UTKARSH VOICE Q3 [FY 15-16] : Volume-7, Issue-3

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1 Q3 FY HIGHLIGHTS The quarter was marked special with events like 6 years journey celebration of Utkarsh. On the occasion, the Company celebrated Annual Day with Sports Event all across its different Hubs / Region. RBI issued in principle license of Small Finance Bank to Utkarsh Micro Finance Private Limited vide its letter dated Oct 7, A timeline of 18 months has been specified by RBI for setting up the Small Finance Bank. The Company achieved a milestone of crossing `1,000 crore portfolio at the close of Q3. The microfinance outreach of the Company i.e. JLG vertical achieved a new milestone by crossing a portfolio of `1,000 crore on Dec 14, 2015 and setting up its 300 th Branch at Seoni, Division Chhindwara, Region Jabalpur, Madhya Pradesh. The Housing Loan pilot crossed the portfolio mark of `1 crore on Dec 15, At the close of Q3 FY , the JLG business stood at an outstanding of `10,555 Mn, the Micro Enterprises Loan business at `6, 72.3 Mn and the Housing Loan business at `12.1 Mn, thereby making a total portfolio of `11,239.4 Mn. Under the Credit Plus initiatives, the company continued its CSR activities and support to unserved segment of the society. Towards the Goodwill Project, the company visited Nirmala Shishu Bhawan, a home for differently abled orphan children and Nirmal Hriday, a home for especially abled adults. SWS Financial Literacy program was launched in October 2016 in MP and Bihar across 6 branches. Along with all business activities, the quarter was marked special with a new incumbents in the Senior Management viz. Mr. Pravin Kumar, Head Compliances and Mr. Rahul Singh, VP JLG Operations, HUB 2 & 3. 1

2 NEW INCUMBENTS IN SENIOR MANAGEMENT Pravin Kumar, Head - Compliances He has over 12 years of experience nationally and internationally while working with Bank and Micro Finance companies. Prior to Utkarsh he was with Accion International for six years to support their partner institutions in India and Myanmar. Apart from this he has also worked with ICICI Bank (handling sales and institutional development), Ujjivan Financial Services and Share Micro Finance (handling product development of group and individual loans). While working with these companies he also gained experience in Strategy and Policy, Audit and Risk. He holds Post Graduate Diploma in Rural Management from Xavier Institute of Management, Bhubaneshwar. Rahul Singh, Head - Operation (Hub - 2 & 3) He is an MBA from Indian Institute of Forest Management, Bhopal and has over 11 years of industry experience. Prior to joining Utkarsh, he has worked with Muthoot Fincorp Ltd. as Chief Manager, responsible for microfinance operations in Uttar Pradesh, Madhya Pradesh and Gujarat. Prior to that he was with Arman Finance Ltd as Operations Head. He has also worked with SKS Microfinance Ltd for more than 5 years and Deworm the World Initiative (currently Evidence Action), for their deworming program in Delhi and Rajasthan. He started his career at Usha Martin Industries Gamharia Plant, near Jamshedpur, Jharkhand. EMPLOYEE SPEAK I joined Utkarsh in December, 2012 and I have just completed 3 years of my wonderful journey in this prestigious organization. This is my second job. I feel happy to share that I learnt a lot from this institution during this very short tenor. Utkarsh offers a challenging and satisfying work environment with excellent opportunities for career advancement. It provides equal opportunity to every employer on the basis of merit. Here we believe that clients remain our real source of inspiration and I am glad that I am associated with this company. We always believe that, focus on Culture & Process results in Growth. This is the DNA that every employee of Utkarsh is having. The same is shared by our new joinees. Getting in-principle license of Small Finance Bank is the result of this, which has brought new energy among all our employees. I feel that this will be one of the best learning exposure on converting an NBFC MFI into a Small Finance Bank. Excerpts from a talk with Mr. Arvind Kumar, Vertical Head JLG Operations Support, Head office, Varanasi. 2

3 OPERATIONAL HIGHLIGHTS The company further expanded in new geographies of its 9 operational States. The 9 states being, Uttar Pradesh, Bihar, Jharkhand, Maharashtra, Madhya Pradesh, Delhi-NCR, Uttarakhand, Himachal Pradesh and Haryana. The total districts being covered in 9 states grew to 92. The Branch Network expanded to 326 [306 JLG Operations Branches and 20 MEL Operations Branches (with 2 MEL Branches having Housing Loan pilot operations also) for serving more than 8.8 lakh active clients. At the close of Q3 the JLG portfolio stood at `10,555 Mn with 8,64,108 lakh Active Clients, the MEL portfolio was `6,72.3 Mn with a client base of 11,648 active clients and the Housing Loan pilot reached 52 clients with `12.1 Mn portfolio outstanding. The total portfolio of the Company was `11,239.4 Mn as on Dec 31, The Company opened 31 new Branches (29 JLG Branches & 2 MEL Branch) during the Q3 FY A comparative summary of the operational highlights of the company is as below: Particulars As on Dec 31, 2015 As on Mar 31, 2015 As on Dec 31, 2014 MICROFINANCE OUTREACH No. of States No. of Districts Total No. of Branches No. of Branches in Uttar Pradesh No. of Branches in Bihar No. of Branches in Maharashtra No. of Branches in Madhya Pradesh No. of Branches in Delhi - NCR No. of Branches in Uttarakhand No. of Branches in Himachal Pradesh No. of Branches in Haryana No of Branches in Jharkhand Total No. of Centers 53,735 37,752 32,131 Total No. of Groups 229, , ,703 Total No. of Members 920, , ,088 Total No. of Clients 864, , ,619 Total Disbursement Cumulative ( in Mn) 28,071 17, ,726 Loan Outstanding ( in Mn) (Own+ Managed) 10,555 6, ,618 Total No. of Loan Disbursed 1,759,955 1,189,081 1,012,650 Total No. of Credit Officers 1, No. of Client Per Credit Officer Repayment Rate (%) 99.8% 99.9% 99.9% Par > 30 Days No. of Clients Amount ( In Mn) MICRO ENTERPRISES LENDING No. of States No. of Districts

4 Particulars As on Dec 31, 2015 As on Mar 31, 2015 As on Dec 31, 2014 MICRO ENTERPRISES LENDING cont. Total No. of Branches Total No. of Loan Disbursed 13,940 7,792 5,545 Total No. of Clients 11,648 6,823 4,948 Total Disbursement Cumulative ( in Mn) 1, Loan Outstanding ( in Mn) (Own +Managed) No. of Relationship Officer (RO) No. of Clients /RO PAR > 30 Days No. of Clients Amount (In Mn) AFFORDABLE HOUSING LOAN No of States No. of Districts Total No of Branches Total no of Loan Disbursed Total No. of Clients Loan Outstanding ( in Mn) NATIONAL PENSION SYSTEM (NPS) No. of States No. of Districts Total No. of Branches No. of Accounts 34,143 34,015 32,487 Total Subscription-Cumulative ( in Mn) EMPLOYEES Operational Employees 2, ,480 Total Employees 2, ,595 EMPLOYEE DETAILS Particulars As on Dec As on Mar As on Dec 31, , , 2014 JLG Operation MEL & HL Operations Support and Control Team TOTAL 2,560 1,752 1,595 FINANCIAL PERFORMANCE The Company achieved a PBT of ` Mn for the FY Important financial parameters are as below: Particulars As on Dec 31, As on Mar 31, As on Dec 31, 2015 (Unaudited) 2015 (Audited) 2014 (Unaudited) Income (` in Mn) Expenses (` in Mn) Profit Before Tax (` in Mn) Net Worth (` in Mn)

5 Key indicators Q3 FY Key Indicators As on Dec 31, As on Mar 31, As on Dec 31, 2015 (Unaudited) 2015 (Audited) 2014 (Unaudited)) CRAR % Operating Self Sufficiency (OSS) % 125.2% 120.1% ROA 3.25% 2.6% 2.11% ROE 14.65% 12.5% 12.23% Debt Equity Operating Expense Ratio 7.16% 7.7% 7.81% Cost of Borrowing 13.74% 14.0% 14.28% Repayment Rate 99.8% 99.9% 99.9% SOCIAL INTERVENTIONS (Credit Plus Activities) Health Initiatives In order to provide Primary Health Care in Company s operational areas where medical facilities are limited, Samutkarsh Welfare Services (SWS) has tied up with Ram Krishna Sewashram Hospital and GV Meditech Group. Currently with Ram Krishna Sewashram Hospital 6 Poly Clinics were Clinics organized at Ojhala, Mirzapur and with GV Meditech Group, 21 Poly Clinics were organized at Varanasi. During Poly Clinics the beneficiaries are given free medical consultation and medicines every fortnight. A total of 37 Poly Clinic Days were organized in Q3 FY , benefiting 2,352 patients. The company also launched Primary Health Care through Mobile Van facility in Kushinagar Division. Till date 47 Mobile Van Poly Clinics were conducted and 6,934 patients have benefitted from these. Financial Awareness In association with IFC & Utkarsh This project is presently being implemented in 9 Branches of UP & Bihar. Till Dec 31, ,460 members had registered for the training and 15,822 members had successfully completed the same. In association with Swiss Capacity Building Facility (SCBF) ACCION This project was launched in May 2015, in 5 branches and till Dec 31, ,568 members had received financial literacy training. SWS Financial Literacy Program was launched in October 2015 in MP and Bihar also. Till 31st Dec, 1916 had registered for the program and 1,677 members had completed training through 6 branches of Amarpatan, Gyanbabu Chowk, Maihyar, Motihari, Narkatiyaganj, and Satna. 5

6 Vocational Training Agarbatti Rolling Project SWS provides vocational training to members for agarbatti rolling. It also provides raw material and market linkages to the members. In FY kgs of agarbatti had been rolled by our clients and 630 kgs of raw agarbatti and kgs of scented agarbatti had been linked to the market. Goodwill Projects The employees visited Nirmala Shishu Bhawan, a home for differently abled orphan children, to sponsor meals and also to provide them with some of their daily needs. The company has also started visiting Nirmal Hriday, a home for especially abled adults and supported for some of their daily needs. Success Stories as clients speak I come from the holy city of Varanasi - Ashok Vihar Pahadiya area. I still remember the days when it was hard for me support my family as the only source of livelihood was irregular income of my husband and the income earned from the small eatery (Goal-gappa shop). Times went harder to meet the needs for survival. I still remember the day when I met an Utkarsh official who motivated me to broad base and scale up my income generating activity by utilizing my skills of eatery shop. Now I am an active member of a JLG group and standing on my own, I have made the best use of credit facility extended by Utkarsh. With an initial loan of 10,000, I renovated the shop and with subsequent loan of 15,000 I increased the stock of eatables. Slowly and gradually the business grew and my children started going to convent school and we started living a decent life. Recently, I availed a loan of 30,000 and expanded my small eatery by increasing the menu items and also gave employment to two people as employed two people helpers and cook. Today I am more confident and settled in life. The help from Utkarsh was not merely a financial help but it actually helped me to build a respectable position in the society. Apart from fulfilling my daily needs, I have also purchased half biswa land and have invested in LIC schemes. I express my gratitude towards Utkarsh for supporting me at the time when I needed the most, otherwise it would not have been possible to reach where I stand today. 6

7 UTKARSH IN NEWS 7

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9 Photo Gallery: UTKARSH ACTIVITIES Celebrating an important Milestone (Company crossed the milestone of `1,000 crore loan portfolio) Goodwill Activities at: Nirmala Shishu Bhawan Nirmal Hriday 9

10 Sports Day Event on, December 05,

11 Annual Day Event on December 06, 2015 Working Together Celebrating Together! Lighting the Diya of Inspiration! Company s Journey and the Way Forward by MD & CEO! Award Distribution to Best Branches! Realising Dreams! 11

12 Festival Celebrations, November 10, 2015 New Year Celebration - December 31, 2015 Your feedback is important to us. Please write to us at: Manager, Corporate Communication, Utkarsh Micro Finance Private Ltd. S2/639-56, Varuna Vihar Colony, J.P. Mehta Road, Cant., Varanasi , Uttar Pradesh ID publications@utkarshmfi.com website 12