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SMERA MFI Grading
MAHASHAKTI FOUNDATION (MSF)
Date of Report:
27th April, 2018
Valid Till:
26th April, 2019
SMERA
Comprehensive
Grading
M3C3
(Above average capacity
of the MFI to manage its
operations in a
sustainable manner and
average performance
on code of conduct
dimensions)
The grading is done on 8 x 5 matrix. The matrix assesses the entity on two broad parameters:
Capacity to manage their microfinance operations in a sustainable manner
Performance on COCA dimensions
Scale C1 C2 C3 C4 C5
M1
M2
M3 M3C3
M4
M5
M6
M7
M8
The MFI obtains comprehensive MFI grading of “M3C3”. It signifies above average capacity of
the MFI to manage its operations in a sustainable manner and average performance on code of
conduct dimensions.
SMERA’s MFI Comprehensive Grading Scale
Grading Rationale
Microfinance Capacity Assessment Grade
MSF obtains “M3” as its performance grade which signifies “above average capacity of the organization to carry out its activities in a sustainable manner”.
Code of Conduct Assessment Grade
MSF obtains “C3” as its Code of Conduct Assessment Grade which signifies average performance on COCA dimensions.
Comprehensive MFI Grading provides opinion of the Rating Agency on MFI’s capacity to carry out its microfinance operations in a sustainable manner and its adherence to Industry code of conduct. MFI Capacity Assessment Grading has been done on the dimensions of Capital Adequacy, Governance, Management Quality and Risk Management Systems. Assessment on Code of Conduct has been done on the indicators pertaining to Transparency, Client Protection, Governance, Recruitment, Client Education, Feedback & Grievance Redressal and Data Sharing. Some of these indicators have been categorized as Higher Order indicators consisting of indicators on Integrity and Ethical Behaviour and Sensitive Indicators.
Conflict of Interest Declaration The Rating Agency (including its holding company and wholly owned subsidiaries) has not been involved in any assignment of advisory nature for a period of 12 months preceding the date of the comprehensive grading. None of the employees or the Board members of the Rating agency have been a member of the Board of Directors of the MFI during for a period of 12 months preceding the date of the comprehensive grading.
Disclaimer This Grading is based on the data and information (Data) provided by the MFI and obtained by SMERA from sources it considers reliable. Although reasonable care has been taken to verify the Data, SMERA, makes no representation or warranty, expressed or implied with respect to the accuracy, adequacy or completeness of any Data relied upon. SMERA is not responsible for any errors or omissions or for the results obtained from the use of the Grading or the Grading Report and especially states that it has no financial liability, whatsoever, for any direct, indirect or consequential loss of any kind arising from the use of its Gradings. A SMERA Grading does not constitute an audit of the graded entity and should not be treated as a recommendation or opinion or a substitute for investor's independent assessment of whether to buy, sell or hold any security. The SMERA Grading Report should not be distributed/ published/ reproduced in any form without SMERA’s prior written approval.
Historical Rating Grades
Date Rating Agency Rating/Grading
April, 2017 ICRA M3C4
January , 2016 SMERA MF3
November, 2014 CRISIL mfR5
May , 2013 CRISIL mfR5
March , 2012 CRISIL mfR5
October, 2010 CRISIL mfR4
August , 2009 CRISIL mfR4
November , 2008 CRISIL mfR5
4
Microfinance Capacity Assessment Grading Symbols and Definitions
Grading Scale Definitions
M1 MFIs with this grade are considered to have highest capacity to manage their microfinance operations in a sustainable manner.
M2 MFIs with this grade are considered to have high capacity to manage their microfinance operations in a sustainable manner.
M3 MFIs with this grade are considered to have above average capacity to manage their microfinance operations in a sustainable manner.
M4 MFIs with this grade are considered to have average capacity to manage their microfinance operations in a sustainable manner
M5 MFIs with this grade are considered to have inadequate capacity to manage their microfinance operations in a sustainable manner.
M6 MFIs with this grade are considered to have low capacity to manage their microfinance operations in a sustainable manner.
M7 MFIs with this grade are considered to have very low capacity to manage their microfinance operations in a sustainable manner.
M8 MFIs with this grade are considered to have lowest capacity to manage their microfinance operations in a sustainable manner.
Code of Conduct Assessment Scale and Definitions
Grading Scale Definitions
C1 MFIs with this grade have excellent performance on Code of Conduct dimensions
C2 MFIs with this grade have good performance on Code of Conduct dimensions
C3 MFIs with this grade have average performance on Code of Conduct dimensions
C4 MFIs with this grade have weak performance on Code of Conduct dimensions
C5 MFIs with this grade have weakest performance on Code of Conduct dimensions
SMERA’s MFI Grading Scale
5
Name of the MFI Mahashakti Foundation (MSF)
Organization Head – Microfinance Business
Name Mr. Jugal Kishore Pattnayak
Designation Managing Director
Mobile No. (91) (9437574507)
Email ID [email protected]
Date of Joining 19-Oct-2004
Date of Incorporation/Establishment 19-Oct-2004
Date of commencement of microfinance business (as a NBFC-MFI)
01-April-2005
Legal Status NGO-MFI (Trust)
Business of the company Microfinance service using Self Help Groups, Education Loan, Housing Loan.
Correspondence Address
In front of State ware, Railway Station Road, Bolangir, Odisha - 767001, India
Geographical Reach (As on 28/Feb/2018)
No. of States 01 No. of Districts 12 No. of Branches 15 No. of Active Borrowers 10539 No. of Total Employees 62 No. of Field/Credit Officers 30
Visit of the Assessment team 02nd April, 2018 to 07th April, 2018
Mahashakti Foundation (MSF) was established in 2004 as a trust (Registered in Odisha under India
Trust Act, 1882) in Kalahandi district of Odisha with support from FARR-CARE CASHE project of DFID
(Govt, of UK).It was set up with the objective of providing financial inclusive services in underserved
and unserved parts of Odisha. MSF has significantly expanded its reach and has presence in 12
Districts carrying out various social and economic projects.
Company Profile
6
Product Profile
Products & Description
Loan Size (Rs) Interest Rate
(A) (In %)
Processing Fee (B)
(In %)
APR (Interest Rate and
Processing fees) (In %)
(C=A+B) Small Business Loan
14,000 24 Nil 24
Micro Enterprise Loan
16,000 - 48,000 24 1% (for loan
amount greater than 25,000)
25
Renewable Energy loan
1,900 18 Nil 18
House Repairing and Sanitation Loan
25,000 – 1,00,000 18 1% (for loan
amount greater than 25,000)
19
Education Loan 10,000 – 30,000 18 1% (for loan
amount greater than 25,000)
19
Small Business Loan: MSF provides loan for starting up new business and loan size is 14,000.
Micro Enterprise Loan: MSF provides loan for the growth of existing business and loan size varies from
Rs.16, 000 to Rs.48, 000.
Renewable Energy loan: MSF provides loan for solar light and loan size is Rs.1900.
Housing Repairing and Sanitation Loan: MSF provides loan for House Repairing and Sanitation and
loan size varies from Rs.25,000 to Rs.1,00,000.
Education Loan: MSF provides education loan for the children of its micro-credit borrowers only, and
loan size varies form Rs.10, 000 to Rs. 30,000.
7
Promoters Profile
Name Position Qualification Profile
Mr. Santosh Kumar Mishra
President
M.A., (Mathematics),
Odisha Administrative Service (Retd.)
He has more than 40 years of experience in the field of rural development. Served as an ASO, Tahasildar, and Block Development Officer in different blocks of rural Odisha.
He has been associated with SHG Bank linkage program for more than 15 years.
Associated as a President with Mahashakti Foundation.
Ms. Rojaleen Bhuyan Vice President
M.S.W., B.ED.
Development Practitioner having more 15 years of experience in social mobilization, institution building, and corporate social responsibility out of which 5 years in management of microfinance and livelihood projects of both national and international organizations.
Mr. Jogananda Behera Secretary M.B.A., H.R.
Mr. Behera has more than 10 years of working experience on livelihood promotion and community health. He worked with international agencies like Oxfam and CARE on HIV Aids and livelihood promotion projects. He also worked with Western Odisha Rural Livelihoods Project for the promotion of different clusters for 3 years.
Mr. Behera looks after overall monitoring and management of different social development projects.
8
Name Position Qualification Profile
Mr. Dibakar Maharana Assistance Secretary
B.SC., Agriculture
(OUAT, Bhubaneswar)
Dibakar Maharana was graduated from the Agriculture University of Odisha, in 1971, served for few months under Govt. of Odisha as Agriculture Officer. Then switched over to State Bank of India and worked in different capacities and retired in 2009 as Chief Manager. His last assignment was Chief Manager Lead Bank. During his tenure in SBI, he was deputed to Samanwita Gramya Unnayan Samiti, G,Udaygiri as its Project Director which is the only institution in India co-sponsored by SBI and State Govt. engaged in all round development of tribals of
Kondhamal District. After retirement He joined as Bank Linkage Officer in TRIPTI a World Bank aided project of Govt. of Odisha run by Panchayatiraj dept., and then worked as Project Executive Bank Linkage under the flagship programme of Govt. of India, N.R.L.M. (O.L.M.). He was instrumental for role out of Bank Mitra concept in Odisha and streamlining Bank Linkage strategy for the women SHGs. At present engaged as State Resource person O.L.M., RUDSET institution and many other organizations engaged in capacity building of rural poor.
9
Name Position Qualification Profile
Sri. Prakash Chandra Sahu Treasurer B.A., P.G.D.C.A.
He started his career as a grass root level development professional. He has more than 20 years of experience in social mobilization, institutional building, Microfinance and Livelihood. He is a development practitioners and trainer by profession.
Smt. Aradhana Nanda Member M.A.
(Economics)
She is president of Odisha chapter of National Alliance of Women organization.
She has 25 years of experience in the field of Social Development. Served in different NGOs since 1978 with the responsibility of planning and coordination of entire program, staff assessment, monitoring & supervision of women, child development, training & development, HIV/AIDS counseling, gender training, capacity building & livelihood development. She was instrumental in strengthening SHG movement in western Odisha. Successfully established community based Microfinance model during CARE-CASHE project.
10
Management Profile
Name Position Qualification Profile
Mr. Jugal Kishore Pattnayak
Managing Director
M.A., L.L.B.
He is one of the founding members of Mahashakti Foundation.
He has more than 20 years of experience in the field of Livelihood Development & Microfinance. He served in a state level NGO since 1991 with different capacities. He worked as the Project Officer of FARR CARE CASHE (Credit and Savings for House hold Enterprise) of CARE (DFID Supported) for 6 years. (2000-2006)
He has exposure to various MSF programs in India and abroad. He is instrumental in setting up community based Microfinance Organizations and Producer Organizations in remote tribal areas of KBK region of Odisha.
Mr. Jyoti Ranjan Mohapatra
General Manager
M.Com., I.C.W.A.I.
Mr. Mohapatra is the co-founder of Mahashakti Foundation he has versatile experience in operations, finance, audit, management information system (MIS), After completion of M.Com, ICWAI, he started his career as Finance Manager, Head –Finance, Head Internal Audit, in a national level leading NGOs as well as micro finance projects.
He has an experience on capacity building of community level institutions on institutional development.
11
Name Position Qualification Brief Profile
Mohan Kumar Baliyarsingh
Director Operations
Post Graduate and
P.G.D.M.
Mr. Baliyarsingh has more than 25 years of experience in Livelihoods and Microfinance Operations. He is a Post Graduate Diploma in Management from Bhanjavihar, Berhampur University and Post -Graduation in History, Utkal University.
He has served in different national level institutions i.e Rashtriya Gramin Vikas Nidhi, CARE India, (CASHE Program) ACCION International and ACCESS Development Services in different capacities. A major part of his career has been devoted towards management and sectoral initiatives in Microfinance, Code of conduct assessments, and handholding and training programs on various facets of Microfinance including Financial Literacy. He is instrumental in establishing sustainable community managed Microfinance Organizations in Odisha and various studies and research including Access to Finance Vision Documents of Odisha.
Bikram Keshari Patra Head Finance M.B.A.
Associated as a Head of Finance with Mahashakti Foundation.
He has vast experience in area related to finance, audit, management information system (MIS). After completion of B.Com from Utkal University, he started his career as an Accounts Manager in national level leading NGOs and served in developmental sector from 1998 to 2006. Since March 2006 he is associated in the industry of Micro Finance. He is also a very good trainer on financial management, Accounts & record keeping. He has a vast experience on imparting training on Financial
12
Management & capacity building of community level institutions on organizational development.
Simanchal Pattnayak Head
Operations M.A., M.S.W.
Mr. Simanchal Pattnayak has more than 23 years of experience in different activities like Livelihoods, Human Rights, Good Governance and Microfinance Operations.
He has also contributed his services in different NGO’s of Odisha. A major part of his career has been devoted towards working with rural poor’s and tribes in different district of Odisha like Kalahandi, Nuapada, Rayagada & Bolangir.
He has prepared different training material, tips for trainer on different social projects related to education, good governance, gender sanitation, human rights, Financial Literacy and SHG-Federation management.
Ramaballhab Pattnayak
Head I.T. and M.I.S.
M.Com., P.G.D.C.A.,
H.W.A.
He has more than 12 years of experience in information and technology and MIS management.
He has very rich expertise on management information system.
He worked with CARE India’s CASHE Program as Manager –MIS for 6 years prior joining Mahashakti Foundation. At Mahashakti Mr. Pattnayak is leading the IT and MIS department and managing the on line version of MIS at head office level.
Arun Kumar Pattnayak
Head of Credit department
M.B.A., Finance
Mr. Arun is associated with Mahashakti Foundation since 2008.
After completion of Master degree in Finance at Gandhi Institute of Management
13
Studies, Gunupur, he joined in Mahashakti Foundation.
He is serving as Head of Credit Department of Mahashakti.
He is a key member of fund raising team of Mahashakti.
Ankita Mohanty Admin &
Knowledge Management
M.B.A., (H.R. & Finance)
She has more than 9 years of experience in different thematic area in both government & development institutions.
She is heading Admin department of Mahashakti Foundation.
She served ACCESS-ASSIST as a Senior Project Coordinator under the policy and advocacy component of Poorest States Inclusive Growth (PSIG) Programme being implemented by SIDBI and funded by DFID, UK and played active role in sectoral initiatives i.e Code of Conduct Assessment of MFIs & SHPIs, state level lenders forum meetings, research studies, developing state specific MFI Pitch Book and setting of State Micro Finance Association. Previously on stints with IIMPS under NABARD Rural Micro Pension Programme for informal sector.
She started her career with Government of Odisha under Mission Shakti Programme as Micro Finance Expert.
Ruby Tripathy Manager Insurance
M.A., P.G.D.C.A.
She has more than 7 years of working experience in the field of management of NGOs as well as social security program.
She was associated with District Collector office, Bolangir, as a data analyst.
She has joined MSF in the year 2009.
She is associated as a manager of Mahashakti’s Social Security
14
Program.
Sagarika Mishra Manager H.R. M.S.W.
She has more than 6 years of experience on development sector.
She was associated with International and National agencies like SEEDS India, PSI and LSHTM (London School of Hygiene and Tropical Medicine) on Disaster Management and “Research study on assessing the effectiveness of improved sanitation on diarrhoea: a trial in Orissa, India.
Associated with Mahashakti as a Manager Human Resource.
She has an experience on human resource management, capacity building and ability to manage the overall office administration.
She has started her Carrier with SEEDS India as a Field Co-coordinator from 2008-2011. She also worked with PSI in research study to asses’ efficacy of Aquatabse” at Bhubaneswar and Dhenkanal Districts.
Jatindra Biswal Senior Manager Operations
M.B.A.
He has 10 years’ experience in Micro finance sector.
Associated with BASIX as manager operations for 5 years.
Currently associated with MSF as a senior manager operation, responsible for planning with H.O and G.M. for organizational business plan.
Monitoring of CGT, GRT and LAF fill-up status of groups. Provide support to finance team for cash less disbursement.
15
Highlights of Microfinance Operations
Particulars 31/Mar/2015 31/Mar/2016 31/Mar/2017 28/Feb/2018 No. of States 01 01 01 01 No. of Districts 07 08 12 12 No. of Branches 10 11 15 15 No. of Active Borrowers 8048 12570 13050 10539 No. of Active Members 9426 14824 15125 12764
No. of Total Employees 56 62 62 62
No. of Field/Credit Officers 27 30 30 30
No. of SHGs 819 1235 1260 1008
OWNED PORTFOLIO Particulars 31/Mar/2015 31/Mar/2016 31/Mar/2017 28/Feb/2018 Total loan disbursements during the year (in crore) (Owned Portfolio)
5.92 8.23 9.98 8.58
Total portfolio outstanding (in crore) (Owned Portfolio)
7.66 10.98 11.00 9.29
MANAGED / BC PORTFOLIO Particulars 31/Mar/2015 31/Mar/2016 31/Mar/2017 28/Feb/2018 Total loan disbursements during the year (in crore) (Managed/BC Portfolio)
23.00 44.95 42.62 78.43
Total portfolio outstanding (in crore) (Managed/BC Portfolio)
20.14 38.08 37.94 68.32
SMERA Comments
As on 28th Feb, 2018, the company has asset under management of Rs.77.61 crore The
microfinance operations are spread over 28 branches in 12 districts with 53,109 active
borrowers. As on March, 31, 2017, the company had asset under management of Rs. 48.94
crore (including BC of Rs. 37.94 crore and owned portfolio of Rs. 11.00 crore).Owned portfolio
has declined from the previous year.
As on 28th Feb 2018, the company remains exposed to high geographical concentration risk
with the entire portfolio outstanding in the state of Odisha. The grading is constrained on
account of high geographical concentration risk. Mahashakti’s operation is confined and
restricted to 12 districts. Further, 100 per cent of the total portfolio is concentrated in the state
of Odisha.
The company needs to improve geographical diversification of operations to mitigate political
and other risks. It would also be key grading sensitivity factor for the company to replicate its
systems, processes and sound asset quality in the newer geographies while improving portfolio
diversity.
16
RBI’s Direction Mahashakti Status Compliance 85% of total assets to be in the nature of
qualifying assets
Qualifying assets forms 84.40 % of
total assets as on Dec 2017. Not Complied
Net worth to be in excess of Rs 5 Crore
Net Owned Funds stood at Rs 4.27
crore as on 31/Mar/2017.
However compliance is not
applicable as the entity is Trust.
Not applicable
Income of borrower not to exceed Rs.
100,000 in the rural areas and Rs.
160,000 in the urban and semi-urban
areas
Mahashakti extends loans to
borrowers whose income does not
exceed Rs.100,000 in the rural
areas and Rs.160,000 in the urban
areas.
Complied
Loans size not to exceed Rs 60,000 in
first cycle and Rs 100,000 in subsequent
cycles
Mahashakti offers loan in the
range of Rs 35,000 in the first
cycle up to Rs 1,00,000 in the
subsequent cycle depending on
client repayment capacity, type of
activity etc.
Complied
Total indebtedness of the borrower not
to exceed Rs 100,000 (excl medical and
education loans)
Mahashakti conducts credit
bureau check on the loans
outstanding from other MFIs. The
company ensures the total
indebtedness of the borrower
does not exceed Rs.100, 000.
Complied
Tenure of loans not to be less than 24
months for loan amount in excess of Rs
30,000, with prepayment without
penalty
The loan tenure is not less than 24
months when the loan size is
above 30,000.
Complied
Pricing guidelines are to be followed
Loans are provided in range of
20% to 24.00% reducing balance
basis which meets the RBI criteria. Complied
Transparency in interest rates to be
maintained
Interest, Processing fees and
insurance premium charged are
duly mentioned in the loan card
provided to the client.
Complied
Not more than two MFIs lend to the
same client
Mahashakti verifies the same
through credit check from credit
bureaus.
Complied
Compliance with RBI’s Directives for MFIs
17
RBI’s Direction Mahashakti Status Compliance
Loan pricing to include processing fee
(not exceeding 1% of the loan amount)
Mahashakti is charging processing
fee of 1.00% on the disbursed loan
amount.
Complied
Collateral free loans
Mahashakti does not accept any
Collateral for extending the
credit.
Complied
MFIs shall not collect any Security
Deposit / Margin from the borrower.
Mahashakti does not collect any
security deposit / margin from the
borrower.
Complied
No late payment or prepayment
penalties
Mahashakti does not take late
payment or prepayment penalties
from the clients.
Complied
Share complete client data with at least
one Credit Information Company (CIC)
established under the CIC Regulation
Act 2005, as per the frequency of data
submission prescribed by the CIC.
Mahashakti shares its client data
with Highmark only. Complied
Aggregate amount of loans, given for
income generation, is not less than 50
per cent of the total loans given by the
MFIs.
Mahashakti provides more than
80.00 % of total loans for income
generation activities as on Dec
2017.
Complied
NBFC-MFIs shall maintain a capital
adequacy ratio consisting of Tier I and
Tier II Capital which shall not be less
than 15 percent of its aggregate risk
weighted assets.
CRAR stood at 33.83% as on
31/Mar/2017. Complied
The aggregate loan provision to be
maintained by NBFC-MFIs at any point
of time shall not be less than the higher
of a) 1% of the outstanding loan
portfolio or b)
50% of the aggregate loan
installments which are overdue for
more than 90 days and less than 180
days and 100% of the aggregate loan
installments which are overdue for 180
days or more’.
The statutory auditor has certified
the appropriate provisions have
been made
Complied
18
Operating Environment
SMERA estimates the MFI sector to grow at a CAGR of 20%-25% and is expected to touch
Rs.120000 crore by the end of FY2018.
MFIs have reported an increase of ~15% in average loan amount disbursed per account during
Q2 FY 17-18 compare to Q2 FY 16-17. SMERA believes seasoned customer profile over multiple
loan cycles have helped MFIs to increase its loan ticket size.
The fund flow to the sector has improved on account of increased confidence on MFI sector
coupled with reduction in interest rate (100-150 bps). Further large MFIs are exploring the
route of Non-convertible debentures (NCDs) and Pass through Certificates (PTCs); whereas
small –mid size MFIs have an increased access to funds from banks and financial institutions.
Support systems such as Self-Regulatory Organizations (SRO), Credit Information Bureaus
(CIB) among others have been established to ensure credit check and process adherence among
MFIs. This regulatory framework has brought more accountability and transparency within the
sector.
On the contrary, recent demonetization drive restrained MFIs disbursement and collection
process which has moderated microfinance sector growth in FY2016-17 as compared to the
previous year. Post demonetization Asset Quality has declined, however it has improve and
stood at 5.41% in Q2 FY 17-18.
Section 1: Microfinance Capacity Assessment Grading
19
Reasonable track record of microfinance operations and satisfactory industry experience of key promoters Mahashakti Foundation was established in 2004 as a trust (Registered in Odisha under
India Trust Act, 1882) in Kalahandi district of Odisha with support from FARR-CARE CASHE
Project of DFID (Govt, of UK).It was set up with the objective of providing financial inclusive
Services in underserved and unserved parts of Odisha. Mahashakti has significantly expanded
its reach and has presence in 12 Districts carrying out various social and economic projects.
Mahashakti Foundation associated with various social development projects like – Renewable
Energy - Project Janalok; - Renewable Energy Project covers around 80,000 households from M.
Rampur, Th. Rampur, Narla, and Lanjigarh Blocks of Kalahandi District in Odisha. With this
project Mahashakti aims to provide electric service in the remote areas that are currently un-
served and or having higher power cut. The project has already been completed Installing 42
Solar grids in 39 inaccessible tribal villages of Western Odisha covering 1297 HHs. Household
can avail 6-8 hours of solar lights in 2 separate rooms during evening. With the provision of
solar grids.
Targeting Ultra Poor Program mainly in Kalahandi and Rayagada district of Odisha, The main
focus of the Targeting Hard Core Poor (THP) is enabling the hardcore poor and disadvantaged
for qualitative changes in their lives through economic services.
Housing and sanitation project, with the esteemed support of Habitat for Humanity India,
Mahashakti provide both financial & technical support for house construction, repair, extension
of new houses and other related activities. House repairing loan to more than 1000 houses has
been released for the benefit of poor households in Kalahandi and Nuapada districts.
Community based health insurance programme, Mahashakti Foundation, in collaboration with
MIA and DFID has been successfully implementing the community based health insurance
programme in order to reduce the out of pocket payment of poor people towards the cost of
treatment of illness and provide better health to rural households. It has adopted a three
pronged approach to improve maternal health indicators, reduce the occurrence of malaria and
decrease household poverty due health related expenses in 3 tribal blocks of the Kalahandi
district of Odisha. A total of 5000 households have and 9600 beneficiaries have been insured till
date.
Social Security (Amm Admi Bima Yojana), Amm Admi Bima Yojana is a Social Security Scheme
for rural and landless household. The head of the family or one earning member in the family of
such a household is covered under the scheme. The premium of Rs.200/- per person per annum
is shared equally by the Central Government and the State Government. The member to be
covered should be aged between 18 and 59 years. Mahashakti foundation promotes such social
security programme in the remote location of Odisha to protect the poor people.
The above diversity of services also supplements and supports the Micro-Credit Products of
Mahashakti and also enhances the credentials and trustworthiness of relationship between
Mahashakti and Micro-Finance borrowers in a very matured way. The targeted communities
mostly includes Minority groups, Youth, Artisans, Women, Marginal farmers and many others
who are in a still very deprived and disadvantageous condition.
20
Mahashakti has seven-member on its board as on March 31, 2018 having extensive experience
in the microfinance and social development segment.
Mr. Jugal Kishore Pattnayak (Managing Director), one of the founding members of Mahashakti
Foundation. He has more than 20 years of experience in the field of Livelihood Development &
Microfinance. He served in a state level NGO since 1991 with different capacities. He worked as
the Project Officer of FARR CARE CASHE (Credit and Savings for House hold Enterprise) of
CARE (DFID Supported) for 6 years. (2000-2006).He has exposure to various MSF programs in
India and abroad. He is instrumental in setting up community based Microfinance
Organizations and Producer Organizations in remote tribal areas of KBK region of Odisha.
Mr. Santosh Kumar Mishra associated as a President with Mahashakti Foundation. He has more
than 40 years of experience in the field of rural development. Served as an ASO, Tahasildar, and
Block Development Officer in different blocks of rural Odisha. He has been associated with SHG
Bank linkage program for more than 15 years.
Ms. Rojaleen Bhuyan associated as a vice president, Development Practitioner for the last 10
years and has 5 years of experience in the field of operations in livelihood development and
micro finance.
Name Position Mr. Jugal Kishore Pattnayak Managing Director Mr. Santosh Kumar Mishra President Ms. Rojaleen Bhuyan Vice President Mr. Jogananda Behera Secretary Mr. Dibakar Maharana Assistance Secretary Sri. Prakash Chandra Sahu Treasurer Smt. Aradhana Nanda Member
Moderate Resource Profile As on March 31, 2017, Mahashakti had availed loans from 09 lenders. The company’s resource
profile continues to remain concentrated towards borrowings from NBFCs, and FI’s.
Mahashakti had availed term loan from 07 NBFC and FI’s i.e Kiva Microfunds, Milaap social
ventures Private Limited, Habitat for Humanity, Friends of Women's World Banking, Sampark
and Reliance Capital and Ketto Foundation. As on March 31, 2017, Out of the total debt
outstanding of Rs. 11.03 crore, the borrowings from NBFC’s and FI stood at Rs.9.17 crore which
is 83.14% of the total borrowings as on March 31, 2017.
Apart from above mentioned NBFCs and FI’s, the company is also dealing with, Small Industries
Development Bank of India (SIDBI), and Canara Bank. The borrowings from banks stood at
Rs.1.86 crore which is 16.86% of the total borrowings as on March 31, 2017.
The relationships with these banks, NBFCs and FI’s has helped Mahashakti in meeting its
funding requirements; however the company should increase its funding mix in order to meet
its desire growth in future. The debt availed from above mentioned NBFCs have been drawn at
an interest rate in the range between 15.00%-15.50%, whereas debt availed from banks have
been drawn at an interest rate in the range between 12.70%-13.00%.
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The cost of funds (COF) stood at 16.40% as on Mar 31, 2017, as compared to 11.91% in the previous year, due to increase in the interest and fee expense on borrowings. , the loans availed from NBFCs like Friends of Women's World Banking , Sampark and Reliance Capital carry higher interest rate and hence the company has to explore its funding base to Banks.
Moderate capitalisation and comfortable liquidity profile
Mahashakti has a moderate capitalisation marked by moderate gearing of 2.58 times as on March 31, 2017 as compared to 2.96 times in the previous year. CRAR stood at 33.83% in FY2017, as compared to 30.57% in FY2016. The CRAR has declined due to increase in the risk weighted assets and the risk weighted asset has increased mainly on account of increase in the loan portfolio.
Mahashakti has a comfortable liquidity position due to well matched maturity of assets and liabilities. The tenure of loans is about 12-24 months, whereas the incremental bank funding is typically with tenure of about 24-36 months. However regular flow of funds is critical to maintain the projected growth and the same would have a key bearing on its liquidity profile.
Sound Asset Quality
Mahashakti has a sound asset quality marked by on-time repayment rate of 99.42% as on 28th Feb, 2018. The company’s on-time repayment has improved from 99.02% in FY2016-17 to 99.42% in 28th Feb 2018.
The PAR 0-30 days stood at 0.10% as on 28th Feb, 2018 as compared to 0.20% as on 31st March, 2017. The PAR >30 days stood at 0.48% as on 28th Feb, 2018 as compared to 0.78% as on 31st March, 2017. Mahashakti has maintained sound asset quality with 99.42% on time repayment over the years. Adequate credit appraisal processes, monitoring and risk management mechanisms have supported the company to keep asset quality indicators under control
Period FY 2015 FY 2016 FY 2017 28/Feb/2018
Portfolio o/s (in crore)
Portfolio o/s (in crore)
Portfolio o/s (in crore)
Portfolio o/s (in crore)
On-time 27.81 49.06 48.46 77.16
1-30 days 0.01 0.003 0.10 0.08
31-60 days 0.00 0.002 0.05 0.01
61-90 days 0.00 0.002 0.05 0.01
91-180 days 0.00 0.001 0.16 0.03
181-360 days 0.02 0.002 0.12 0.26
> 360 days 0 0.00 0.00 0.06
Write-off 0 0.00 0.00 0.00
Total 27.84 49.07 48.94 77.61
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High Geographical Reach
Name of the State No. of
Branches No. of
Borrowers Portfolio o/s
(in crore) % of Total
Portfolio o/s
Odisha 28 53109 77.61 100%
Total 28 53109 77.61 100%
The grading is constrained on account of high geographical concentration risk. Mahashakti’s
entire portfolio is concentrated in the state of Odisha. The company needs to improve geographical diversification of operations to mitigate political
and other risks. It would also be key grading sensitivity factor for the company to replicate its systems, processes and sound asset quality in the newer geographies while improving portfolio diversity.
Operational performance in FY2017
The company has reported net profit of Rs. 66.45 lakhs on operating income of Rs.9.23 crore (including BC commission of Rs. 4.09 crore) in FY2017, as compared to net profit of Rs. 59.03 lakhs on operating income of Rs.5.76 crore ((including BC commission of Rs. 2.76 crore) in the previous year. Operating income has increased mainly on account of increase in Interest and fee revenue from microfinance loans and BC commission income, compare to the previous year.
The operational self-sufficiency (OSS) of the company has declined over the past three years.
The OSS stood at 106.77% in FY2017 as compared to 109.77% in the previous year due to
increase the financial expenses and operating expenses compare to the total operating income.
As on Feb 28, 2017, the Mahashakti has an outstanding loan portfolio of Rs.77.61 crore spread
over 28 branches of 01 state with about 53,109 borrowers.
The Company’s operating expense (including BC) stood at 13.87% as on March 31, 2017, and it
has increased over the last year due to increase in the operating expenses compare to
microfinance loan portfolio.
Moderate MIS & IT infrastructure considering the current scale of operations
Mahashakti’s management information system (MIS) and Information Technology (IT)
infrastructure is moderate for its current scale of operations. It has dedicated MIS and IT team
at Head Office to ensure smooth flow of operational data between Head Office and branches.
The current MIS system deployed in Mahashakti is ‘E-fimo’ customized software which seems
to be moderate to handle the current and projected growth. The MIS has real time tracking of
micro finance activities; head office can easily extract information once branch submitted the
details of the borrowers.
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Inherent risk prevalent in the microfinance sector
Mahashakti’s business risk profile is susceptible to regulatory and legislative risks, along with
the inherent risk exist such as unsecured nature of lending, cash handling, vulnerable customer
profile and exposure to vagaries of political situation in the area of operation.
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COCA Grading - C3 (Average Performance on Code of Conduct dimensions)
SCORES ON PARAMETERS
Code of Conduct Parameters Code % Performance
Sensitive SEN 91%
Integrity and Ethical Behavior IEB 85%
Transparency TRP 87%
Client Protection CLP 86%
Governance GOV 83%
Recruitment REC 88%
Client Education CLE 88%
Feedback & Grievance Redressal FGR 73%
Data Sharing DSR 67%
91% 85%
87%
86% 83% 88%
88%
73%
67%
SEN
IEB
TRP
CLP
GOVREC
CLE
FGR
DSR
COCA Dimension Scores
Max
Section 2: Code of Conduct Assessment
25
Mahashakti with an overall grade of “C3”, indicate Average Performance on Code of Conduct
dimensions.
80%
92%
83%
91%
Observance
Dissemination
Documentation
Approval
ADDO Scores
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The Code of Conduct report for Mahashakti foundation evaluates the company’s adherence to
various code of conduct parameters. The study examines and comments upon the common
minimum indicators such as:
Sensitive Indicators Integrity and Ethical Behaviour Transparency Client Protection Governance Recruitment Client Education Feedback and Grievance Redressal Data Sharing
SMERA believes that Mahashakti foundation exhibits average on COCA dimensions. This document
details SMERA’s approach and methodology for this study and gives observations of its assessment
team while conducting the evaluation. The Approval; Documentation; Dissemination and
Observance (ADDO) framework has been used for assessment and measuring Mahashakti’s
adherence towards ethical operational practices.
Code of Conduct Assessment Summary
27
Strengths Weaknesses
Mahashakti has approved policies,
compliant with the RBI guidelines. Board with rich experience from
development and finance background. Developed its own client protection
principles and is displayed in all the branches.
Credit policies are well established documented and communicated.
Compulsory training on products terms and conditions to client prior to every loan.
Compulsory check on over indebtedness of every borrower.
Awareness to its clients/members
pertaining to interest rate and insurance claim settlements found moderate.
Moderate Management Information System (MIS) and Information Technology (IT) considering the current scale of operations and projected growth.
Internal Audit checklist should cover more aspects like awareness regarding Reserve Bank of India (RBI) compliance and Self-Regulatory Organization (SRO) among its staff members.
Awareness among client on SRO Grievance Redressal mechanism was found to be moderate.
Awareness among the staff on RBI compliance was found to be moderate.
Mahashakti does not have a policy to provide written undertaking to the client whenever grievance is received.
Mahashakti does not take written consent from the client for third party disclosure.
Mahashakti does not provide any sanction letter and acknowledgement to its client.
Mahashakti does not have any
documented policy that when it recruits
staff from another MFI, the said staff will
not be assigned to the same area he/she
was serving at the previous employer for
a period of one year.
Strengths and weaknesses pertaining to Code of Conduct
28
HIGHER ORDER INDICATORS
Integrity and Ethical Behaviour
The MFI does not have the policy to place reports on COC compliance before the board. However the same is reviewed by management level at regular interval.
Audit findings related to grievance and field audit are presented at board level.
Board does not have any approved policy of recovering delinquent loans.
Limited policy on time frame and process for client’s complaint resolution.
Framed client protection included policies on expected staff conduct with employees.
Mahashakti does not have any documented policy that when it recruits staff from another MFI, the said staff will not be assigned to the same area he/she was serving at the previous employer for a period of one year.
In all the branches visited, the contact number and address of SRO nodal official was properly displayed.
Staff compensation and incentive is not covered under scope of Internal Audit.
Awareness among client and staff on SRO Grievance Redressal mechanism was found to be moderate.
Fixed Component compensation of staff is not impacted in event of overdues. Mahashakti, in its fair practices code provides importance for transparency in pricing and clear communication to the clients.
Sensitive Indicators
In the sample of clients during COCA on the total indebtedness of borrower was within the prescribed limit stipulated by RBI.
Interactions with clients revealed that they had not been made to pay for a service or product as a precondition for loan.
Not a single instance was found where security deposit/collateral/blank cheques/stamp papers had been obtained from a client, whose loan has been classified as a microfinance loan.
Awareness to its clients/members pertaining to interest rate and insurance claim settlements found moderate.
Mahashakti does not provide acknowledgement and sanction letters to the clients.
Mahashakti provide repayment schedule to the clients including break-up of principle and interest.
Awareness among the staff on RBI compliance was found to be moderate.
There are no adverse observations in the Auditor's report regarding accounting standards followed by the MFI.
Mahashakti shares data only with Highmark. Mahashakti does not charge any extra fees from client apart from
processing fee and insurance premium. The loans are issued to the
Significant Observations
29
clients without any collateral and no security deposit is accepted. Further no penalty is charged for overdue and pre-closure of loans. However the organization does not have a well-documented policy on pre-payments.
The MFI get an external CA agency to certify its compliance with RBI's directions in relation to margin for lending by MFIs to qualify as priority sector loans.
BUILDING BLOCKS
Transparency
Awareness among the staff on RBI guidelines was found to be moderate.
Mahashakti has documented the pricing of its loan products in its operational manual.
In the branches visited loan documents had not been maintained in local languages.
Circulars with the most recent directions are available in the visited branches.
Mahashakti, in its fair practices code provides importance for transparency in pricing and clear communication to the clients.
The loan interest rate and processing fees is mentioned on the loan passbook provided to the client.
Clients interviewed were moderately aware of the charges and price for all services availed.
Prepayment policy on loans not documented. Mahashakti does not charge any extra fees from client apart
from processing fee and insurance premium. The loans are issued to the clients without any collateral and no security deposit is accepted. Further no penalty is charged for overdue and pre-closure of loans. However the organization does not have a well-documented policy on pre-payments.
Mahashakti does not have a policy to provide sanction letters and loan agreement to the clients.
Code of conduct compliance report of Mahashakti & previous financial year annual financial statement and report is available in the public domain.
Mahashakti provide repayment schedule to the clients including break-up of principle and interest.
Client Protection
Mahashakti does not have a board-approved policy regarding client data security.
Employees are trained on aspects of appropriate behavior with the clients.
Mahashakti does not have any documented policy on client data security which forms part of its fair practice code.
Framed client protection included policies on expected staff conduct with employees.
Staffs were found to be aware of the need to have professional conduct with the clients.
Internal Audit checklist should cover more aspects like awareness regarding Reserve Bank of India (RBI) compliance
30
and Self-Regulatory Organization (SRO) among its staff members.
Backup of client’s data maintained in electronic form.
Governance
Audit findings related to grievance and field audit are presented at board level.
The MFI does not have the policy to place reports on COC compliance before the board. However the same is reviewed by management level at regular interval.
The MFI has got its accounts audited in a timely manner after the end of the most relevant financial year.
No adverse observations in the Auditor's report regarding accounting standards followed by the MFI.
Action taken audit report is available at branch level. Staff satisfaction related to compensation and incentive is not
covered under scope of Internal Audit.
Recruitment
Board has reviewed its recruitment policies at least once annually
There is documentary evidence to suggest that MFI has honored the notice period for all employees who have left it.
MFI obtains NOC or relieving letter from the previous employee. Mahashakti does not have any documented policy that when it
recruits staff from another MFI, the said staff will not be assigned to the same area he/she was serving at the previous employer for a period of one year.
Client Education
In its fair practices code provides importance for raising clients' awareness of the options, choices and responsibilities regarding financial products and services.
Mahashakti does not charge clients for the trainings provided to clients, itself or through a related party.
Awareness to its clients/members pertaining to interest rate and insurance claim settlements found moderate.
Feedback and Grievance Redressal
The Board has approved a policy for Redressal of its clients’ grievances, which requires board to be updated on the functioning of grievance Redressal mechanism.
Limited policy on time frame and process for client’s complaint resolution.
Clients were found to be moderately aware of the helpline number.
In all the branches visited, the contact number and address of SRO nodal official was properly displayed.
The company maintains a record of the action taken and complaints resolved.
Awareness among client and staff on SRO Grievance Redressal mechanism was found to be moderate.
Data Sharing
Latest operational data and FY 2018 is not available on the website of Mahashakti.
MFI has a well-defined process for sharing data with the credit bureaus.
Mahashakti shares data with highmark only. Mahashakti performs compulsory credit bureau checks for all its
31
clients.
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Microfinance Grading Methodology
A) Operational Track Record
Business Orientation and Outreach of the MFI is an important parameter to gauge the growth strategies of the MFI and to assess its strategies for development. This parameter is analysed using the following sub-parameters.
Direction & Clarity Ability to raise funds Degree of association with promoter institution Alternate avenues for funds Outreach (No. of offices, No. of clients, No. of employees, Portfolio diversification)
B) Promoters & Management Profile
The elements in this parameter helps in assessing the Promoter & management quality evaluated on the basis of the basic educational qualification, professional experience of the entrepreneur; and business attitude that is related to the motivation of carrying out the business and pursuing business strategies. This parameter is analysed using the following sub-parameters.
Past experience of the management Vision and mission of the management Profile of the Board Members Policies and Processes Transparency and corporate governance
C) Financial Performance
SMERA analyses the credit worthiness of the organization through the following financial parameters. Various financial adjustments are done to get more accurate ratios for comparison. Financial analysis helps the MFI to know its financial sustainability. This parameter is analysed using the following sub-parameters.
Capital adequacy Profitability/Sustainability ratios Productivity and efficiency ratios Gearing and Liquidity ratios
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D) Asset Quality
The loan portfolio is the most important asset for any MFI. SMERA analyses the portfolio quality of the MFIs by doing ageing analysis, sectoral analysis, product wise analysis etc. SMERA compares the portfolio management system with organizational guidelines and generally accepted best practices. This parameter is analysed using the following sub-parameters.
Ageing schedule Arrears Rate / Past Due Rate Repayment Rate Annual Loan Loss Rate
E) System & Processes
SMERA analyses the polices and processes followed by the MFIs, their ability to handle volume of financial transactions, legal issue and disputes, attrition among the employees and client drop out which impact the productivity of the organization. SMERA also analyses asset liability maturity profile of the MFI, liquidity risk and interest rate risk. This parameter is analysed using the following sub-parameters.
Operational Control Management Information System Planning & Budgeting Asset Liability Mismatch
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COCA Methodology
The Code of Conduct Assessment (COCA) tool was developed as a response to the need expressed
in a meeting of stakeholders in Indian microfinance by the Small Industries Development Bank of
India (SIDBI) and the World Bank in December 2009. The code of conduct dimensions were
identified by reviewing the various norms for ethical finance. These included RBI’s fair practices
guidelines for Non-Banking Financial Companies, industry code of conduct (Sadhan-MFIN) and
Smart Campaign’s Client Protection Principles (CPP).
In 2016, need was felt to harmonize COCA to the most recent industry code of conduct and to
standardize COCA tools of different rating/assessment agencies. This grading is based on the
harmonized COCA tool. In the harmonized COCA tool, the dimensions were classified in three
categories – highest order, higher order and building blocks. This grading is based on the
harmonized COCA tool.
Highest Order
Sensitive Indicators
Higher Order
Integrity & Ethical Behaviour
Building Blocks
Governance Client Protection, Recruitment
Transparency Feedback/Grievance Redressal
Client Education Data Sharing
Chart: COCA Indicators Framework
35
Number of indicators in each category is presented below
Higher Order Indicators Number of Indicators Integrity and Ethical Behaviour 32 Sensitive indicators 26 Building Blocks Number of Indicators Transparency 40 Client Protection 122 Governance 30 Recruitment 13 Client Education 14 Feedback & Grievance Redressal 25 Data Sharing 6 Total 250
Methodology
The Code of Conduct exercise is spread over four to eight days. The first day is spent at the head
office. The assessment team visits the branches over the next three to eight days. Depending upon
the size and the operational area of the MFI, eight to fifteen branches and between 120 and 300
clients are sampled for primary survey (except in cases where number of branches in an MFI is less
than eight).
Sampling guidelines
The following is taken as the guideline to determine the sample size for a COCA exercise.
MFI Size No. of branches to be visited
No. of borrowers to be visited
Small MFI (Less than 8 branches)
All branches 15 clients per branch covering minimum two centers.
Small / Mid-size MFI (up to 2,50,000 borrowers)
8 – 10 branches (geographically distributed)
120-150 clients (15 clients per branch covering minimum two centers).
Large MFI (>2,50,000 borrowers)
12 – 15 branches (geographically distributed)
240-300 clients (20 clients per branch covering minimum two centers).
Large MFI (>2,50,000 borrowers) and having gross loan portfolio (GLP)> Rs 500 crore
18 – 20 branches (geographically distributed)
360-400 clients (20 clients per branch covering minimum two centers).
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Code of Conduct Assessment exercise requires:
1. Discussions with key staff members and the senior management at the head office, particularly the senior operational management team as well as the human resources team. These discussions focus on key issues of the code of conduct identified above.
2. Review of policy documents and manuals at the head office. These are reviewed in order to assess the policy as well as documentation regarding important aspects of the code of conduct. The last audited financial statements will also be required.
3. Sampling of branches at the head office. The assessment team samples branches for review. The branches are chosen in across different states in case the MFI operates in more than one state. Care is exercised to include older branches as well as branches that are distant from the head office or the regional office. The sampling of the branches is performed at the head office of the MFI.
4. Discussions with the branch staff at the branch office. Discussions with branch managers and the field staff is carried out to assess their understanding of the key code of conduct principles.
5. Sampling of respondents in the selected branches. A judgmental sampling is performed on the MFI’s clients by the assessment team to draw respondents from the interest group, in order to maximize the likelihood that instances of non-adherence can be detected.
6. Interview with the clients. Information from the clients is collected ideally during the group meetings. If this is not possible, visits are made to the clients’ locations for collecting information.
7. Review of loan files at the branch office. This review focuses on loan appraisal performed before disbursing loans as well as the documents collected from the clients.
As part of this assessment, SMERA visited following branches of the MFI. The details of the
branches visited are provided below.
Sr. No. Branch State No of clients interviewed
1 Balangir - I Odisha 23
2 Dunguripali - I Odisha 18
3 Rampur Odisha 20
4 Bhawanipatna - II Odisha 17
5 Bhubaneswar Odisha 16
6 Balangir – II Odisha 18
7 Dunguripali - II Odisha 15
8 Bhawanipatna - I Odisha 21
Total 148
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Profit & Loss Account (Rs. In Thousands)
Financial Year FY 2015 FY 2016 FY 2017
Months Covered By P/L 12 12 12
Income
Financial revenue from operations 36,762 57,626 92,340
Interest and fee revenue from microfinance loans
15,123 20,483 25,291
BC Commission 8,107 27,635 40,977
Other Operating Revenue 13,532 9,508 26,072
Less: Financial expenses from operations 8,256 11,080 18,236
Interest and Fee Expense on Borrowings
7,706 10,502 18,128
Gross financial profit 28,506 46,546 74,104
Less: Provision for Loan Loss 0 455 376
Net financial profit 28,506 46,091 73,728
Less: Operating expenses 25,438 40,961 67,874
Depreciation and Amortization Expense 521 515 649
Personnel Expense 8,954 18,871 24,631
Administration Expense 16,513 22,153 42,702
Net Operating Income 3,068 5,130 5,854
Non-operating Income 587 773 791
Net income After Tax 3,655 5,903 6,645
Financial Strength Financial Statements
38
Balance Sheet (Rs in Thousands)
Date 31/Mar/2015 31/Mar/2016 31/Mar/2017
SOURCES OF FUNDS
Corpus 32,092 37,369 42,702
TOTAL EQUITY(A) 32,092 37,369 42,702
LIABILITIES
Short-Term Liabilities
Short-term borrowings 1,574 2,134 738
Commercial Loans from banks/FI for microfinance
1,574 2,134 738
Account payable &Other short-term liabilities
1,538 4,615 3,221
TOTAL SHORT TERM LIABILITIES(B) 3,112 6,749 3,959
LONG-TERM LIABILITIES
Long-term borrowings
Commercial Loans from banks/FI for microfinance
64,009 1,08,623 1,09,594
TOTAL LONG TERM LIABILITIES(C)
TOTAL OTHER LIABILITIES(D) 13,819 1,15,372 1,13,553
Provision for Standard Assets 1,962 2,197 2,201
TOTAL LIABILITIES (A+B+C+D+E +F)
1,01,175 1,54,938 1,58,456
39
APPLICATION OF FUNDS 31/Mar/2015 31/Mar/2016 31/Mar/2017
Fixed Assets
Gross Block 5,341 6,970 8,243
Less: Depreciation 514 649
Net Fixed Assets 5,341 6,456 7,594
Cash and Bank Balances 4,638 13,604 9,935
Investments in Fixed Asset 12,000 19,100 22,300
Loan Portfolio
Net Loan Portfolio(D) 76,572 1,09,863 1,10,044
Accounts Receivable and Other Assets(E)
2,624 5,915 8,583
TOTAL ASSETS (A+B+C+D+E+F) 1,01,175 1,54,938 1,58,456
40
Financial Ratios 31/Mar/2015 31/Mar/2016 31/Mar/2017
Capital Adequacy Ratio (CAR)
Capital Adequacy Ratio (%) 37.96% 30.57% 33.83%
Productivity / Efficiency Ratios
No. of Active Borrowers Per Staff Member
144 203 210
No. of Active Borrowers per field executives
298 419 435
No. members per Branch 805 1143 870
Gross Portfolio o/s per field executive (Rs in thousands)
10,295 16,355 16,315
Average Outstanding Balance Per borrower (In Rs)
34,539 34,539 34,539
Cost Per Active borrower (In Rs) 3229 3305 5209
Staff Allocation ratio 48.2% 48.4% 48.4%
Asset / Liability Management
Cost of Fund 11.75% 11.91% 16.40%
Yield on Portfolio (%) 22.67% 21.97% 23.00%
Profitability / Sustainability Ratios
Operational Self Sufficiency (%) 109.11% 109.77% 106.77%
Operating Expense Ratio (OER) (Including BC)
15.52% 10.81% 13.87%
Return on Assets (RoA) 3.03% 4.01% 3.74%
Portfolio at Risk (>30 days) 0.78% 0.01% 0.07%
Return on Equity (RoE) 9.56% 7.39% 7.31%
Debt coverage Ratios
TOL/TNW 2.09 3.09 2.66
Debt/Equity Ratio 2.04 2.96 2.58
Financial Ratios
41
About SMERA SMERA Ratings Limited is a joint initiative of Small Industries
Development Bank of India (SIDBI), Dun & Bradstreet Information
services India Private Limited (D&B) and leading public and private
sector banks in India. SMERA commenced its operations in 2005 and is
empanelled as an approved rating agency by the National Small
Industries Corporation Ltd. (NSIC) under the 'Performance & Credit
Rating Scheme for Micro & Small Enterprise’ of the Ministry of MSME,
Government of India. SMERA is registered with the securities and
Exchange Board of India (SEBI) as a Credit Rating Agency and is
accredited by Reserve Bank of India (RBI) as an External Credit
Assessment Institution (ECAI), under BASEL- II norms for undertaking
Bank Loan Ratings.
Corporate Office 102, Sumer Plaza
Marol Maroshi Road, Marol
Andheri (East)
Mumbai - 400 059
Tel: +91 22 6714 1111
E-mail: [email protected]
Website: www.smera.in Ahmedabad | Bengaluru | Chennai | Coimbatore | Hyderabad | Jaipur | Kolkata | New Delhi | Surat
