Familiarization Programme for Independent

Directors

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Corporate Identity No. L65991DL1990PLC041796
 Microfinance Through Window of Relevance

Micro-finance is defined as “financial services such as savings, insurance, fund, credit etc., provided to poor and low income clients in rural,
semi-urban or urban areas so as to help them raise their income levels, thereby improving their standard of living”.
Banks
• Institutional Reliability Assurance of
• Multi-product
• Low branch penetration timely credit
• Design constraint

MFI
Risk Increased
• Doorstep service
• No collateral Mitigation income and
• Small ticket loans only
(Insurance) saving
Illiteracy
SHGs and Co-Ops Impact of
• Closest institutions Trust Deficit MFI
• Collateral Substitutes (Formal FIs)
• Scale up constraint
• Limited credit

Moneylenders
Improved
• Convenience Literacy Empowerment
• Very high interest rates
• Attached collateral
• Exploitative
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 Demand for Micro-Credit in India

About 220 mn Households and USD 44 bn market size

NBFC-MFIs + SFBs+ Non profit MFIs
Ric = USD 10 bn, as of Mar’17
h
2  ~220 mn households in the
Mn
High Income
poor to middle income
53 Mn HHs category
 Assuming that even 50% of
the households can be
Middle Income
80 Mn HHs
financially supported
 Potential market size
Micro Finance
assuming basic lending at
Low Income Customer ~USD 400 per HH
84 Mn HHs base  An estimated market
opportunity of USD 44
Poor
56 Mn HHs
billion

Average monthly income of Households (HHs) in USD: Rich ~1,450; High Income 460; Middle Income ~200;
Low Income ~115; Poor is less than USD 55 per month
3
 Women-Centric Sustainable Development : Microfinance
Women constitute the core fabric of microfinance and are also the critical success factor

Women are often among the Financially

most vulnerable and poorest Responsible &
members of low-income More Reliable
societies

Improved High in Social

70% of the world’s poor are
Sustainability Collateral
women

Microfinance is a powerful
instrument of social change,
particularly for women
Influence
Obvious economic and social children’s Controlled
benefits to involving women in nutrition, health, Household Income
and education
microfinance programs
Work for
Women are the family nucleus, Betterment of
that is vital for societal Entire Family
improvement and progress
 Evolution of SCNL

 Reaches 2.65 mn(A) active clients and gross AUM of

 Reaches 0.17 mn active clients and
gross AUM of Rs. 1,690.76 mn as on
Mar’10
 Raised Rs. 25.08 mn from Lok Capital
in Nov’10 and Rs. 218.50 mn from
ShoreCap II in Dec’10
 Rs. 77.50 mn infused by Promoter
Group
Registers as NBFC
with the RBI
Date of inception of
Satin on October 16,
1990
1990
 Raised Rs. 2.50 bn via QIP in Rs.40,665.98 mn(A) as on Mar’17
Oct’16  Satin raises USD 10 mn from ADB – making this ADB’s first
 CARE Ratings upgraded LT Bank direct equity investment in a NBFC-MFI in India
Facilities & NCDs to A- in Oct’16
 Acquired TSL in Sep’16
 Exit of DMP in Jul'16 and Shore 2017
 Starts SHG bank linkage Capital in Aug’16
program in Rewa, MP
 Started MSME Lending in FY17 2015 2016

Receives 83% in 2014
microfinance COCA audit -
2013
 Received “Client Protection
Raised Rs. 19.42 mn Certificate” under the Smart
from Lok Capital 2011 Campaign – 2016 from M-CRIL
 Received “Best Micro Finance
2012 Company in India” from
Worldwide Achievers
2008 2010  Listing on NSE, BSE and CSE
 Raised Rs. 414.70 mn from SBI FMO (including
1996 2009 warrants)
 Rs. 378.30 mn infused by Promoter Group
 Received top MFI grading of MFI 1
1998
 Receives MIX Social
Performance Reporting
Award at Silver level
 Reaches 0.80 mn active clients and gross AUM of Rs. 10,560.55mn as
 Raised Rs. 180.50 mn from on Mar’14
 Raised floating rate long term unsecured Tier II debt in Jul’14
DMP in Feb’11
 Raised Rs. 284.37 mn of equity from NMI and USD 10 mn of debt from
World Business Capital in the form of ECB

IPO and listing on DSE, JSE
and LSE
 First private equity investment -- Raised
Rs. 48.74 mn from Lok Capital
 Started JLG Model
 Rs. 10.00 mn infused by Promoter
Group
 Reaches 0.49 million active clients and gross AUM of Rs. 5,800.26 mn as on Mar’13
 Converts to NBFC-MFI in Nov’13
 Received ‘MFI 2+’rating by CARE (second highest on an eight point scale)
 Raised Rs. 300.00 mn from DMP, Shore Capital and Micro Vest
 Rs. 110.00 mn infused by Promoter Group
 Exit of Lok Capital
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 SCNL’s Product Portfolio
SCNL’s vision is to offer a complete suite of financial services to the bottom of the pyramid

JLG based Microfinance SCNL Gross AUM % - Mar 2017

Business
Correspondent
MSME
MSME 1% 11%
Other
11% Agri /
SCNL

Allied Activities
Product Financing – Solar, 43%
Production
Water & Sanitation 5%

Business Correspondent
Subsidiary
Service/
Trade
Housing Finance - 29%
Subsidiary

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 SCNL’s Model of Microfinance

SCNL has adopted the Joint Liability Group (JLG) Model for microfinance

Group Formation
• 4-6 women come together to
form a homogeneous group
• Formed on the basis of Social
Collateral
• A Group Leader is chosen from
amongst the group members
Centre Formation
• 3-5 such Groups come together
to form a Centre
• Hence a Centre has 12-30
members
• A Centre Leader is chosen
• All members of a Centre are
jointly liable to repay on behalf
of defaulting members
Disbursement and
Repayment
• Post KYC check and Credit
Bureau check, loans are
disbursed to each of the
members belonging to a
particular Centre
• On specific repayment dates
Centre members come together
to repay the amount due

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 Field Operation Process: SCNL

1. Village Survey & 2. Open General 3. Group formation with 4. KYC collection & giving loan 5. Raising Credit
Village Selection Meeting (OGM) GL & CL acknowledgement form to members Bureau Enquiry

11. Date & time of center meeting 10. Approving Loan 8. Group Recognition Test 7. Compulsory Group 6. House visit by
is communicated to member Application (GRT) & House verification Training (CGT) CSO

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 Impact and Achievements of SCNL

Sustainable Social
Impact on Clients
Gr MFI
a
"M ding
F
CA I 1"
RE CA
BB RE
S u B+
b-D
eb
t
External
Assessment
CA
BB RE
BA B+
SE
L-I Co
m
Pa m.
I
pe
Dedicated Client Operational Effectiveness: A r
CA 2
Support : “SPARSH” --Robustness of process RE
--Experienced and professional

CARE
BBB+
NCD
field team
Self Assessment:
Dedicated Social Audit
to measure our social
performance
 Awards for SCNL

 Winner
Winner ofof “Best
“Best NBFC-MFI
NBFC-MFI Award”
Award” &
& Runner-up
Runner-up for
for  Received
Received certificate
certificate for
for being
being the
the ‘Best
‘Best Micro
Micro Finance
Finance
“CSR
“CSR Initiatives & Business Responsibility Award” in
Initiatives & Business Responsibility Award” in Company
Company inin India’
India’ from
from Worldwide
Worldwide Achievers
Achievers at
at the
the
NBFC-MFI
NBFC-MFI category
category –– CIMSME
CIMSME Banking
Banking and
and NBFC
NBFC Business
Business Leaders’
Leaders’ Summit
Summit and and Awards,
Awards, 2016
2016
Awards
Awards 2016
2016

 Received
Received “Client
“Client Protection
Protection Certificate”
Certificate” under
under the
the  Received
Received “India
“India Iconic
Iconic Name
Name in
in Microfinance”
Microfinance” Award-
Award-
Smart
Smart Campaign
Campaign –– 2016
2016 from
from M-CRIL
M-CRIL 2015
2015 from
from IIBA
IIBA

 First
First MFI
MFI to
to receive
receive funding
funding from
from Mudra
Mudra Bank
Bank

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 SCNL at a Glance

Gross Lending Portfolio (USD Mn) No. of Branches

AGR
34% C
AGR
58% C

36,168**
626 767
503
329 431
199 267
162 163 144 161
26 35 49 89 97
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17

Number of Clients (Mn) No. of Villages

AGR
36% C
AGR
48% C

2.65
1.85 33631 34173
1.19 22499
0.49 0.80 16135
0.17 0.25 0.31 8888 11945
4013 7773
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17

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 Business Trend: MFI Vs. SCNL (Contd..)
120% % YoY Growth in
Market share by Gross AUM, as of FY17 100%
103% 102% GLP
Belstar 82%
1% 80%
RGVN
Other 61%
1% 11% 60% 53%
43%
SVCL JFS 40%
2% 25%
27%
Madura 20%
2% 11%
Fusion
2% 0%
Arohan FY14 FY15 FY16 FY17
2%
Sonata All MFIs SCNL (Standalone)
2%
Annapurna
3% 70% 64% % YoY Growth in Active Clients
Spandana 60% 55%
3%
49%
Disha 50% 44%
3%
40%
Asirvad BFIL 29% 30%
4% 20% 30% 24%
22%
Muthoot Microfin 20%
4%
SCNL 10%
Grameen Koota 8%
7% 0%
FY14 FY15 FY16 FY17
NBFC-MFI Industry AUM of Rs. 46,847 Crore as of March 2017 All MFIs SCNL (Standalone)
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 Business Trend: MFI Vs. SCNL (Contd..)

Average Loan Outstanding, as of Mar 2017 (Rs.)

25,764
21,313 21,206
18,823
17,187 15,970 16,891
14,807 15,009 14,588 14,917 14,071 15,277
13,768
12,332 11,275 11,600

S IL NL a n ad a a a a n n a CL r y
JF BF ot ofi sh an rn at ha sio ur VN sta str
SC Ko r is rv D i d u
So
n o u d SV G l u
n M
ic A an na
p Ar F M
a R Be In
d
ee ot Sp An
am ho
Gr ut
M

Average Loan Disbursed, as of Mar 2017 (Rs.)

33,299
27,329
24,453 24,597 25,433 24,345
23,196 21,779
20,164 21,025 20,674 20,527 21,214
18,676 17,779
16,639
10,887

S IL NL r
JF BF ot
a
ofi
n
vad sh
a
a na rn
a
at
a
han io
n
ur
a C L
VN sta stry
SC o r i r D i d u n o Fu
s d SV RG l du
n
K ic As an nap So Ar M
a B e
In
ee M p
m oot S An
a h
Gr ut
M
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 Business Trend: MFI Vs. SCNL

Growth in business trend (Loan Accounts) in Lakhs

120% 109%
100%
80% 75%
60%
60% 49% 48%
40% 33%
23% 23% 22% 22%
20%
0%
Total (all MFIs) MFIs (glp < Rs 100 Cr.) MFIs (glp > Rs 100-500 Cr.) MFIs (glp > Rs 500 Cr.) SCNL
% change in FY 15-16 over FY 14-15 (yoy) % change in FY 16-17 over FY 15-16 (yoy)

Growth in business trend (Gross Loan Portfolio) in Rs. Crore

163%
160%
120% 113%
102% 101%
80%
53%
40% 25% 33% 24%
13% 11%
0%
Total (all MFIs) MFIs (glp < Rs 100 Cr.) MFIs (glp > Rs 100-500 Cr.) MFIs (glp > Rs 500 Cr.) SCNL
% change in FY 15-16 over FY 14-15 (yoy) % change in FY 16-17 over FY 15-16 (yoy)

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 Going Ahead!

Full scale bank

- Complete range of credit/saving/remittance & insurance service provider
Beyond 5 years - Group lending technology to be replicated through institutional development service across the world
- Synthesizing business logic through related diversification in SME space
- Preferred financial service provider

- 5 million customers
3-5 years - USD 5 billion asset
- Small bank
- Institutional lending
- Remittance services

- USD 1.8 billion assets

- BC for many banks
Current Position - SME financing
- Employer of Choice

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Thank You!!

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