MICRO FINANCE

(FIBA203)
NAME: NISHTHA JAIN
ENROLLMENT NO.: A14065413016
PROGRAMME: INTEGRATED B.COM
B.ED. SPECIAL EDUCATION

TOPIC - A study of financial

performance of Indian MFIs using
MIX data
 Fusion Microfinance Private Limited

Fusion Microfinance Pvt. Ltd. is recognized among India's Best

Companies to Work For 2020. Every year, Great Place to Work®
identifies India's 100 Best Companies to Work For (with
employee strength more than 500) through an objective and
rigorous workplace culture assessment process. Fusion
Microfinance Pvt. Ltd. provides such loans ranging from INR
15,000 to INR 60,000 for loan tenure of 1 year to 2 years. The
clients are from the poor section of society and undertake these
loans to start new businesses or expand existing businesses. These
loans help the families to earn more surpluses and improve the
quality of life of their families. Fusion Microfinance Pvt. Ltd. has
successfully created a Great Place to Work FOR ALL their
employees as they have excelled on the 5 dimensions that are a
hallmark of a High-Trust, High-Performance Culture™ –
Credibility, Respect, Fairness, Pride and Camaraderie. Great
Place to Work® is considered the ‘Gold Standard’ in workplace
culture assessment and recognition. As a Great Place to Work-
Certified™ organization, Fusion Microfinance Pvt. Ltd. became
eligible to be considered among 'India's Best Companies to Work
For 2020'. Fusion Microfinance Pvt. Ltd. has a supportive and
cooperative workforce. Employees get platforms to share
information and are empowered to make decisions. Growth
opportunities and benchmarked salaries motivates employees to
work and perform.
 MIX DATA OF PAST 4 YEAR
Of Fusion microfinance PVT. LTD.
Fusion 2016 INR QTR 6/30/2016 1694
Fusion 2016 INR QTR 9/30/2016 2067
Fusion 2016 INR QTR ### 2265
Fusion 2016 INR QTR 3/31/2017 2191
Fusion 2016 INR ANN 3/31/2017 2191 49
Fusion 2017 INR QTR 6/30/2017 2445
Fusion 2017 INR QTR 9/30/2017 2855
Fusion 2017 INR QTR ### 3024
Fusion 2017 INR QTR 3/31/2018 3202
Fusion 2017 INR ANN 3/31/2018 3202 60
Fusion 2018 INR QTR 6/30/2018 3465
Fusion 2018 INR QTR 9/30/2018 3898
Fusion 2018 INR QTR ### 4171
Fusion 2018 INR QTR 3/31/2019 4398
Fusion 2018 INR ANN 3/31/2019 4398 88
Fusion 2019 INR QTR 6/30/2019 4612
GROWTH OF FUSION MICROFINANCE
PRIVATE LIMITED
Fusion Microfinance Pvt Ltd, a leading NBFC-MFI in India, has
reduced its current lending rate of interest on loan disbursement for all
customers. As per the new revised rates, the existing customers can
avail the loans at a reduced rate of 23% instead of previous 24.6%
rate. The interest rate for existing customers has been reduced by 140
basis points.
In December 2018, Warburg led a Rs 520 crore funding round,
which was also its first investment in an Indian micro-financier. It
may be noted that in 2016, the company raised over Rs 162 crore as
part of its Series D equity financing round, which was led by
Creation Investments and Gawa Capital. Besides, its other investors
include development financing institution Belgian Investment
Company for Developing countries (BIO) and The Netherlands-
based global social impact investor Microcredit
Fusion Microfinance pvt Ltd.’s (FMPL) improved capitalisation
profile and loss absorption capacity following the recent primary
infusion of Rs. 300 crores (total deal size of Rs. 520 crore) by
Warburg Pincus (Creation Investments also participated in the
secondary round), its ability to consistently grow its portfolio while
diversifying geographically both at the state and the district levels and
the improved profitability in 9M FY2019. ICRA has also noted the
improvement in the asset quality with good collection efficiencies in
the portfolio originated post demonetisation with 0+ dpd and 90+ dpd
improving to 2.39% and 1.34%, respectively, as on December 31,
2018 from 30.40% and 12.14%, respectively, as on March 31, 2017.
The rating continues to factor in FMPL’s experienced management
team, good loan origination systems and processes, which have
helped the company expand its operations (total managed portfolio of
Rs. 2,359 crores as on December 31, 2018 vis-à-vis Rs. 771 crores as
on March 31, 2017), strong investor profile, diversified funding
profile, prudent capital management philosophy and adequate
liquidity profile. Going forward, the company’s ability to maintain
good asset quality and a prudent capitalisation profile, manage the
operational and political risks and improve the profitability indicators
will be important from a credit perspective.
FMPL’s portfolio grew to Rs. 2,359 crores as on December 31, 2018
from Rs. 1,556 crores as on March 31, 2018. The company started
operations in Assam, Tamil Nadu, Puducherry and Gujarat in 9M
FY2019 and was present in 18 states through 483 branches as on
December 31, 2018. ICRA notes that FMPL has diversified its
portfolio geographically with the share of the top 3 states reducing to
54% as on December 31, 2018 from 71% as on March 31, 2016. Even
at the district level, the share of the top 5 and top 10 districts
decreased to 10% and 17%, respectively, as on December 31, 2018
from 24% and 38%, respectively, as on March 31, 2016.
Improved asset quality indicators though marginal profile of
borrowers an operational risk – FMPL’s overall asset quality
indicators, though improving with 0+ dpd of 2.39% (down from
30.40% in March 2017) and 90+ dpd of 1.34% (down from 12.14% in
March 2017) as on December 31, 2018, remain exposed to risks
associated with the MFI business. The company’s ability to maintain
the asset quality in the new originations, as it diversifies
geographically, and maintain field discipline will be important from a
credit perspective.
FMPL is a Delhi-based microfinance institution, which started
operations in 2010. As on December 31, 2018, FMPL’s operations
were spread across 483 branches in 18 states. The company has a
proven track record in the microfinance segment with a managed
portfolio base of Rs. 2,359 crores as on December 31, 2018. The three
states of Bihar, Uttar Pradesh and Odisha accounted for 21%, 19%
and 15%, respectively, of the portfolio as on December 31, 2018.
Warburg Pincus acquired a significant minority stake in FMPL for Rs.
300 crores in the form of primary infusion in December 2018. The
overall deal size was Rs. 520 crores with the existing investor
Creation Investments also participating in the secondary round.