From Jaipur to the Big League

As AU Bank gets a universal licence, its founder Sanjay Agarwal looks back at his journey

- By SAMAR SRIVASTAVA

Thirty years ago, Sanjay Agarwal, founder of what went on to become AU Small Finance Bank, learnt the basics of lending and collecting on his loans. The then-25-year-old had completed his chartered accountancy degree and was clear that he didn't want to become a practising accountant.

In 1995, secondhand trucks were financed at 50 percent, personal loans at 40 percent, and Agarwal thought this was a good business to be in. There was also a boom in the NBFC space. With no capital, he approached four business families in Jaipur and asked them to form an NBFC to lend money with. He promised them a guarantee of 8 percent with 50 percent of profits shared post a 24 percent return.