spandana microfinance
DESCRIPTION
spanadana microfinance:an overviewTRANSCRIPT
SPANDANA – Innovative Financial Solutions for the Poor
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2
AGENDA
Global Microfinance Industry Global Microfinance Industry
Micro-Finance India StoryMicro-Finance India Story
Spandana StorySpandana Story
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GLOBAL MICROFINANCE INDUSTRY
– 25% annual CAGR
– Asset Under Management- $32 Billion Dollars
– 25% annual CAGR
– Asset Under Management- $32 Billion Dollars
– Rapid development in some
regions seeing some over-
indebtedness
– Asian MFIs see corporate
governance, technology and
staffing as key issues
– Specifically in India, political
interference is seen as a
major concern
– Rapid development in some
regions seeing some over-
indebtedness
– Asian MFIs see corporate
governance, technology and
staffing as key issues
– Specifically in India, political
interference is seen as a
major concern
4
AGENDA
Global Microfinance Industry Global Microfinance Industry
Micro-Finance India StoryMicro-Finance India Story
Spandana StorySpandana Story
• More than ~ 135Mn households in India not yet serviced by financial players
• Potential credit demand of ~ INR 1,650 Bn (30K per poor household)
• Large players will continue to grow at a fast pace
• Indian market is the largest microfinance market in the world
• Indian Microfinance in a 2 Decade Story
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INDIAN MICROFINANCE INDUSTRY
Industry Overview
• Estimated to cover only about 10% of poor
• 7 Indian MFIs in the Global Forbes top 50 MFI
• Most efficient in terms of operating costs
• Estimated requirements are over $50 billion
Statistics
Current Microcredit Opportunity in India Rs Bn
Potential Credit Demand estimated in the range of INR 1,650 Bn (USD 37 Bn) to INR 2,314 Bn (USD 51 Bn)
255
1,650*
2,314^
Current Micro-credit Disbursement
Potential Micro-credit Demand
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INDIAN MICROFINANCE INDUSTRY• Dominated by the NBFC model
• Top MFIs in terms of member size and portfolio size are all NBFC• SHG under Govt. patronage is a significant player
• Grameen - Hybrid models increasingly relevant
• Lending is at about 12 – 15% pa flat• Far cheaper than moneylenders and even credit cards• Costlier than the average rates paid by
Recent Trend
MFI Growth – Borrowers and Outstanding Loan Portfolio
Source Inverting the pyramid, 2008, Intellecap
3.611.4
22.3
37.1
69.1
1.0 2.3
4.9
7.9
14.2
0
4
8
12
16
0
25
50
75
2004 2005 2006 2007 2008Loan Portfolio ( Rs Bn) (LHS) Number of Borrowers (MM) (RHS)
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INDIAN MICROFINANCE INDUSTRY
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AGENDA
Global Microfinance Industry Global Microfinance Industry
Micro-Finance India StoryMicro-Finance India Story
Spandana StorySpandana Story
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SPANDANA STORY
Highest in the Industry
PROFITABILITY
Lowest in the Industry
OPERATION COST
Highest in the Industry
ROE/ROA
6th Largest – Outreach 07
Global Ranking
Second Largest
Indian Ranking
Highest : A-/Stable
CRISIL Rating
1998
INCORPORATION
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Key Mile Stone
1998 2005 2006 2007 2008 2009Oct 2009
Outreach AP – 1 State
Karnataka – 2 States
Tamil Nadu – 3 States
Orissa, MH, Chhattisgarh – 6 States
Rajasthan and MP – 8 States
Jharkhand & Goa – 10 States
Gujarat – 11 States
PE Infusion First Round PE – JM Financial and LOK Capital
Second Round Equity Infusion – Valiant Capital Partners
Third Round of Equity – Tamaseak Holding (Under Process)
PAT 2.6 Crores 21 Crores 94 Crores
AUM 289 Crores 391 Crores 731 Crores 1868 Crores
2431 Crores
Registered as a
Society
Post Conversion
to NBFC2 Yr CAGR
in Loan Book: 28%
Post External Equity
Funding2 Yr CAGR
in Loan Book: 117%
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SPANDANA – Growth Story “ Financial”
4 Yr Revenue CAGR (05-09) : 82%4 Yr PAT CAGR (05-09) : 59%
4 Yr PAT CAGR (05-09) : 59%
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SPANDANA – Growth Story “ Operation”
Operational Highlights October 2009 March 2009 March 2008 March 2007
Presence in States 10 8 8 6
No. of Branches 1,188 944 435 295
No. of Clients (000) 3,384 2,543 1,240 916
Loan O/s. (Rs Cr.) 2,432 1,868 731 425
Total Staff 8,405 6,373 3,024 1911
SPANDANA – Growth Story “ Operation”
2,3882,892 3,916
7,313
18,683
386 722916
1,189
2,432
FY05 FY06 FY07 FY08 FY09
Gross Loans Outstanding (Rs MM)
SPANDANA – “Reach”
Andhra Pradesh
Karnataka
Maharashtra
Tamil Nadu
Rajasthan
Orissa
Madhya Pradesh
Chhattisgarh Jharkhand
Goa
OUTREACH - SSFL
TOTAL STATE : 10 STATES
NUMBER OF VILLAGES : 55,382
NUMBER OF DISTRICTS : 167
NUMBER OF CLIENTS : 3,384,531
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SPANDANA – SOCIAL Initiatives
FLOOD RELIEFBasic amenities to the best of our abilities to flood affected
victims
SCHOLARSHIPSMonetary support to students to complete higher education
SAFE DRINKING WATERTie up with HUL to supply water purifiers in rural areas
ALTERNATE SOURCES OF ENERGYTie up with Intelizon to supply solar lanterns
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SPANDANA – Departments
External FinanceExternal Finance
TreasuryTreasury
ITIT
MISMIS
HR ManagementHR Management
AdministrationAdministration
TrainingTraining
Field OperationField Operation
AccountsAccounts Corporate CommunicationCorporate Communication
New Business InitiativesNew Business InitiativesAuditAudit
Corporate Affairs ( Legal)Corporate Affairs ( Legal)
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Key Milestone of SSFL Operational Highlights August 2009 March 2009 March 2008
Presence in States 10 8 8
No. of Branches 1,150 944 435
No. of Centers 112,377 90,221 47,693
No. of Groups 363,326 265,650 125,883
Active Borrowers (000) 3,005 2,432 1,189
Loan O/s. (Rs Cr.) 2,388 1,868 731
Total Staff 7,981 6,373 3,024
Total Credit Assistants 5,648 4,556 2,223
Introduction
Spandana was founded in 1997 by Ms Padmaja Reddy. A chance encounter with a rag picker prompted Ms Reddy to start microfinance in the urban slums of Guntur. Since then Spandana’s microfinance programme has grown tremendously and the organisation is now one of the largest and most rapidly growing MFIs in India. Spandana is one of the most efficiently run MFIs in the world.
Spandana has achieved this remarkable distinction in a short span of just under a decade since its inception in 1998. This has been possible on account of its highly focused and clearly structured operations.Spandana has continued to successfully manage growth with operations now spanning 8 States Andhra Pradesh, Karnataka, Tamil Nadu, Orissa, Maharashtra, Chhattisgarh, Madhyapradesh and Rajasthan. It now boasts of a client base that constitutes almost 1.5% of the BPL (Below Poverty Line) population of India.
BOARD OF DIRECTORS
Mission
To be the leading service provider, creating market driven & equitable solutions for segments not optimally served.
This will be achieved through a culture of client focus, innovation, efficiency, transparency and excellence for the benefit of all stakeholders.
VISIONWe endeavour to serve our clients by addressing their
complete credit needs so as to bring in significant impact in their living standards. Besides financial intermediation, we would be focusing on sub sector intervention such as dairy development since about 90% of our rural clients have invested their loan amounts on this activity. We retain our core values of professional rigor, efficacy and excellence and remain a client responsive organisation by being humble and receptive to their needs.
PRODUCTSGeneral Loans Meant for daily wage women labourers and petty
traders for Income generation and consumption purpose with a loan size of between Rs. 2,000 and Rs. 20,000
Small Business LoanMeant for small business people with daily cash flow with a loan size of between Rs. 4,000 and Rs. 20,000
Micro Enterprise LoanMeant for SMEs and salaried people with a loan size of between Rs. 25,000 and Rs. 200,000
PRODUCTSAgri Family LoanMeant for small and
marginal farmers with a loan size of between Rs. 5,000 and Rs. 30,000
Dairy LoanMeant for milk collection agents and milk producers with a loan size of between Rs. 10,000 and Rs. 100,000
Farm Equipment LoanMeant mainly to cater to the needs of Small and Marginal Farmers with a loan size between Rs.50,000 and Rs.350,000
AREA OF OPERATIONS
PROJECTS
Educational and recreational programs for School dropouts
Objective: Facilitate programmes aimed at procuring rights
of children with a special focus on health, education, recreation and protection
Achievements:More than 500 children out of school have been
helped to attened fomal Schools.5 working children have been rescued from child
labour and are being provided with long term support for education
More than 500 child labourers & Street Children are being helped to go school through our Residential and Non-Residential bridge campus.
More than 500 children going to school have been helped to get through exams with remedical education support offered by Spandana.
Future Direction: Reach out to more than 10,000 children over a
period of 5 years with support in the areas of Education, Recreation, Health, Shelter, Food & Clothing through community based intervention and institutional services as situation demands.
Awareness Generation Activities
Objective: Educate masses on issues related to health,
legal, environmental and social aspects of human life in order to create an enabling atmosphere for individuals.
Achievements: 1500 people from 20 communities were
reached out with the message on HIV / AIDS, Cancer and Tuberculosis. The extension outreach wing has identified 50 positive cases under HIV and carrying out referral services in collaboration with various organisations.
Future Directions:To organize workshops and camps on
health and legal issues for focused groups.
To start vermin compost and paper recycling units.
To intensify Legal Awareness progammes. in the community.
Self Help Programs for Women
Objective: Create opportunities to marginalized women to
identify suitable vocations, impart trainings and establish micro enterprise units through thrift and credit programme.
Achievements: 100 Women from 12 Self Help Groups were helped
to receive revolving fund to the tune of Rs.1,25,00/- from various government run schemes to start income generation units.
500 women are part of the self help programme promoted by Spandana.
Future Directions:Aiming to form a Mutually aided co-operative
thrift society which would be mutually beneficial to women in establishing micro enterprise units and income generation programmes for more needy families living in poverty.
Identify and establish more IGP units for needy women.
Enroll more number of women in the thrift credit programme for larger benefit.
Programs for Young People
Objective: Facilitate programmes aimed at empowerment
through business / income generation / skill up-gradation, awareness and recreation for youth.
Achievement: Started in the year 2005, the Career Counseling
and Job Placement desk for youth has given opportunities for 40 young men and women to take up suitable vocation and successfully placed in jobs in corporate offices with a salary between Rs.2,000/- to Rs.6,000/- per month.
Future Directions:To impart skill development programmes for
young girls who are economically weak.Start micro enterprise units in their
neighborhood so as to realise their financial needs and help them market their products.
Imparting life skills.
Peace Initiative Programs
Objective: Promote peace, harmony and social justice through
programmes aimed at sensitisation and awareness.Achievement: The peace and conflict resolution project has created
better relationships among people living in communities manifested with religion based conflict. The project covers most sensitive slums in urban southern Hyderabad city of Andhra Pradesh.
Future Directions: To expand these activities and link them up with
micro finance and formation of youth clubs
Entrepreneurship Training and Development
250 young girls and women have undergone capacity building programmes for skill enhancement in Embroidery, beautician course, food processing and hand embroidery work apart from gaining knowledge on business and marketing skills.
Service to the Senior Citizens
Services to the Senior Citizens:5 Senior Citizens who have been deserted by their
families have been helped with food, shelter and clothing at our senior citizen's home.
Future Directions: To expand activities for care and support to women,
young girls and children in distress in terms of rescue operations in collaboration with organisations working for women and children’s rights.
To reach out to the senior citizens in need through emotional care and counseling, health, food and shelter in a larger way.
Start a job placement help line for women in need of jobs with a motive to provide them with safe and secure work place.
Loan Products1. General Loan
> Group based lending
> 5 to 10 women are formed into joint liability groups
> Loan is for income generation and debt relief
> Weekly repayment
> Tenure: 50 weeks (for loans above Rs.10,000- 60 to 75 weeks op-tion is given)
> Loan Size: Rs.2,000 to 15,000
> Clients: Daily wage laborers both skilled and unskilled and only women
> Interest Rate: 15% diminishing and 2.5% upfront fees
2. Small Business Loan
> Group based and individual lending (80% group and 20% indi-vidual lending)
> 5 to 10 women or men having small business are formed into joint liability groups
> Loan is for business expansion and working capital
> Daily repayment other than Sunday
> Loan Size: Rs.2,000 to 20,000
> Tenure: 100 days or 200 days or 300 days
> Clients: Small business people with daily cash flow both men and women
> Interest rate: 14% flat with no fees
3. Micro Enterprise Loan> Individual Lending> Guarantee: PDCs and Co Obligant guarantee> Should have a sizeable business/ salary/
rental income> Monthly Repayment> Loan Size: Rs.25,000 to Rs.200,000> Clients: SME owners, Salaried Employees etc
both men and women> Interest Rate: 18% diminishing and 2%
upfront fees
4. Agri Family Loan
> Group based lending
> 4 to 6 small and marginal farmers are formed into joint liability groups
[both men and women]
> Loan is for agriculture and allied activities;
> Flexible repayment. Interest payable monthly
> Tenure: One year
> Loan Size: Rs.5,000 to 30,000-
> Clients: small and marginal farmers with land holding of 1 to 10 acres
[both men and women]
> Interest rate: 15% diminishing and 2% upfront fees
5. Dairy Loan> Loan is given to Milk Collection Agents and
Milk Producers both men and women> Individual Lending:> Guarantee: The Dairy Owner who buys milk> Loan tenor: 1 year> Loan repayment frequency: once in fifteen
days> Loan Size: Rs.10,000 to 1,00,000-> Interest Rate: 12% diminishing
Thank You!