ESAF Microfinance, the Non-Banking Financial Company (NBFC).  
  • The organisation has grown in size and scale without compromising on its basic philosophy of “creating opportunities for all” following the principles of equity and fairness. 
  • In 2015, the Reserve Bank of India granted an in-principle license to ten NBFCs to set up Small Finance Banks in the country. ESAF was one amongst them.
  • ESAF SMALL FINANCE BANK was inaugurated on 10th March 2017 by, Chief Minister of Kerala.
  • Today, ESAF has grown to a size with a network of 413 branches in 101 districts, spread over 12 states across the country reaching over 2.4 million customers and gross loan outstanding of USD 635 million. 


Upon grant of final approval by RBI, ESAF Microfinance, jointly with Mr. Paul Thomas, set-up a new company ESAF Small Finance Bank. The bank is a subsidiary of ESAF Microfinance and set up as a public limited company under Companies Act, 2013 wherein ESAF Microfinance and its nominees hold at least 95% of the paid-up equity share capital. Mr. Kadambelil Paul Thomas subscribes up to 5% of the paid-up equity share capital of the bank.  

Board of Directors 

The Board of Directors of the Bank is comprised of 8 Directors out of which 5 are independent Directors with specialised knowledge in Banking, Finance, Agriculture, Co-operation etc. The Board of Directors is headed by a Part-Time Non-Executive Director as Chairman. The Board of Directors meets at least once in a quarter with not more than 120 days gap between two meetings. The Board has also constituted subcommittees of the Board for decisions making purpose, in accordance with the Directions of the Reserve Bank of India. 

Management Committees

  1. Outsourcing Committee
  2. Financial Inclusion Committee
  3. Apex Committee for Systems and Procedures
  4. IT Steering Committee
  5. Investment Management Committee
  6. New product Approval Committee
  7. Asset Liability Management Committee
  8. Business correspondenceCommittee
  9. Operational Risk Committee
  10. Executive Risk Committee
Board Committees

  1. Audit Committee
  2. Nomination and Remuneration Committee
  3. Risk Management Committee
  4. Corporate Social Responsibility Committee
  5. Customer Service Committee
  6. Management Committee
  7. IT Strategy Committe

 Market focus, products and Services

Given the market opportunity, ESAF Small Finance Bank shall continue to cater to the financial requirements of low-income families through an array of loan products that are specifically developed to serve their needs after taking into consideration their affordability. Some of these loans are Income Generation Loan, Agri Loan, General Loan for emergency purpose, Clean Energy Loan (Green Portfolio), Education loan to support schooling of children, Water and Sanitation loans etc 

At the same time, ESAF SBF has also started to offer new loan products e.g. affordable Micro Housing Loans, Vehicle Loans, Agriculture and Allied Loans, Home Loans, Secured Loans, Micro and SME Loans etc. in line with its target customer segments. 

ESAF Small Finance Bank has the following Strategic Business Units (SBUs) viz. 

SBU  Description  Key Customer Segments served 
Micro Banking  
  • Small ticket liability offering to group customers (Joint Liability based). 
  • Customer engaged in agriculture and allied activities. 
  • Low-income customers engaged in non-agriculture. 
  • Socially and economically disadvantaged people. 
Retail Assets 
  • Managing to offer to individual and MSMEs and group customers who want to avail loan outside JLG model. 
  • MSME 
  • Micro Banking Customers 
  • Retail Customers 
  • Agri and Allied 
Retail Liability and Third Party products 
  • Managing liability offering to non-group customers. 
  • Critical to fund the growing asset business and generate non-interest income. 
  • Retail customers-Non Resident Indian and High Net Worth Individuals 
  • Wholesale-Large Corporates, Other MFIs 
  • Government 
  • Micro, Small and Medium Enterprises 
  • Retail Customers-Salaried/ Middle-income class, NRI 

 1. Micro-banking: 

Micro-banking SBU is an integrated one-stop shop for the customers who are offered microloans, micro saving products, and pension products at an affordable cost through doorstep service using field agents. 

 Given the market opportunity, ESAF SFB will continue to focus on the same customer segment to reach 5 million customers in the next 5 years with an outstanding book of over US $ 2850 million by 2021  

2. Retail Assets 

Retail Assets is an important SBU which provides individual loans for housing, business loans and Agriculture loans to self-employed customers. According to various studies, the estimated potential for each of these segments is as follows: 

  • Affordable Housing: Affordable Housing Loans are defined as loans up to INR 2 million to the low-income segment. 20% of the existing customers are expected to be potential customers for affordable housing. The plan is to build the housing finance business across all the branches with an initial focus on ESAF customers. 
  • MSME: MSME Segment  comprises of proprietorship / partnership firms running as small manufacturing units, primary schools, shopkeepers, fruits / vegetable vendors, truck operators, food-service units, repair shops, machine operators, small industries, artisans, food processors and others, in rural and urban areas, whose financing needs are less than INR 10,00,000  

3. Retail Liabilities 

ESAF SFB’s Retail Liabilities strategy is focussed on creating product offerings for three distinct customer segments in the urban/semi-urban and rural areas and in the catchment area around branches. These segments are as follows: 

  • NRIs: ESAF has identified Non-Resident Kerala (NRK) as a focus segment given the home advantage it enjoys over other SFBs. As per the Studies published by Kerala Government, 3.5 million NRK households receive remittances of around INR 100,000 crores per annum and growing at 12% per annum, mainly from blue collar workers working in Middle East countries. 

 ESAF’s value proposition to this segment is around: 

  1. Short term loans to meet the emergency family needs
  2. Doorstep banking 
  3. Skype calling facilities at the outlets  to talk to their families residing in India and 
  4. Better interest rates on the deposits 
  •  HNIs (Social Deposits): A unique offering to target the High Net Worth customers (both individual and Corporates) to meet their social obligations by offering them the opportunity to participate in the ESAF mission to extend loan products to the unbanked and underserved through Hrudaya Deposits earning a social return on investment. ESAF SFB will offer this product to depositors who put deposits above INR 15 lacs for a minimum two-year period or deposits above INR 100 lacs. Customer will have the option to select the loan pool or purpose for which they would desire their funds to be used. Customer will receive confirmation to earmark the pool and receive a half-yearly report on the pool performance and the progress of the borrowers. Depositors will have the option to visit the field to meet the beneficiaries and experience first-hand the impact of their deposits.  

 Benefits of being a part of GABV 

 A membership to GABV is expected to benefit ESAF Small Finance Bank in several ways. Some of them are: 

  • Strengthen ESAF Small Finance Bank’s commitment towards financial, social and environmental inclusion through learning from a global player. 
  • Become a leading value based banking institution that supports the local economy through bringing positive socio-economic changes in the lives of the economically backward communities. 
  • Increased opportunities to partner with like-minded donors and institutions to manage projects that deliver triple bottom line return. 
  • Build new business models that are community owned and sustainable where ESAF’s investment yield long-term benefits for the communities we serve. 
  • Communicate to stakeholders the social impact of GABV’s existing business activities and the rationale for scaling-up. 
  • Help build the brand at a global level and improve media outreach.