23
EQUITAS MICRO FINANCE INDIA P LTD Equitas… the story so far… Private & Confidential Version 1 Presentation by Murali

Equitas Microfinance

Embed Size (px)

DESCRIPTION

 

Citation preview

Page 1: Equitas Microfinance

EQUITAS MICRO FINANCE INDIA P LTD

Equitas… the story so far…

Private & Confidential

Version 1 Presentation by Murali

Page 2: Equitas Microfinance

First Assignment given to me…

Private & Confidential

To develop an unique culture for the Organization.

I jotted down few points on a piece of paper

We debated and finally agreed on “Trustworthiness”

Equitas – a Latin word – translates as equitable which is being “fair and transparent”.

These words were incorporated into our mission statement.

Our mission statement not only focuses on right results but also on right reasons (our intent) and the right way (our culture)

Equitas Micro Finance India P Ltd

Page 3: Equitas Microfinance

Mission of Equitas…

Private & Confidential

(1)To improve quality of life (2)by increasing total

household asset value (3)of those who are not

effectively serviced by the formal financial sector (4)by

providing transparent and trustworthy access (5)to

financial and other relevant products and services

(6)by deploying cutting edge technology (7)and forming

partnerships and alliances

Equitas Micro Finance India P Ltd

Page 4: Equitas Microfinance

Private & Confidential

Not effectively

serviced by formal

financial sector

Increase total

household assets

value

Improve

Quality of Life

Transparent and Trustworthy access

Financial & other relevant products & services

Cutting edge technology

Partnership alliances

Mission of Equitas…

Page 5: Equitas Microfinance

Responsible Microfinance – The Equitas Model

Private & Confidential

Responsible Microfinance

Fairness & Transparency

Governance

Efficient Operations &

Risk Management

Pricing philosophy

Employee engagement

Page 6: Equitas Microfinance

Fairness & Transparency

Private & Confidential

• Clear communication

of all-inclusive

reducing balance IRR

interest rate

• Admin fee for term

life insurance cover

published in passbook

Page 7: Equitas Microfinance

Governance

Private & Confidential

Reputed board of directors

• Independent directors constitute 1/3rd of the board

• Strong governance processes

• Clause 49 of Listed companies being followed

• Corporate Governance Rating of 3 from CRISIL – 8th Corporate

Clear articulation of mission focus & product philosophy

• Minimum 25% scale ratio

• All services consumed by members to be provided on not-for-profit basis

• No credit for purchase of consumer durables

Voluntary caps on RoE & Executive Pay

• RoE capped at 25% (authored by Equitas); benchmarked against Government Banks

• Min-Max Staff pay ratio capped at 1:40

Page 8: Equitas Microfinance

Efficient Operations & Risk Management

Centralized back-office

Real-time collections monitoring

Pre-printed repayment

stickers

Automated forms

processing

Risk Management

Consistently good quality

service

Private & Confidential

Operations Philosophy

At Branches, client-facing activities only will be conducted by field

staff. All other activities will either be outsourced or centralized

No reports required from branches, if they can be generated by HO

Page 9: Equitas Microfinance

Pricing philosophy

Private & Confidential

Lending rate

linked to RoE

High Efficiency

Lowest lending

rate

Lending rate to be calculated based on steady-state operating cost; instead

of current operating cost

The cost of expansion to be borne by investors, rather than initial

customers

Even at the time of its launch in 2007, Equitas charged all-inclusive

reducing balance interest rate of 25.5% based on a steady-state target op-

ex of 7.5% rather than Equitas‟ then op-ex of 21%

Right from launch till date, Equitas‟ interest rate continues to be the

lowest among MFIs in India

Page 10: Equitas Microfinance

Equitas – Taking Responsible Microfinance to the next level

Private & Confidential

MFI

Responsible MFI

Equitas – Responsible MFI + Ecosystem of services

Page 11: Equitas Microfinance

The Equitas Ecosystem

Private & Confidential

Improving quality of members‟ lives

Skill development

•Over 100,000 trained so far

Food Security

•19 Stores running

•6% cost benefit to clients

School education

•49 Tuition Centres

•Two Schools

Healthcare

•Over quarter million families benefited

Financial commitments

5% of profits to EDIT

15% of networth for

purchase of land &

construction of building

for Gurukul

Rs 2000 per month

per branch & 1 CSR rep

for 10 branches for

health-camps

Page 12: Equitas Microfinance

MISSION – TEAM HR

Acquire, align, assess and retain ‘Trustworthy’

employees.

Private & Confidential

Page 13: Equitas Microfinance

What do we mean by Trustworthy Employees?

(Personal and Organizational)

Character

Integrity

Integrated – no gap between

intent and behavior

Maturity

Balance between courage and

consideration

Abundance Mentality

Belief that there is “enough

for everyone

Competence

Technical

Knowledge and skill to achieve

the agree-upon results

Conceptual

Ability to see the big picture, to

examine the assumptions and

shift perspectives

Interdependent

Ability to interact effectively

with others – listen,

communicate, get to third

alternatives, create win-win

agreements, and work towards

synergistic solutions

Private & Confidential

Page 14: Equitas Microfinance

Private & Confidential

Society

Lenders

Regulators

Investors

Supervisor

Customers

Trustworthy

Employees

Why do we develop „Trustworthy‟ Employees?

Loyalty

Referrals

Confidence

Productivity

Confidence

Valuation

Confidence

Lesser controls

Confidence

Rates

Goodwill

Support

Page 15: Equitas Microfinance

Engagement

Performance

Management

System

Training

Recruitment

Trustworthy

Employees

Private & Confidential

How do we develop „Trustworthy‟ Employees? Acquire

Align

Assess

Retain

Page 16: Equitas Microfinance

Private & Confidential

On Recruitment…

80% of staff come through employee referral.

Employee referral scheme has been fine-tuned to encourage quality

references.

Two levels and the HR have to clear the candidate.

Candidates are sent for field visit to help them get right perspective

about the organization and their role.

“Know Your Candidate‟s Family Well” process to improve alignment:

To understand the cultural aspects of the family.

To help family get the right perspective about the organization

and the role their family member is going to perform.

To reach out to the family in emergency situations.

Reference checks done for 100% of candidates prior to offer.

Voluntary “No poach policy” in place.

Candidates posted very close to their residence.

Page 17: Equitas Microfinance

Private & Confidential

On Training…

Focus is on “Unity & Uniformity” across all regions.

2 weeks centralized induction program for all field staff at

Regional Training Centers:

2 days Induction (common for all staff).

1 day preliminary field visit to understand the field process.

2 days of intense process training – what, why & how.

3 days of role-related field visits

2 days of certification process.

New Region Start-up Process:

Leadership team put through 2 weeks of intense training.

Additional training on recruitment, infrastructure creation

and statutory compliance.

Ongoing training

Back to Basics

Behavioral aspects

Page 18: Equitas Microfinance

Private & Confidential

On Performance Management System…

Role Descriptions & candidate profiles are in place.

Win: win agreements…

Desired results – measurable goals

Guidelines – process adherence & cultural adherence

Resources – physical, financial, people, organizational.

Accountability – frequency of review & with whom.

Consequences – rewards, recognition, etc.

Performance Review done twice a year.

Normalization done area-wise & role-wise.

Transparent method of computing Performance increments and

promotion increments.

Revision letters rolled out on 1st April 2011.

Career Enhancement Policy

Page 19: Equitas Microfinance

Private & Confidential

On Employee Engagement…

Guiding principle… “Treat your employees the way you want them to treat

your best customers”

We strive to improve “Quality of Life” of our employees…

“Quality of life” may be enhanced by addressing 4 key aspects of the

“Whole” person:

Physical – need to maintain a certain standard of living.

Mental – need to learn and grow.

Emotional – need to be loved, cared and recognized.

Spiritual – need to do meaningful work and contribute.

All our people practices are centered around these key aspects.

Page 20: Equitas Microfinance

Private & Confidential

On Employee Engagement…

People Practices Physical Mental Emotional Spiritual

Sessions to connect with Mission

Health Insurance cover for Total family

Personal Accident cover for self

Two-wheeler Loan

Emergency Loan

Festival Loan

Financial assistance for higher

education

Employee friendly Leave Policy

Buffer positions

Page 21: Equitas Microfinance

Private & Confidential

On Employee Engagement…

People Practices Physical Mental Emotional Spiritual

Succession Plan

Career Enhancement Program

Employee satisfaction surveys

Open House Sessions

Branch Award Scheme

Spot Recognition Scheme

Equitas Day out

Employee Stock Option Scheme

Monthly Communication meetings

Page 22: Equitas Microfinance

Private & Confidential

On Employee Engagement…

People Practices Physical Mental Emotional Spiritual

Regular Audio Conferences

Monthly Hotline with Group President

A day in the life of… program

Snack Allowance for field staff

Ecosystem access to all employees

Birthday celebrations

Wedding Anniversary celebrations

Grievance Redress System

Page 23: Equitas Microfinance

Private & Confidential

Thank you!!!