Ujjivan is a rare bright spot in Indian finance

A DOZEN WOMEN dressed in saris sit on benches at the branch of the Ujjivan Small Finance Bank on Koramangala 80 Feet Road, awaiting disbursements of tiny loans. The money is needed for school fees, to finance home businesses or, in a couple of cases, bigger ventures that will have employees and assets. One is hoping to produce pickles; another wants working capital for a welding shop.

Ujjivan (“uplift” in Sanskrit) was founded in 2005 to bring the group-lending techniques being pioneered in rural microfinance to urban slums. The Koramangala branch is now one of 552 in India. This growth, and the extension of the ideas underpinning microfinance to loans for small rather than tiny businesses, reflect how the approach is maturing. Samit Ghosh, the founder, has held senior roles in Citibank and HDFC Bank, both of which played big parts in transforming Indian retail banking for the middle classes and above. Yet, despite that pedigree, raising a few hundred thousand dollars as seed capital was, he says, the hardest task of his career.