Welcome to ESAF Small Finance Bank
Empowering every Indian with modern digital banking solutions — from savings to investments, all in one secure place.
About ESAF Small Finance Bank
ESAF (Evangelical Social Action Forum) Microfinance is a non-banking financial company and one of India’s leading microfinance institutions. Established on 11 March 1992 in Thrissur, Kerala, ESAF Microfinance received its licence from the Reserve Bank of India and became the first bank in Kerala to obtain a banking licence after independence. It is also Kerala’s first microfinance institution, having started its micro-lending operations in 1995.
Founded by Mr. K. Paul Thomas and Ms. Mareena Paul, along with five life members, seven annual members, and eight honorary members, ESAF was created to help reduce poverty and address unemployment among educated youth. Inspired by the Grameen Bank model in Bangladesh developed by Nobel Laureate Muhammad Yunus, ESAF entered the microfinance sector with a mission-driven approach.
Today, ESAF Microfinance operates successfully with over 3,750 employees across 10 Indian states, serving more than 7 lakh members through 160 dedicated branches.
What is Microfinance?
The microfinance concept introduced by Professor Muhammad Yunus was designed to provide small loans to the economically weaker sections of society who lack access to traditional banking services—particularly women. The aim was to help them become self-sufficient and financially independent by supporting their small businesses and entrepreneurial activities. These micro loans are offered without collateral and are closely monitored by the lending microfinance institutions. Repayments are typically made weekly or monthly in small installments, and the loans are usually sanctioned for short- or medium-term periods.
Operational Approach of ESAF Microfinance
ESAF is committed to creating opportunities and supporting the poor and underserved sections of society. In addition to promoting livelihood development, it has also expanded its focus to improving health and education. ESAF’s approach involves selecting the right strategies, providing necessary grants, and continuously assessing progress, impact, and outcomes. Based on these evaluations, strategies and interventions are refined to achieve better results.
The Fields of Action by ESAF
ESAF Microfinance has expanded its activities across multiple developmental areas by combining entrepreneurship with social impact. Its major initiatives include:
1) Kids for Kids
An Integrated Children Development Program aimed at creating a sustainable and holistic environment for underprivileged children. It provides essential support services such as healthcare, education, and social protection to prevent issues like malnutrition, child labour, trafficking, drug abuse, and child marriage.
Future plans include opening 300 additional centres to support 15,000 more children, establishing village libraries, creating teacher training centres, and developing value-based programs to foster well-rounded communities.
2) Development of Micro-Enterprise
Launched in 1995, the Micro Enterprise Development (MED) initiative—through ESAF Microfinance and Investments (P) Ltd. (EMFIL)—operates across 30 districts in 6 states through 105 branches, serving over 2.5 lakh clients.
MED supports both financial and non-financial needs by forming Self Help Groups (SHGs), strengthening local economies, and promoting modernized micro-industries. It provides business development assistance to help poor households build micro-enterprises and achieve economic self-sufficiency.
3) Healthcare Services
ESAF Healthcare Services delivers medical support through clinics, pharmacies, hospitals, and diagnostic centres. It operates two hospitals and four clinics in Palakkad and Thrissur. The Palakkad facilities include a 150-bed hospital and another with 50 beds.
Underprivileged patients receive free treatment, medicines, and diagnostic services. ESAF distributes ‘Suraksha’ and ‘Pariraksha’ health cards and conducts medical camps, workshops, and seminars on topics such as eye care, paediatrics, orthopaedics, gynaecology, Ayurveda, HIV, diabetes, anti-tobacco awareness, suicide prevention, and palliative care.
4) Natural Resource Management (NRM)
ESAF promotes sustainable resource use and environmental conservation through:
Non-conventional energy and green conservation projects: Encouraging biogas plants, biodegradable waste management systems, and vermicomposting.
Water supply and sanitation: Implementing World Bank–assisted projects like Jalanidhi and Jeevandhara to ensure rural drinking water access.
Engineering services: Providing planning, design, construction assistance, and building low-cost housing for tsunami relief.
Renewable energy: Promoting solar and other affordable renewable energy solutions for low-income communities.
5) Human Resource Development
The ESAF Centre for Excellence, established in 2005, focuses on employee development, skill enhancement, and quality improvement. It provides training facilities to upgrade capacities, maintain standards, and improve organizational efficiency.
6) Research and Development
ESAF conducts R&D to evaluate the impact and effectiveness of its microfinance and social initiatives. Activities include monitoring social performance, developing benchmarks and indicators, and conducting studies related to health, livelihood, and economic well-being of underserved communities.
ESAF SHG Federation
The Self Help Group (SHG) Federation of ESAF is a collective network of multiple SHGs formed across various geographical regions. Members support one another in achieving both individual and group economic and financial goals. This structure promotes capacity building and empowers women socially and financially. The federation is fully owned by its members, who collectively make decisions regarding developmental activities.
Objectives of the SHG Federation
To connect SHGs with local organizations, banks, and government agencies
To help SHGs achieve long-term sustainability
To enable better access to development and market-related information
To strengthen member SHGs by offering training, information, and on-site support in areas like accounting, bookkeeping, financial management, marketing, advocacy, government schemes, and bank linkage
To provide loans, including multiple lines of credit
To offer voluntary savings options
To promote and market products and services created by SHG members
To extend insurance services
To create a supportive socio-political environment that empowers women to live fulfilling and independent lives
Major Activities of the SHG Federation
SHG members participate not only in lending programs but also in various developmental activities such as:
Training women to become entrepreneurs
Promoting income-generating activities
Supporting business development initiatives
Building leadership among members
Providing financial services and credit support
Capacity-building programs
Counselling services
Educational initiatives
The Products and Services of ESAF
Main Products of ESAF Microfinance
1) Microcredit
ESAF provides various micro loans designed to create employment and business opportunities for its members. These need-based loans include:
Income Generating Loans (IGL): Tenure of 50 to 75 weeks
General Loans: Tenure of 50 weeks
Housing Loans: Typically 4 to 7 years
Vyapar Vikas Yojana Loans: Tenure of 4 months
Nirmal Loans: For clean water and sanitation, with a 2-year tenure
2) Insurance
ESAF offers affordable life insurance products covering both natural and accidental deaths. It has partnerships with Star Union Dai-ichi Life Insurance Company and United India Insurance to provide these services.
3) Business Development Services
To support entrepreneurship among low-income households, ESAF provides skill development training and market access assistance. These services are designed to help clients start new businesses or expand existing ones.
4) Other Value-Added Services
Beyond microfinance and skill development, ESAF collaborates with central and state governments, agencies, and corporations to deliver additional services that enhance the overall well-being of its clients:
• Swalambhan Yojana (NPS)
In partnership with the Government of India, ESAF provides access to the National Pension Scheme (NPS) under the Swalambhan Yojana, helping low-income individuals build long-term financial security.
• Vyapar Sewa (Sanchar Sakthi)
ESAF supports clients with marketing services powered through mobile technology, offered under the Government’s Sanchar Sakthi program.
• Jeevan Shudh
ESAF promotes a healthy lifestyle by offering the ‘Pureit’ water purifier from Hindustan Unilever through easy installment plans. This multi-stage purifier requires no electricity or running water and features an automatic shut-off system for safety.
• Money Transfer Services
Through Western Union, ESAF enables clients to send and receive overseas remittances securely.
• Micro Energy
In collaboration with Micro Energy Credit (USA), ESAF promotes clean energy by providing solar lamps, water purifiers, and energy-efficient cooking stoves to households.
Additional Loan Products
1) ESAF Vidya Jyoti Loan (Education Loan)
This loan supports the education of members’ children and aims to help families break the cycle of poverty through quality education. It covers both tuition and non-tuition expenses such as books, uniforms, examination fees, and transport.
Loan Amounts:
Up to Class 10: ₹8,000
Class 11 & 12: ₹15,000
College & higher studies: ₹16,000 to ₹50,000
Key Features:
Interest Rate: 22.99% (diminishing basis)
Processing Fee: 1% of loan amount + service tax
Loan Tenure: 1 or 2 years (based on loan amount)
Repayment: Weekly, fortnightly, or monthly
Eligibility: Member must have completed at least one year in the Income Generating Loan (IGL) cycle
2) ESAF House Improvement Loan (HIL)
This loan is designed to help clients improve their living conditions. It targets households with inadequate housing such as mud walls, poor roofing, or lack of sanitation facilities.
Key Features:
Maximum Loan Amount: ₹75,000
Repayment: Monthly installments
Eligibility Criteria:
Must have completed one loan cycle with ESAF
Must pass a strict Credit Bureau check
Must have lived in the same house for at least three years
This initiative has had a significant positive impact across various states by helping families improve their homes and quality of life.