20
clro~ Ratings j~~ Profess~w~ifu9g~016_17 1. 1 """"", Mr. P K Khuman Chief Executive Officer, Chanura Microfin Manipur, Hodam Leirak Machin, Airport Road. Opposite: Tiddim Oil Pump, Imphal: 795001, Manipur Dated: Oct 28, 2016 Confidential Dear Sir, Grading of Micro Financing Institution (MFI) Pfeaserefer to our fettu dated Oct 21,2016 an the captioned subject. 1. As already advised, our Grading Committee has assigned a grading of 'MFI 3' (MFI Three) to your organization. 2. Therevised ratianafe for the grading is encfasedas an AnneKure -A to this fetter. 3. CARE'sgrading is an opinion of CAREon the relative capability of the organization to undertake micro-financing activity and does not constitute a recommendation to buy, hold or sell any financial instrument issued by the organization or to make loans/ donations/ grants to the said organization. Thanking you, Yoursfaithfully, ~;Kt?cJQI~r / (~:ik Podder) Analyst ~ncl. - As above CREDIT ANALYSIS J RESEARCHLTO. CORPORATE OFFICE: 4'"Floor, Godrej Coliseum, 50mlliya Hospital Road. Off Eastern bpress Highway. Sion (El, Mumbai 400 022. Tel.:.91.22.6754 3456; Fax;+91.22.6754 3457 Email: [email protected] I www.careratings.com C1N-L67190MH1993PLC071691 t....::)~ '-- 'to ~ '? (Utkarsh Nopany) Manager 3rd Floor, Prasad Chambers. (Shagun Mall Bldg.) lOA, Shakespeare Saranl,Kolkata 700 071 Tel: +91-33-40181600/02 Fax:+91.33.40181603

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Page 1: Revised Rationale CMM - Chanurachanura.com/wp-content/uploads/2013/03/chanura_chanura...Annexure-A Chanura Microfin Manipur MFIGradingReport Yearofincorporation 2007 legalstatus Society(registeredunderManipur

clro~Ratings j~~Profess~w~ifu9g~016_17 1.1""""",

Mr. P K KhumanChief Executive Officer,Chanura Microfin Manipur,

Hodam Leirak Machin, Airport Road.Opposite: Tiddim Oil Pump,Imphal: 795001,Manipur

Dated: Oct 28, 2016

Confidential

Dear Sir,

Grading of Micro Financing Institution (MFI)

Pfeaserefer to our fettu dated Oct 21,2016 an the captioned subject.

1. As already advised, our Grading Committee has assigned a grading of 'MFI 3' (MFI Three) to

your organization.

2. The revised ratianafe for the grading is encfased as an AnneKure -A to this fetter.

3. CARE'sgrading is an opinion of CAREon the relative capability of the organization to undertake

micro-financing activity and does not constitute a recommendation to buy, hold or sell any

financial instrument issued by the organization or to make loans/ donations/ grants to the said

organization.

Thanking you,

Yoursfaithfully,

~;Kt?cJQI~r/ (~:ik Podder)

Analyst

~ncl. - As above

CREDIT ANALYSIS J RESEARCHLTO.

CORPORATE OFFICE: 4'" Floor, Godrej Coliseum, 50mlliya Hospital Road.Off Eastern bpress Highway. Sion (El, Mumbai 400 022.Tel.:.91.22.6754 3456; Fax;+91.22.6754 3457Email: [email protected] I www.careratings.com

C1N-L67190MH1993PLC071691

t....::)~ '-- 'to ~ '?(Utkarsh Nopany)

Manager

3rd Floor, Prasad Chambers. (Shagun Mall Bldg.)lOA, Shakespeare Saranl,Kolkata 700 071

Tel: +91-33-40181600/02Fax:+91.33.40181603

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Annexure-A

Chanura Microfin Manipur

MFI Grading Report

Year of incorporation 2007legal status Society (registered under Manipur Societies Registration

Act, 1989), Society Registration Number:388/M/SR/2009 'MFI3'

Year --Of- commencement of 2007 (MFI Three)rilicrofinahce operations Fifth on anlending model Joint liability group based approach eight point-

scale with "MFIRegistered Office Hodam leirak Machin, Airport Road, Opposite: TiddimOil Pump, Imphal: 79S001 1" being the

Chairperson Ms Naorem Harimati Devi highest andCEO Mr PK Khuman "MFI S" beingNumber of states covered 11 state (Manipur) as on June 30, 2016 the lowestBranches S branches as on March 31, 2016Employees 40 employees as on March 31, 2016

CAREhas assigned grading of 'MFI 3' to Chanura Microfin Manipur (CMM). The grading is assigned

on an eight point scale with 'MFI l' being the highest and 'MFI 5' being the lowest. There is no

individual definition for each grading. CARE's MFI grading is a measure of overall performance ofthe MFI based on TOSSframework,

Credit Analysis and Research Ltd• •

October 26, 2016

2

CREDITANALYSIS & RESEARCHl TO.

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TOSS FRAMEWORK

Transparency" .. .. ;, - . """.',.; r ,'r" ':',':1 I Average.'.,' ...

0 Constituted as a society under the Manipur Societies Registration Act, 19890 Experienced executive members (Governing Body), which meets on a quarterly basis0 CMM has formed various monitoring committees like HR, audit, grievance redressals committee etc.0 Credit policies (embedded in the operational manual) are well-established, documented andcommunicated0 Transparency in the lending process and monitoring of end use of funds is adequate. The borrowers are

aware of the lending policies of the company.0 Overall disclosures are moderate0 The auditor has submitted an unqualified audit report and satisfactory feedback about the society0 Separate internal audit team is in place with 2-member audit team reporting directly to the board, Internal

audit of branches is conducted on a monthiy basis and the report is directly submitted to the auditcommittee and the governing body.

0 Information on operational and financial details available in the public domain is moderate0 CMM is a member of credit bureau - High Mark and a member of self-regulatory organization _Sa-dhan

Operational Setup•. . ' . .. I I Above Average- " 'ri , .

" --0 CMM was promoted by Mr P K Khuman of Manipur0 Long experience of governing members and senior management members. Mr P K Khuman, CEO, has

about two decades of experience in rural development through an NGO and more than one and haifdecade of experience in the micro finance sector.

0 CMM has a well-defined organisation structure with existence of separate departments and cleardemarcated roles & responsibilities

0 Well established and documented HR policies0 Senior management provides training to employees and senior management also participates in external

training program0 Adequate loan appraisal & monitoring systems0 MIS is adequate for current level of operations with satisfactory degree of computerization at branches

and head office. MIS is maintained through a software package named 'FIMO' developed by JayamSolution Pvt. Ltd, Hyderabad. Accounting is done through excel templates. However, the data is populatedmanually with no separate accounting package.

0 Adequate risk management system for tracking over-dues and collection of delinquent loans are in place0 No separate bank account is maintained for each branch. The amount collected by the branches from the

borrowers is deposited into the bank account of the HO on a regular basis (daily or on next day).0 Loan disbursements are made by the branches through cheque mode only0 Takes insurance cover for cash in transit and cash in safe from National Insurance Company. However,

currently the insurance for borrowers are absent but CMM is in the process of collaborating with aninsurance company to offer the service.

Scale of Operations,i :/,; ,~.. I I Small

0 As on June 30, 2016, CMM was operating in a single state (Manipur) only, The operations are spread across4 districts of the sate through a network of S branches

0 CMM is a small sized MFI player with a loan portfolio stood at Rs.4.44 crore as on March 31, 2016 (Rs.4.24crore as on March 31, 2015) and Rs 4.67 crore as on June 30, 2016

0 Low borrower base, co,ering 4817 active borrowers as on March 31, 2016 (4226 as on March 31, 2015)and 4774 active borrowers as on June 30, 2016

3

CREDIT ANALYSIS & RESEARCH LTO.

3rd Floor. Prasad Chambers, (Shagun Mall Bldg_).lOA, Shakespeare Sarani, Kolkata 700 071.Tel: +91.33.4018 1600/02 I Fax: +91.33-4018 1603 I Email: [email protected] I www.careratings.com

CIN-L67190MH1993PlC071691

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- .a CMM has two loan products.

SustainabilityI I Averagea Reasonable second line of leadership. Majority of senior management has adequate experience to manage

the growing scale of operationsa Moderate operating risk profiie where OSSstood at 107.92% in FY16. ROTA slightly deteriorated from

1.20% in FY15to 1.18% in FY16.a The asset quality stood at comfortable levels in the past three years. PAR>30days remained at 0.00% as on

March 31, 2016.a The CARremained low at 16.43% as on Mar 31, 2016 (15.83% as on March 31, 2015).a Has presence in the state of Manipur only. The state of Manipur has lower penetration of MFI's.a The sector faces socio-political risks, regulatory uncertainty but has huge unmet potential demand.a Industry outlook: Post the AP crisis and regulatory intervention by RBI, the microfinance sector has seen

growth in loan portfolio on account of improving funding profile, controi in operating expenses, improvingmargins and moderate leverage levels. Current focus of the microfinance sector is mainly on micro-creditwith other products stili evolving. Going forward, MFls are likely to expand their client base and reach outto more underserved areas of the country. CMM has presence in areas with low penetration of other MFls.

4

CREDITANALYSIS & RESEARCHLTO.

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GRADING RATIONALEBrief Profile of the organization

Chanura tvIi~rofin Manipur (CMM) was formed in 2007, as a society, registered under section 7(1) of

Manipur Societies Registration Act, 1989. CMM is based out of Imphal, Manipur. Since inception,

CMM has started its microfinance activities. CMM provides micro loans based on joint liability group

(JLG)model to individual members in the group. Eachgroup consists of S members and 3-8 groups

forms a center. It iends to JLGborrowers at 26% interest rate (on a reducing balance) with weekly/

fortnightly repayments. CMM offers ioans ranging from Rs.s,OOO- Rs.1S,000 depending upon the

need of the customer and past repayment record. As per the policy, it does not lend to any member

who is a member of any other Self Heip Group (SHG)or JLG.

Furthermore, it also provides "Energy Loans" to its existing borrowers for purchasing solar lighting

equipments. The loans provided are based on the mutual guarantee from other group members.

The operations of the society are spread across the four districts of Manipur (viz. Imphal East,

Imphal West, Thoubal and Bishnupur). As on June 30, 2016, the portfolio was spread across S79

villages with total outstanding loan portfolio of Rs4.67 crore against 4774 active borrowers (JLG).

Operations of CMM are managed through its network of S branches with a workforce of 40 peoples

as on June 30, 2016.

The society is promoted by Mr P K Khuman, (CEO).He has about two decades of experience in rural

development through a NGO and more than one and half decade of experience in the micro finance

sector. CMM has an eight governing body members. Each member has diverse experience in the

field of banking, microfinance and social developmental services. Moreover, it has an experienced

second line of management with professionals with experience in their respective domains including

microfinance.

TRANSPARENCY

.Governance'-

r

• CMM incorporated in April, 2007 is registered as a society registered undersection 7(1) of Manipur Societies Registration Act, 1989.

• CMM is governed by a board conSisting of 8 (eight) members including anominee (representing NEDFi).

. • The board is headed by Ms Naorem Harimati Devi, Chairman. She isassociated with CMM for about a decade and handling the entireoperations of the organization. The day to day affairs of the society ishandled by Mr P KKhuman (CEO)having more than one and half decade ofexperience in the micro finance sector.

• Majority of the governing body members have adequate experience intheir respective areas of specialization. Members meet on a quarterly basis.

• CMM has formed various monitoring committees like HR, audit, grievanceredressals committee, etc. The monitoring committee meets on a monthly

5

CREDITANALYSIS & RESEARCHLTO.

3rd Floor, Prasad Chamber5, (Shagun Mall Bldg.), 10A, Shakespeare Sarani, Kolkata 700071.Tel:+91.33-4018 1600/02 I Fax:+91.33.4018 1603 I Email:[email protected] Iwww.caleratlngs.com

CIN-L67190MH1993PLC071691

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Transparencylending process

Audit QuaIity

Internal Controls

Policies

basis to monitor the progress and discuss the financial and operationalperformance .of the organization.

in • The lending policies (including interest rate, processing fees and othercharges) are clearly communicated to the borrowers at group meetingsthrough training programs & orientations. Furthermore, the borrowers areprovided with pass books where the rules and bye laws are mentioned. Theset of rules and regulations in relation to the lending policies are alsodisplayed at the branches of the society through boards. Since, the societylends to JLGgroups, the borrowers sign a JLGagreement. CMM also runbackground checks through Credit Bureaus (mainly High Mark).

• Foliowing points are also communicated through written documents:~ Interest rate~ Processing fees

~ Loan tenure and payment schedule

• Loan utilization checks are conducted and documented. BM does a Loanutilization check 1S/20 days after disbursement.

• The auditor hasgiven an unqualified report and satisfactory feedback.

Internal Audit

CMM has a dedicated internal audit team, comprising of 2 members. Internaiaudit team is headed by Mr PYaima Singh.Branch office audit

Internal auoit is done at ali the branches of CMM on a monthly basis with well-defined audit calendar and the report is given to respective branch managersand the Board. In addition to this, surprise branch visits are conducted by thesenior management. The objective of the department is to monitor andevaluate financial asweli as operational data and borrower level processes. Theauditor has to ensure the findings should cover the documentation, adherenceto the policy with a mix of physical enquiry.

• Scope: To check client related transactions and process. To checkscompliance with the operation manual, internal controls and checks, clientintake and customer service, quality of center meeting, client participation,

effectiveness of credit discipline, joint liabilities are taking place on theground.

• Credit policies are clearly defined and documented (embedded in theoperation manual)

• Credit policies are strictly adhered to for formation of groups, fieldverification and credit appraisal.

• Credit policy communication is done verbaliy through group meetings andtraining sessionsto the group members.

• HRpolicies are clearly defined and documented.

• HR policies encompass recruitment and selection, induction and training,performance management and compensation management.

Transparency in.utilization offunds

Submits informationl book debt statements as per the requirement of thelender.

6

-CREDITANALYSIS & RESEARCHLTO.

3rd Floor, Prasad Chambers. (Shagun Mall Bldg.), lOA, Shakespeare Sarani, Kolkata 700 071.Tel: +91-33-4018 1600/02 I Fax: +91.33.4018 1603 I Email: [email protected] I www.careratlng5.com

C1N-L67190MH1993PLC071691

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OPERATIONALSETUP

• Report is submitted to banks and financial institutions on amonthly/quarterly basis as per the stipulation of the lender.

Overall disclosures • CMM is regular in submitting operationai and financial information toexternal associations and agencies like Sa-dhan, Equifax, C1Bll and HighMark Credit Bureau.

• Public domain disclosure of operational and financiai detaiis about CMM ismoderate.

Grievance redressals • CMM has a grievance redressals mechanism in place with a helplinemechanism number printed in the loan card/application form.

Management • The board is headed by Ms Naorem Harimati Devi, Chairman. The day today affairs of the society is handled by Mr P K Khuman, CEO having morethan one and half decade of experience In the microfinance sectorsupported by an experienced management team.

• CMM has eight member governing body with strong academic andmanagerial expertise in finance, microfinance and social developmentalservices.

Organizational • CMM has a well-defined organization structure. The society has been ableStructure

to engage professionais in different departments, all having considerableexperience in their area of expertise. The detail organization structure ispresented in Annexures.

• It has created separate departments with clearly demarcated roles andresponsibilities for handling different functions.

level of • CMM has decentralized operations with branches handling the fielddecentralization of verification, appraisal, collection and disbursement processes in accordancebranches with the society's operational poiicies. However, branches depend on HO

for fund allocation and formulation of policy matters.• At the branch level, the Branch Manager (BM) is supported by Field Officer,

(FO) to carry out the field level operations.• The disbursements are made at the branch level on receiving the

confirmation from HO.Second line of • Senior members have strong and diversified experience in fieids of financialleadership services, agriculture & other social developmental activities. Majority of the

senior members understand the issues involved in day-to-day functioningand are involved in strategic decision making of the organization. Thus, at

present CMM has reasonable second line of leadership. Brief profile of thesenior management is provided in Annexure.

Human resources • Total staff strength of 40 employees of which 18 are field officers as on Junemanagement 30,2016.

• Field officers are mostly graduates. The BMs are mostly post-graduates .Experience amongst the FO's varies but notable portion of the totalstrength have more than one year experience.

• Selection process includes invitation of application from interested

7

CREDITANALYSIS & RESEARCHl TO.

3rd Floor, Prasad Chambers. (Shag un Mall Bldg.), lOA, Shakespeare S.:Irani, Kolkata 700 071 ..Tel: +91-33-4018 1600 I 02 I Fax: +91-33-4018 1603 I Email: [email protected] I www.carcrattngs.com

C1N-l67190MH1993PlC071691

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candidates through internal references, word of mouth, advertisement inthe newspaper, campus recruitments etc. On receipt of applicationscreening is done by the HR manager foilowed by a written test andinterview with the senior management.

• Compulsory induction training is given to all new recruits on joining for

about 3 days at HO followed by on the job practical training at the branchlevel. Training is given to fresh employees in HO by the senior managementmembers in association with other senior people. Apart from this, periodic

training programmes are aiso conducted for staffs on a regular basis. Thesenior management members participate in external training programs,workshops and conferences.

• The compensation structure of the employees contains the followingcomponents:

1. Fixed Pay:The fixed pay includes Basicand a fixed amount as allowance.2. Variabie Pay: Variable pay includes performance incentives. (applicable for

field staff only)3. Other Expenses:The employees are provided with reimbursements of their

travel expenses as per the organization's policy.4. All the statutory empioyee benefits such as PF, gratuity, ESI,etc. are being

provided to all the employees.

• Performance appraisal is conducted once each year .

• The recruitment process is centralized at Head Office (HO) and is mainlyhandled by the HRmanager under the guidance of the senior management.

• Attrition rate was moderate at 12.S%in FY16.

No. of staff as on 31.03.2015 40. New joining in 15 -16 5Left during 15 -16 5No. of staff as on 31.03.2016 40Attrition rate (%) 12.5The human resource policies at CMM with respect to selection and qualificationare well defined. CMM projects to grow aggressively over the next few years.

Operational CMM provides micro loan based on JLGmodel. The process followed by CMM inmethodology JLGmocel is explained below:

CMM practices only JLG lending process. A well-defined process is followed bythe society for the formation of the groups & loan appraisal. CMM carries outsurvey of an area before starting operation in it. The criteria for area selection

are level of poverty, number of poor household, road accessibilities and politicalstability and safety, low or no presence of other MFls in the area. Based onsurvey reports the senior management takes the decision for opening a newbranch.

The responsibility of carrying out the survey will be on the Area Manager andthe Branch Manager. The area identified for branch set up should havepotential of serving at least 2000 clients.

Ail the Clients must belong to poor and low income household irrespective of

8

CREDITANALYSIS & RESEARCHLTD.

3rd Floor. Prasad Chambers, (Shag un Mall Bldg.), lOA, Shakespeare Sarani, Kolkata 700 071,Tel: +91-33.4018 1600 I 02 I Fax: +91-33.4018 1603 I Email: [email protected] I www.car~ra1ings.com

C1N-L67190MH1993PlC071691

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Appraisal process

caste or religions.

l'> Clients should be married women between the age group of 18 to 55years from the same locality and from different families

l'> Client must not be an employee and should be a member of JlG,engaged any income generating activity.

l'> Client can't be a member of any other SHG/JlG.

l'> Annual income of client should not be exceed RS.1,OO,OOO/-in ruralareas and RS.1,GO,OOO/-in urban areas.

l'> A member of a group is self-chosen.

A JlG is formed when FO is able to gather 5 women members. In a particulararea CMM is targeting to mobilise at least three JlG (maximum eight) to form acentre in order to reduce the cost and time factor. After a centre is formed, ameeting of the members is organized in a common place where everybody canaccess.The purpose of the meeting is effective promotion of CMM loan productand financial service. Thereafter, membership application is collected by FOsfrom interested parties and submitted to BM along with KYCdocuments.

o A Compulsory Group Training (CGT) is provided to the eligible clients priorto lending to them for a minimum period of three continuous days. In thesetraining, the JlG members are taught about the mission, vision, objectives,loan products, services offered by CMM, group liabilities, CMM's GrievanceRedressal mechanism and importance of savings. During each session, theFO records the date, time and names of all those present, in the GroupTraining Register (GTR).A physical verification (home visit for Client profile)is also scheduled during CGTwhich should be completed by the 2nd day ofCGT.

o CGTis followed by Group Recognition Test (GRTconducted by the BM. Onlywhen a group qualifies the GRTand also the members qualify the lendingcriteria, loan is provided to them.

o For every centre there is a centre leader selected by the groups of thecentre. Moreover, each group members elects a group leader to managethe operations of the group.

Appraisal process for JlG model

o As per the policy of CMM, Members who are clients of any other MFI arenot eligible to become members and must fall within the income criteria asstipulated by RBI directions for rural and urban areas. This is checkedthrough household cash flow analysis in each loan cycle. A self-declarationin this regard is also obtained from the client

o BM along with FOvisits the centre for loan assessment of each group.

o BM cross checks and confirm the information with the loan ApplicationForm (LAF), Client Profile (CP), and Client Attendance Sheet. After all theinformation is confirmed, BM starts appraisal with the format of CMM. Ifthe proposed loan amount is not feasible with their income generatingactivities, BM discussesand resizes the loan amount with the Clients.

o All loans are sanctioned by Area Manager (AM) after discussion in the credit

9

CREDITANALYSIS & RESEARCHl TO.

3rd Floor, Prasad Chambe~.ISha9un Mall Bldg.), lOA,. Shakespeare Sarani, Kolkata 700 071.Tel:+91-33.4018 1600 I 02 I Fax:+91-33-4018 1603 I Email:[email protected] I www.careratings.com

CIN-l67190MH 1993PlC071691

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Loanprocess

committee consisting of AM, 8M and FO. Cash flows of clients are checkedbefore sanction. However, there is no formal criterion for deciding loan

amount or loan tenure based on client's income surplus.

o AM cross check all the documents. If AM satisfied with the documents, S/hefurther examine the feasibility of proposed loan amount and family cashflow. If the proposed loan amount is not feasible with the family cash flowthen AM can cancel the loan sanction of the group/borrower and advice forfurther assessment.

o If AM satisfies, S/he sanctions the loan, signs in the sanction letter, advisethe 8M to issue the sanctioned letter to the client and collect theiracceptance. AM update the Loan Sanctioned and Disbursement Register(LSDR).

Disbursement process Disbursement process for JLG model:

o Once the sanctioning is completed the branch offices communicates thecentre about the sanctioning and intimates the HO for fund allocation. TheFO's prepares the necessary documents for disbursement of loan.

o Once the funds are allocated by HO, the branches communicate the centreabout the date of disbursements. On the said date, each group membersare required to be present at branch office to complete the documentationprocess and sign the loan agreement which clearly states the terms andconditions of disbursement. The loan agreement is to be signed by theborrower. Loan passbook, repayment card is also issued to the borrowers.

o The disbursements are made through cheques issued by the HO directiy tothe borrowers.

o Subsequent loans are also based on repayment capacity and credit historyof the borrower. The branches conduct loan utilization checks frequentiy byphysical visit to the borrowers. The report of the visit is prepared and sentto the HO.

o There are no cash transactions handled by the field staff duringdisbursement thereby reducing the risk of mismanagement of cash at thefield level.

collection Cash is collected at the group meeting by the FOas per demand collection sheetand the same is entered in the pass book with the borrowers.Loan collection and Overdue Monitoring process can be summarized as follows:

o Loan repayment is tracked through FIMO software by the 8M and HO. Alsodemand collection book capturing information of demand, collection, overdues and prepayments is maintained at the branch and FOlevel.

o 8M verifies the demand collection sheet generated from the FIMO softwareand issuesdemand collection sheet (via hard copy) to FOs.

• Repayment collection is done by the FO at the meeting onweekly/fortnightly/monthly basis at collection centers. FO's have thereceipt book in their custody and every time the repayment ;s collectedfrom the members, a money receipt is issued. Moreover, entry is also done

in the individual loan book maintained at group level and also in the FIMO

10

CREDITANALYSIS & RESEARCHLTO.

3rd Floor, Prasad Chambers. (Snagun Mall Bldg.), 10A. Shakespeare Sarani, Kolk"la 700 071.Tel:+91-33-4018 1600 I 02 I Fax:+91.33.4018 1603 I Email:[email protected] I www.careratlngs.com

C1N-l67190MH 1993PlC071691

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Overdue managementprocess

ManagementInformation Systems

software after coming to the branch.

• All repayments are scheduled in such a way that FO can report back to BMon or before 2:00 pm so that cash can be deposited into the nearest bankbranch.

• Cash collected is deposited to the HO bank account on the same day (or onthe next day).

• Reporting by the branches to HOafter coliection is done on daily basis.

• Credit discipline of borrowers: Attendance of borrowers is more than 90%.The meetings are conducted on n regular basis with no penalties imposed.Borrowers maintain the relevant documents provided by the MFI, i.e. loanrepayment card and receipts.

• Borrowers per loan officer and gross loan portfolio per loan officer ismoderate. No of borrowers per loan officer is 265 and gross loan portfolioper loan officer is approximately RS.0.26crore (as on June 30, 2016)

• In the initial stages of over-due, FO does the follow up and if the overdueperiod is elongated then the BM steps in to make recovery. In case of non-recovery of loan by the BM, AM and Operation Manager step in and makeefforts for recovery. No undue influence and coercion is used in the processof recovery. No late penalty charges are levied.

Overall, CMM's collection and overdue monitoring system is good.

• CMM uses FIMO software developed by Jayam Solution Pvt. ltd,Hyderabad.

• FlMO Software can generate branch wise data, consolidated data ofportfolio outstanding, portfolio quality, Staff productivity, growth trend,Clients retention report, Product wise portfolio, Client information, financialstatement and expected demand, etc. Branch level MIS is being maintainedand daily updation of data is carried out at HO wherein all updated data arecollected from branches.

• There are two primary modulesl one for branch operations and a secondmodule of Head Office consolidation.

• Primary transaction entry is done at the Branch level and after completionof the Branch data entry a full compressed backup is taken from the MISsoftware (FIMO). A copy of the full backup is then sent to Head Office MISDepartment, which restores the backup at Head Office and verify thevalidity of the backup files. At Head Office after verification a copy of thebackup is burned into a DVD in daily basis to store the media at offsitelocation. Through this process, data backup is available at three locatlons-Respective Branches, HO and Offsite location to ensure efficientfunctioningl maintenance and disaster management.

• The MIS helps tracking every client, group, center, branch, territory, region,zone and the society in its entirety.

• The MIS is used to generate various reports including:o Branch Summary

o Disbursement and Collections,

II

CREDITANALYSIS & RESEARCHLTO.

3rd Floor. Prasad Chambers. (Shagun Mall Bldg.), lOA, Shakespeare Sarani, Kolka!a 700 071"Tel: ..•.91-33-4018 1600 I 02 I Fax: +91-33-4018 1603 I Email: carc@carcratlngs,com I www.carcrattngs,com

C1N-l67190MH 1993PlC071691

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Cash managementsystems

Insurance

SCALEOFOPERATIONS

o Attendance of members

o Portfolio Summary - loan Size, Purpose, Region wise, loan Cydewise outstanding

o loan Overdue Report

o lender and Securitization Information

• All the branches are connected to the HO through internet.

• CMM lacks in robustness and integrity of its MIS system. It does not haveany separate accounting software for maintenance of its accounts.Accounting is done though excel and manual mode.

The MIS system at CMM is moderate for the current level of operations as itprovides information for the loan portfolio management both at the operationallevel and managerial levei, induding among others the breakdowns by thesector, loan-size, geographical spread and lender-wise portfolio. It also helps inmaintaining security of data and faster access to reports for day-to-daymonitoring.

• CMM has reasonable cash management systems in place at all branches.

• CMM has not opened bank accounts for each of the branches only HO bankaccount is maintained.

• Branches deposits cash in the bank accounts on the same day or next day ofcollection. CashvaultsjAlmirah is present at every branch for safe keeping ofcash.

• loan is disbursed by cheque mode only. It helps to mitigate the risk of cashmismanagement by branch level staff. Salaries of the employees andreimbursement of expenses are credited to their respective bank accounts.

• The details of transactions for the day are updated in the MIS on a dailybasis.

• CMM takes insurance for cash in transit and cash in vault (from NationalInsurance Company ltd). Currently, it does not have any insurance productfor dients. However, CMM is in the process of collaborating with aninsurance company to offer the service.

Key Factors' As on March 31, 2016 '0' "'

Client base (Number) • CMM extends loans to JlGs.• The JlG groups associated with CMM have all women members .• Number of active JlG groups as on June 30, 2016 were 955 with

4774 active borrowers.Assets under management • loan disbursed during FY16 was Rs.7.92 crore and RS.1.43 crore

during April to June 2016.• Outstanding portfolio stood at Rs.4.44 crore as on March 31, 2016and RS.4.67crore as on June 30, 2016

Geographical diversification • Presence in 4 districts covering 578 villages across the state ofManipur with 5 branches

• Concentrated presence in the state of Manipur only,Total income • Total income stood at RS.1.41crore in FY16

12

CREDITANALYSIS & RESEARCHlTD.

3rd Floor, Prasad Chambers, (Shagun Mall Bldg.), lOA, Shakespeare Sa rani. Kolkata 700 071,.Tel: +91-33-4018 1600 I 02 I Fax: +91-33-4018 1603 I Email: [email protected] I www.carerattngs.com

C1N-l67190MH 1993PlC071691

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5U5TAINABILITY

FV16

1.0j------- 1

0.1 / ,;Oll<

1.41

O,bl

041

FY150.8}a 16

0.1'>

1.13

041

O,! 1

-mt 911j

14DD 1440 j1O.11J~ 9_n iblOl 535 '. I

Ib,33 1'>,'>8 I----- -- ....

14/1 141b

t09.42 101.92;

19.16 1981~

o lb 0,03 I"

1.20 1t8 •

lJ.14 14011----,889 944 '

---- i

000 000)000 0 00

4 18

I~~~++

llll --;1--- ..8.36 I

21 '>3

FV1410.19--- --+----a I'> I

Ia 18 'I1.12-- +--

0,3bI

029

I---rI---+ ,

--- '1-'I

---- +--- ----+II

Financial PerformanceInterest on lOCln:!:>

Income from soiar lamp.s.II Other operatmg Income

Total income.._- --_. ---I h"dncldl co~t.. -- ~-----

T~rm loans~ I ;f "erg'r locm~ 001 i

~.

a IbI INet interest income 0.51 0.51 , 0.55c I o b4 ITotdi operating expense~ (Ir'lCI.deprecl~~On_J o b9 O.l~r-- ----. - ---_ .. ---t---- ._- - + -_ . - ;Total PrOVl!lolOn I Wrtte offs 0.Q1 0,01 + J, ---'. -- ---- -- - - --- + ---- - ,PAT (after defd ta.) 006, O,Ob I 001i Financial Position i [ 1

Net worth a b'> o II ,~ o 18e--. --- - - I - ;•. Total Debt 343 508 '> 19- -._--------- --- _. .. + --- 'I'~ oUbtandmg - own 344 I 425 444

-li/= .. ~0--A550~t5 unO!:,r management 3.44 4.44

I . ;

~ter~st I Avg borrowed funa~@ _• !ntere~l. spread IA'B)

Net Interest Margin IN 1M)

I Other Income/Average Total As~ets

Net 'otal Inco ;Average lotal A t

.;rotal Interest E:.arnlngA~~et5 389 i '>25 4,94==1 ,

[ Key ratios (%).. ~-- - - j

I Growth Ratios i '''8- -,,,;I Total Assets 18,b3 II loan PortfolIO ll.49 ~~~_:_. -~-;~~;f fatal Debt 1999 I

-5 lit---

Total Income 120 }4 b} ,~--. ----+- r- - tPAT II 04 i I bb Ib.44I Solvency Ratios II Overall Gearing (times) '>1I ' /13 b,bl I,..----- ------ -- -- - - -t-. ---- ---- ---- -- 1, Interest (overage {times}

. __ U5i 1.l4 1.1/.. ---;, CAR ';:. {est, mated) 18 11 ' I'> 83 Ib 43

[ Profitability & Operating Effidency Ratios (%) iInterest income/Interest earning dsseh {AJ }4,52 }[ 23 I lU! j

me sse !it.1

Operating E.xp / Average Totai Asseb-

19. ,} I1-- - - --

OperatIonal Self- SuffICiency 10908.1--t .---.

I Operatong Expense RatiO (OCR)

n~Loan ,ass prov,slon & Write offsl Avg. Toti:31Assets 0.32~--

Return on total assets (PA 1; Average fatal Assets) 1 4b, I. '>urpius; rotai Income lb '>} IIRONW 904 I

II PAR> 30 day!> ((;~) 000~ - - --- - _. --DOor-, PAR> 90 days l"'J'- ---- " ----~ ---

I I

CREDIT ANALYSIS & RESEARCH l TO.

ird ~.CI~" P•••\ ••d (" ••,,,to,,,,•., (Sh••{"j'-''' M•• ~i"~:.'oA ;r>••.k •. ,lJ •.••• ..- 'i.." ••, i{(, ••••I •• !C',I Oi1T••' ov' ~14u'8 1600/[Jl F••.••.y, i3 40'~ IbU_~ bT''',! L"""" L.•••~I••.T".q~•.'m' fIt'fl<'fI< •.••• 't'Id.I,'.,p. •••,.,

Clf'< l61190MH1993PlC071691

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Earningsprofile

CMM has registered a CAGRof about 13.8% in its outstanding Loan portfolio during FY14-FY16and

the same has increased from Rs.3.43 crore as on March 31, 2014 to RS.4.44crore as on March 31,

2016. However, due to lower disbursement of funds, y-o-y growth remained slow at4. 72% in FY16.

NIM declined from 13.17% in FY14to 10.12% in FY15owing to the averaging effect of sharp increase

In loan portfolio in H2FY15, but it further declined to 9.23% in FY16 owing to increase in interest

expenses due to high cost debt availed from a NBFC.

Operating expenses /average totai assets improved from 19.52% in FY14 to 14.36% in FY16 on the

back of increasetiscale of operation and better utilization of human resources. Provisioning & write-

off /average total assets improved from 0.32x in FY14to 0.03x in FY16due to improvement in Jsset

quality. ROTAdeclined from 1.46% in FY14to 1.18% in FY16mainly due to decline in NIM during the

same period.

The earning prafile af CMM was maderate. CMM needs ta cantral its aperatianal and

interest expenses with increasing business valumes ta maintain expenses at reasanable

levels. CMM has been able ta maintain ass level abave 100% which is a pasitive sign and an

indicatian that CMM wauld be able ta maintain its aperatians at a sustainable level in thefuture.

Asset Quality

The asset quality was comfortable in the past three years with 100% recovery rate.

Capitalization

The overall CARalso remained at moderate levei at 16.43% as on March 31, 2016.

Detail financial performance of CMM is provided in Annexure.

Operational Sustainability

Operational Sustainability . ,. ,.. .

Second line of • Majority of the senior members understand the issues involved in day to dayleadership functioning.

• Involved in strategic decisions as they have developed a good understanding ofthe microfinance sector.

• Senior members are experienced in fields like banking & financial services &other social developmental activities.

Competition • CMM is operating in the state of Manipur only. Manipur has iow penetration ofMFls. Hence CMM is facing low competition in the area.

Industry Outlook Industry Outlook&Competition Post the AP crisis and regulatory intervention by RBI, the micrafinance sector has

seen strong growth in loan portfolio an account of improving funding profile, cantrolover operating expenses, improving margins and moderate leverage levels.

14

CREDITANALYSIS & RESEARCHLTD.

3rd Floor, Prasad Chambers,lShagun Mall 8Idg.), 10A, Shakespeare Sarani, Kolkata 700 071.Tel; +91-33.4018 1600 I 02 I Fill(: +91-33-4018 1603 I Email: [email protected] I www.careratlngs.com

CIN-L67190MH 1993PLC071691

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RBIhas revised the lending norms for the MFI sector, past Andhra Pradesh (AP) crisisin 2010 and Malegam Committee Report an NBFC-MFI in 2011. The sector hasevolved with the advent of credit bureaus in the sector and subsequent control averasset quality. MFI sector saw 30+ days past due (OPO)of araund 0.33% as an March

31, 2016. As an the same date, aggregate grass loan outstanding for the sector wasRs.53,233 crare, registering 84% Y-a-Ygrawth fram Rs.28,940 crare as an March 31,2015. (Source: MFIN) Thestabilization of the regulatory regime has led to a renewedinterest fram bath domestic and foreign funds in the sector. In the recent past, thesector has witnessed strang capital inflows.

Also past upward revision in loan ticket-size (from RS.3s,000 to RS.60,000 for 1st

cycle and from Rs.sO,OOO to Rs.100,000 for subsequent cycle). household income

(from RS.60,000 to RS.100,000 for rural region and from RS.120,000 to RS.160,000 for

urban & semi-urban region) and borrowing limit for individual borrower (from Rs.

50,000 to RS.100,000) by RBI would aid in the growth of the loan portfolio of MFls as

it widens the base of borrowers and significantly increases the addressable market

size. Furthermore, resources are not seen as a major constraint given the significantcapital infusion in recent times. If MFls manage to control the asset quality of their

portfolio while adhering to new guidelines, the profitability of the sector is expected

to improve with the benefits of operating leverage. Credit view will continue tofactor In risks associated with unsecured lending, socia-political intervention,geographic concentration and operational risks related to cash based transaction.

Loan Products CMM offer two loan products as on Marcl> 31, 2016. A detail on the loan product is

provided in the Annexure. CMM provides loans to the JLG members based on theirrequirements.

Access to funds and • CMM has access to funds from the public sector banks and financial institutionsability to raise funds on the back of its satisfactory operational and repayment track record.Vision • In the coming years, CMM has plans to expand its branch network in Manipur

and commence its operation in nearby states like Assam and Tripura.Efforts to increase • CMM is expecting significant increase in its income from micro financingoutreach and coverage activities with proposed scaling up of its operations in the state of Manipur, and

Tripura. Microfinance business was in a subdued state since the last few years asthe banks have stopped lending to microfinance sector due to Occurrence ofsome chit fund activities.

15

CREDIT ANALYSIS & RESEARCH LTD.

3rd Floor, Prasad Chambers, IShagun Mall Bldg.), lOA, Shakespeare S",rani, Kolkata 700 071.Tel: +91.33.4018 1600 I 02 1 Fill(: +91.33.4018 1603 I Email: [email protected] I www.careratlngs.com

C1N-L67190MH 1993PLC071691

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ANNEXURESAnnexure 1: Past and projected Financials

(Rs Cr)

Balance 5heet

~'~~J~fr1e7aJI~&_~-p~.n:~J.ture~~t~~'~e~~~~11Ji~~~&;~~~~~~t~f~~~~{~~~~~~~Y.l'ifi:rn'~~Cl]~iircli:3!7~~K~~-WJ~ ~F.Y~4l}11(?iF,YJ.:5J?J1mii;Y.i6~~i:NJttl~;\ii9:i~!~li!g"~d;"'~:~~"",,'imi~~ij,~~(A>va'tea)~~"jf'~ "if"o"",(P- '.~"Cta)'. - ,.•11.• ' ':'l: ;».\;;, _... 0"" .',.t:~- .'.1',' .• ~ .• -.~ \ . ~,~, :" .' - ,-U .. ' ... _ ti:~;:.:t_~r;.::!:.~~.!,:oJee ~Income

Interest on loans 0.79 0.82 1.03Income from solar lamps 0.15 0.16 2.25 3.180.17

Loan processing fees 0.07 0.07 0.08 0.26 0.27Interest on FD 0.03 0.02 0.06 0.02 0.03Other income 0.08 0.06 0.08 0.04 0.05

i;,)tallncome 1.12 1.13 1.41 2.58 3.53Financial Costs

Interest expense 0.29 0.31 0.47Interest expense (Energy loan) 1.40 1.870.07 0.10 0.16

Tota' Financial Costs 0.36 0.41 0.63 1.40 1.87Net Interest Income 0.51 0.51 0.55 0.85 1.31Operating Expenses

Operating Expenses 0.67 0.62 0.67 0.89 1.09Depreciation 0.03 0.03 0.03 0.07 0.09

Total Operating Expenses 0.70 0.65 0.71 0.96 1.18Tax 0.01 0.01 0.00 0.07 0.165urplus 0.06 0.06 0.07 0.14 0.32

(Rs. Cr)'Balanclr5Iieet~~¥t~~iCtilf.lo~ ~~~~~i"~~"]i,M~i~\~t'~~4l'~~ .. _.. L.~, _ ..H:I~ .~. _ • ~, ',IJool:oL. ..'~". . ~~~_~n:~_r",~~>'!~ ., ~-'~'IS_~ ..••• U'F....>~ ~ '.,~, ".:/:0.,'

f4~i~m-~~h!3'1~igit~$~t:t~~~~F.~1~~I~FY15lt.!ilIill~FY16t:Mi."J. ~fXi,J,~lli."iF,V18]1~,..Id _ I ••. _ (~ , ..•. ~ __ ••• ~

~~~'!.1ll1;rg;~tSi:i1£w.""m.~~..1<1i\~I.ii~(l.~&~~(AuditeCl)~~~!.f~1{{~~ @!.t'(pc"n"'(I)~it:', >~~~'. ~-.'''' '~~" .~."'~~ .':.. _ ~ll;'...;::) ,. "'.;-';;.,, ~ - -, ..•..•. '. ..:"!~_., :.~..; ]ole.cte. 'Liabilities50urce of FundsTangible Networth

Capital Fund 0.65 0.71 0.78 0.93 1.25Total Tangible Networlh 0.65 0.71 0.78 0.93 1.25Debt Fund

Term loans from Bank & Fls 3.43 5.08 5.19 6.45 8.09Total Debt 3.43 5.08 5.19 6.45 8.09Total Capital Employed 4.08 5.79 5.97 7.38 9.34

Assets .

Application offundsNet fixed assets 0.13 0.34 0.34 0.35 0.35Investments 0.43 0.50 0.50 0.80 1.00Current assets

Cash & bank balances 0.03 0.51 0.01 0.02 0.02Own portfolio 3.44 4.25 4.44 6.13 8.25

Other loans & advances 0.06 0.15 0.22 0.00 0.00Other current assets 0.10 0.15 0.59 0.50 0.19

.~:

~,

16

I.3rd Floor, Prasad Chambers, {Shagun Mall'B1dg.),JOA. Shakc~peare Saranl, Kolkata 700 071.

Tel: +91.33.4018 1600 I 02 I Fax: +91-33.4018 1603 I Email: [email protected] I www.careralings.comCIN- L67190MH1993PlC071691

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ANNEXURE2: Orgamsatlonal Structure

Balance Sheet . .+ .. .•..~. <11~~~ ,,~~,~~,', -~, ,,. "t' - , , •• ;,JoLE! ."","-, , .,As,on March 31, ~,:"" ,,,,,' .~ ~FY14" (,'"''iCFvi5:'¥ I F,Y16 FY17 I .H18~. - '.' . - - .. ' ,#, .. '~_tf~'.'.~i7.: ,'(AUdited)- .- - . ,-

(Projected)Total Current Assets 3,63 5,06 5,25 6,65 8,46Current liabilities and provisions 0,10 0,11 0,11 0.42 0.46Net Current Assets 3.53 4,95 5,14 6.23 7.99Miscellaneous expenses not written off 0.00 0.00 0.(10 0.00 0.00Total Application of Funds 4.08 5.79 5.97 7.38 9.34

----------

2.1 Profile of Senior Managementh'; .• :,.. ~ .,

. Qualiflciitlon :.• f •• - ~;, '_:~ ..' t.' -.

. ,':::"T~i~fyears of experience .'Name' , . '-, .. ' ., Desigm'ticiri"; ,.. ".'<-, .1,

Mr PKKhuman Graduate, CEOMicro Credit 21 years' experience in rural development and 18Management years in micro finance

Mr Kh. Binodkumar B,Sc.llB Manager HR 3 years in Practicing law and 6 years' experience inSingh microfinanceMr M Gunindro Singh M,Sc(IT) Manager 2 years Teaching Experience & 3 years in Computer

MIS&IT applications and 6 years' experience inmicrofinance

Mr NJawan Singh M.Com Manager Finance 17 years' experie':1ce in accounting and 8 Years'experience in Microfinance

Mr PYaima Singh M,Com ManagerInternal Audit & 20 years' experience in rural development & 10

Control years in microfinance

Mr Mandakini W MBA Area Manager 8 years' experience in microfinance

17

CREDITANALYSI5 & RESEARCHl TO.

3rd Floor, Prasad Chambers, {Shagun Mall Bldg.l.l0A. Shakespeare Saran;,Kolkata 700071.Tel:+91.33.4018 1600/02 I Fax: +91.33.4018 1603 I Email:[email protected] I www.careratlngs.com

ON, l67190MH 1993PlC071691

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2.2: Details on human resources

ANNEXURE3: Operational Outreach

. FY14 FYl5 FYl6 Q1FYl7Field officers (F07LO/COI16 16 18 18Total employees40 40 40 40EmDloyee Droductiyltv

Number of borrowers Der FO300 264 268 265Amount of loan outstandin2 Der FO(Rs.crorel 0.21 0.27 0.25 0.26Number of total JlG oroUPSDer FO 163 163 147 147Branch Droductiyitv

Borrowers Der branch961 845 963 955Amount of loan outstandine Der branch (Rs.cr.l 0.69 0.85 0.89 0.93

ANNEXURE4: loan Products

Particulars . FYl4 FYl5 FY16 Q1FYl7Number of states 1 1 1 1Number of districts 4 4 4 4Number of yilla2es/wards 569 569 I 578 579Branches 5

260~ I. 5 5Number of total Joint liability Groups (JlG) 2604 2644 2647Number of active JlG 2rOUDS 960 845 963 955Number of active borrowers 4803 4226 4817 4774Disbursement - Own 7.10 7.37 7.92 1.43Principal due durin2 the vear IRs. cr.) 6.69 6.56 7.67 1.99Principal recovered durine the year (Rs.cr.) 6.69 6.56 7.67 1.99PrinciDaloverdue ( Rs.in crl 0

100~ I 0 0Recoverv rate (%I 100% 100% 100%Total outstandine loan Dortfolio (Rs.cr.) 3.43 4.24 4.44 4.67PAR>30days 0.0 0.0 0.0 0PAR>90days 0.0 0.0 0.0 0CAR(Overall I % 18.71 15.83 I 16.43 17.27

Annexure 5: Portfolio Details

~ .•... i<.- ~~ Existing Products.Product Name "',u Income GeneratiDn:loan ~ Group 'C Energy loan.Client Individual women through JlG Existing JlG MembersAge limit (yrs) 18-55 18-55loan Tenure (months) 50 Weeks up to 25 to 50 weeksloan Size (Rs.) RS.5,000to RS.15,000 Rs.480to RS.12,500

(max. RS.5,000for 1st cycle) (Cost of lighting solution).Repayment Weekly and Fortnightly Weekly and Fortnightly.Interest Rate 26% p.a. on reducing balance method 26% p.a. on reducing balance methodProcessing Fees 1% 1%

5.1. District.wise portfolio concentration

fRs.Cr)District FY13 , FYl4": .•~ ..... FYl5

Rs. % . . , Rs. %' Rs. %.Imphal West 1.62 0.47 1.94 0.46 1.97 0.44Imphal East 1.13 0.33 1.46 0.34 1.58 0.36Thoubal 0.29 0.08 0.37 0.09 0.39 0.09Bishnupur 0.41 0.12 0.48 0.11 0.49 0.11Total 3.45 4.25 4.44

18

CREDITANALYSIS & RESEARCHl TO.

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5.2 Product wise loan outstanding

IRs Cr}

5.3 Purpose wise loan outstanding

. Particulars FY13:": .c"';: , .pt14 FY15Rs '. % Rs " -."~ % Rs %' .. . ~?".,'

IGA 2.55 0.74 2.76 0.65 4.03 0.91Energy Loan 0.89 0.26 1.49 0.35 I- 0.41 0.09

3.44 4.25 I 4.44

IRs Cr}Particulars FY13 . FY14' I FY15, Rs %' 0' Rs % I Rs %

Tailoring 1.16 0.34 1.29 0.30 I 1.51 0.34Energy Loan 0.89 0.26 1.49 0.35 I 0.41 0.09Shops 0.73 0.21 0.56 0.13 I 0.29 0.07Handl?om 0.20 0.06 0.13 0.03, 0.77 0.17Trade 0.20 0.06 0.19 0.04 i 0.53 0.12Others 0.26 0.08 0.60 0.14 I 0.93 0.21Total 3.44 4.25 -r 4.44

ANNEXURE6: PORTFOLIODETAILS6.1. Loan Products

Product Name.- _.

" ExistirygProductsIncome Generation Loan Income Generation Consumption Loan., .' ,

.'Group Loan-IndividualClient Individual women Individual Individual

through JLGAge Limit (yrs) 18-55 18-55 18-55Loan Tenure (months) 12 months for loans up to up to 30 months up to 30 months

,"

Rs.15,000 and 24 months. .. for loans above Rs.-' • -,

15,000LoanSize (Rs.): Rs.5,000 to Rs.50,000 Rs.5,000 to Rs. Rs.5,000 to Rs.

z: (max. Rs.35,000 for 1st 1,00,000 (max. Rs. 1,00,000 (max. Rs.cycle) 60,000 for 1st cycle) 60,000 for 1st cycle)

Repayment Weekly and Fortnightly Weekly and Monthly Weekly and MonthlyIryterest Rate 24% p.a. on reducing 24% p.a. on reducing 24% p.a. on reducing

balance method balance method balance methodP.rocessingFees

,1% 1% 1%

ANNEXURE7: Details for top Banks/Flnanciallnstitutions (as on June 30, 2016)- . . ,1 ~ .

••...~~\:.~:.. Sanctioned; Amount

Bankersl Lende!s Nature ofloan Disbursed till InterestAmount .. date from rate (%), .

-.I; ~., ~"..~.,' r. sanction date

FWWB, India Term Loan I 8.74 8.74 15Anan\la Finance Term Loan 1/ 6.65 6.65 16Indian Grameen services Ltd Term Loan 1.10 1.10 1551DBI/Subordinated debtl Term Loan I 1.00 1.00 9NEDFi Term Loan I 3.80 3.80 12.75SBI Term Loan 1/ 0.15 0.15 9.25Total 21.82 21.82

19

CREDITANALYSIS & RESEARCHLTO.

3rd Floor, Prasad Chambers. (Shagun Mall Bldg.), lOA, Shakespeare Saran I, Kolkata 700 071.Tel: +91-33-4018 1600 I 02 I Fax: .91-33-4018 1603 I Email: [email protected] I www,careratlngs.com

C1N-l67190MH 1993PlC071691

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, Grading Symbol' ..MFll HighestMF/2+

MFI2

MFI3+MFI3

MFI4+MFI4

MFI S Lowest, There is no individual definition for each grading

DISCLAIMERCARE's microfinance (MFI) grading is a one-time assessment and the grading is not kept under periodic surveillance.CARE's analysis draws heavily from the information provided by the microfinance institution as well as informationobtained from sources believed by CAREto be accurate and reliable. However, CAREdoes not guarantee the accuracy,adequacy or completeness of any information and is not responsible for any errors or omissions or for the resultsobtained from the use of such information. It does not imply that CAREperforms an audit function to detect fraud. Incase of NGO MFls, gradings apply only to their microfinance programs.CARE'sMFI grading is not a recommendation to buy, sell or hold any financial instrument issued by the MFI or to makeloans/ donations/ grants to the MFI. It is not an assessment of the debt servicing ability of the MFI. The grading assignedby CAREcannot be used by the MFI in any form for mobilising deposits/savings/thrift from its members or general public.CARE's MFI grading also does not indicate compliance/violation of various statutory requirements. CAREshall not beliable for any losses incurred by users from any use of the microfinance grading.

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