IDF FINANCIAL SERVICES Affordable microfinance to the underprivileged
IDF FSPL OPERATIONAL FROM 1 4 2009 IDF FINANCIAL SERVICES PVT.LTD. A Private Limited Company, incorporated under the Companies Act, 1956 as a limited liability company For profit entity Licensed by RBI to carry on financing activities Initially acquired by the Trustees of IDF
MISSION Financial Empowerment of the Economically underprivileged through good quality and sustainable financial services
VISION Reaching 20 lakh families by 2020
CORE VALUES 1. Commitment 2. Transparency 3. Innovation 4. Exceptional team work 5. Ethics in business
OBJECTIVES Build a banking model with a social face that is commercially viable for the poor These include Assist organizing the poor into Self Help Groups (SHGs) Build the capacity of Self Help Groups through Training & Non training interventions. Help organize the SHGs into clusters and Federations Facilitate Federations of SHGs to organize trainings related to Livelihood, Health & Community Development Assist SHG Federations mobilize thrift from the SHGs Assist SHG Federations to provide Credit plus services. Provide Credit to SHGs Build the capacity of SHG Federations towards participation in Governance of the Federations as well as in IDF FSPL in which the federations are the share holders.
STRATEGIC PARTNERS Indian Institute of Management Bangalore Sa-Dhan Association of Karnataka Micro Finance Institute(AKMI) Indus Knowledgeware Private Limited Microsave Intellcap EDA Rural System
idf HELPS FORMING GROUPS FUNCTIONAL, TECHNICAL & DEVELOPMENTAL ADVOCACY SUPPORT Equity SHG Feds Promoters + Staff Devpt Bankers Social Investors Loans Com Banks FIs Devpt Bankers Shareholders CAPITAL IDF FSPL NBFC, for profit DIVIDEND LOAN DIRECTLY TO SHGS SHG FED GIVE BACK PROFITS ON CAPITAL SHG FED SHG FED SHG FED SHG FED PROVIDE CAPITAL CONTRIBUTION CLUSTERS SHGs
AREA OFFICE ORGANOGRAM Regional Manager Area Manager Credit Manager- 1 Credit Manager- 2 Credit Manager- 3 Credit Manager- 4 Credit Manager 5 Credit Manager 6 Credit officers (5) COs(5) Cluster (3-4) SHGs (8-20) Credit Officers(5) COs(5) Cluster (3-4) SHGs (8-20) Credit Officers(5) COs(5) Cluster (3-4) SHGs (8-20) Credit Officers(5) COs(5) Cluster (3-4) SHGs (8-20) Credit Officers(5) COs(5) Cluster (3-4) SHGs (8-20) Credit Officers(5) COs(5) Clusters (3-4) SHGs (8-20)
SHG FEDERATIONORGANOGRAM IDF SHG FEDERATION Board of Trustees Chair Person Vice Chair Person Elected Trustee Trustee (Finance) Trustee ( Operation) Advisory Committee CEO Clusters SHGs
SHAREHOLDERS As on 31 March 2010 Name of Shareholder No. of equity shares % of shareholding Subtotal % Acquirers 500,000 32 32 IDF SHG Federation Dharwad 274,320 18 IDF SHG Federation Haveri 125,480 8 IDF SHG Federation Tumkur 353,090 23 IDF SHG Federation Gadag 49,720 3 IDF SHG Federation Belgaum 243,280 16 68 Total 1,545,890 100.00 100.00
GOVERNANCE Board of Directors Salimath VN Patil N M Srikantha Shenoy TV Kulkarni G S Smt. Tajbi Nadaf - Chairman - Managing Director - Director -Director - Director
IDF SHG Federation IDF-SHG Federation Private for profit micro trusts Based on the principle of mutuality Owned by the SHG Members Managed by SHGs and closely monitored with technical & managerial help from other entities Registered in 5 locations Belgaum, Dharwad, Gadag, Haveri and Tunkur
IDF SHG FEDERATIONS
IDF SHG FEDERATIONS Governance All SHGthrough cluster leaders constitute the General Body. IDFto appoint the Chairman Trustee IDF/ IDFFSPL provide Financial and Operational Trustees Management Two trustees elected from Leaders and to be trained for future management, under the strict standards of management.
IDF SHG FEDERATIONS Collect capital contribution from SHGsto the extent of 10% of their borrowing and upload as capital into IDF FSPL. Savings will always be utilisedfor investment in approved investments IDFFSPLprovide emergency loans to the extent of SHG savings on recommendations of IDF SHG Federations Deal with their specific set of SHGsonly and will have no transactions with other Institutions or Federations or SHGs.
IDF SHG FEDERATIONS Since owned by member-shgs and receives the entire funds of SHGs in an accounts opened with it, the laws are not violated for public deposits / savings. Is managed by Trustees and the funds are in the hands of trust. Is capable of buying equity in IDF FSPL.
IDF SHG CLUSTERS-1 8 to 20 SHGs form a cluster, for the purposes of collection of loans repayments, savings and other cash transactions, including insurance premium and fee for health services etc. Two representatives of the SHGs assemble at the pre appointed date; time and place with the Cash collected at the SHG meetings and deliver the same. The venue of meeting of cluster is in a place where the radius of travel by the SHGrepresentatives would not exceed 15 Kmsapproximately.
IDF SHG CLUSTERS-2 The cluster is an informal congregation of SHGs to and for cash delivery to the MBT / Company. The cash is collected by the Credit Officers of IDFF and moved to the Branch office of IDFF and SHG FED office for further deposit into bank account. Recommend loan applications for its quantum, tenure and other terms etc for appraisal by the Credit Manager of IDF Financial services Private Limited.
IDF SHG CLUSTERS-3 Clusters attend to defaults at the SHG level and pursue for payment Attending the problems of SHG, strengthening member groups. Auxiliary support for group formation and motivation.
IDF SHGs - 1 SHGs are enrolled in to IDF SHG Federation through Inter Se agreements. Will have account with IDF SHG Federations to which they are affiliated and will financially deal with IDF SHG Federations only. Will be controlled through a common set of business rules and regulations of the IDF SHG Federations.
IDF SHGs -2 SHGare member of Clusters and send two representatives to it Being a General Body member of Federation will elect two trustees as per the Federation bye- laws Will conduct their financial business in cluster meeting in the presence of Federation officials All accounts are maintained by Federation, but outsourced to IDF FSPL Even the collection of the due are outsourced to IDF FSPL
COMMUNITY MOBILISATION PROCESS Months 0-1 1-2 Area Survey and Potential assessment Seeding the concept of SHG 2-3 Formation of SHG Formation of Cluster 3-5 5-6 5-6 6-7 Capacity Building through Training Savings with Federations Rating of SHG Credit Linkage
TRAININGS TO SHGS SHG Concept SHG Meetings/ Savings Leadership Book Keeping Bank / MFI Linkages Vision building
LENDING PROCESS PRE APPLICATION SHG FORMATION CAPACITY BUILDING ELIGIBILTY FOR LOAN REGISTRATION SHG ASSESSMENT SHG SUBMITS APPLICATION SHG Age > 4 months Internal lending commenced Repayment 100% SHG cluster recommends loan Credit Scoring Model: Out of 100 marks SHG scoring > 60 is eligible to get loans POST APPLICATION LOAN COMMITTEE SANCTIONS LOAN LOAN DISBURSEN\MENT THROUGH CHEQUE Loan sanctioned depending on appraisal MONTHLY RECOVERY FROM CREDIT OFFICER
LOAN PRODUCT -RETAIL Loan Terms Products I Cycle II Cycle III Cycle Max Loan Amount in Rs 100000 2,50,000 4,50,000 Repayment Period in months 12 24 36 Rate of interest in %* 15 15 15 Service Charge % upfront 2.25 2.25 2.25 Penalty Rs 25.00 for I visit Rs 50-100 per II second visit In Bangalore ROI is 19%
LOAN PRODUCT BULK Loan Terms Max Loan Amount in Rs 25,00,000 Repayment Period in months 12-24 Rate of interest in % 14 Service Charge in % of sanctioned amount Up front Overdue interest in % 2 2
LOAN PRODUCT- EMERGENCY LOAN
GEOGRAPHICAL SPREAD Dharwad, Haveri, Gadag, Belgaum, Koppal,Chitradurga Tumkur, and Bangalore urban districts. The RegedOffice at Bengaluru and Adm office at Dharwad. It will cover both Urban and Rural area at the ratio of 60:40
Districtwise SHGs and members as on 31 March 2010 District SHGs (Nos) Dharwad 3222 Bangalore 425 Belagam 3509 Haveri 1984 Gadag 710 Tumkur 3693 Chitradurga 1239 Koppal 102 Ballary 237 Davangere 83 Total 15204 Koppal; 1% Ballary; 2% Chitradurga; 8% Gadag; 5% Tumkur; 24% Haveri; 13% Davangere; 0% Dharwad; 21% Belagam; 23% Bangalore; 3%
Districtwise Loan Davanagere 1% Bellary 0% Gadag 3% Koppal 1% outstanding As on 31 March 2010 Bangalore 2% Chitradurga 7% Haveri 9% Belgaum 26% Tumkur 29% Dharwad 22%
Productwise Loan outstanding As on 31 March 2010 III Cycle 0.81% IV Cycle 0.06% II Cycle 62.01% NGO 0.64% I Cycle 36.21% Emergency 0.27%
7853.38 8000 Lakh Rs 7000 6000 5000 4000 3000 2000 1000 246.85 Am. Disbursed Am. Outstanding 1000.25 781.07 180.84 4682.2 3591.16 5008.61 0 2007 March 2008 March 2009 March 2010 March
Current Balance Sheet (1 of 2) Account FY FY FY FY ( Amt in Lakh Rs) 06-07 07-08 08-09 9-10 Cash and Bank Current Account 1.06 21.54 422.42 328.91 Short term Investments in market instruments 0 0 0.99 2.50 Outstanding loan Portfolio 180.85 780.95 3591.16 5819.53 Loan loss reserves -0.07-3.87-33.52-57.83 Net loan outstanding portfolio (3-4) 180.78 777.08 3557.64 5761.70 Other current assets 0 0 0 48.58 Total current assets (1+2+5+6) 181.84 798.62 3981.05 6141.69 Long-term investments 5.00 10.51 85.15 0 Gross fixed assets (at the beginning of FY+ additions - Deduction) 0 7.44 387.97 394.68 Depreciation 0-2.35-7.18-99.97 Net fixed asset (9-10) 0 5.09 380.79 294.71 Total long-term assets (8+11) 5 15.6 465.94 294.71 Total assets (7+12) 186.84 814.22 4446.99 6436.40
Current Balance Sheet (2 of 2) Liabilities FY FY FY FY 06-07 07-08 08-09 09-10 Long term loan outstanding (commercial rate) 168.45 761.15 3648.22 4799.62 Long term loan outstanding (concessional/ 17.88 6.64 26.46 0 subsidized rate) Other long term liabilities (pl. specify) 0 0 343.88 90.86 Total liabilities (14+15+16) 186.33 767.79 4018.56 4890.48 Equity Prior years retained earnings (losses) not Incl. cash -2.64 0.51 11.98 0.06 donations Current years retained earnings 3.15 11.48 15.52 48.53 Other capital accounts (16-17 of income statements) 0.5 0 0 0 Total equity (18 to 23) 0.5 46.43 428.43 1545.92 Total Liabilities & equity (17+24) 186.83 814.22 4446.99 6436.40 Average Portfolio 100.64 480.90 2186.06 4705.35 Return on equity % 0.52 2.39 0.71 1.29
Portfolio related data as on 31 March Description Mar-07 Mar-08 Mar-09 Mar-10 Value of loans disbursed during period 5863000 15279000 468221000 785337650 Number of loans disbursed during period 107 244 6677 8977 Number of active borrowers (end of period) 9064 28618 82308 168188 Avg. number of active borrowers 8741 26210 74645 151380 Value of loan outstanding (end of period) 18084824 78095361 359115668 581948500 Avg. outstanding balance of loans 15985744 73702122 200201315 473983507 Value of payments in arrears (end of period) 23868 167155 1319923 11461383 Value of outstanding balance of loans in arrears (end of period) 60523 373284 6375978 48202193 Value of loans written off during period 0 0 0 0 Avg. loans size 54794 62619 63624 90962 Avg. loans term (months) 12 12 to 36 12 to 36 12 to 36 Avg. number of loans officers during period 5 5 36 60 Value of re-scheduled loans outstanding 0 0 0 0 Value of re-financed loans outstanding 0 0 0 0 Value of loan outstanding for which repayment is yet to begin 5863000 15279000 80697500 113454500
Ratios as on 31 March 2010 Actuals Projected FY FY FY FY FY FY FY FY FY Ratios in % 06-07 07-08 08-09 09-10 10-11 11-12 12-13 12-14 12-15 Operating Cost Ratio 7.00 5.08 6.45 4.76 7.66 6.00 4.83 3.60 3.03 Total Cost Ratio 14.67 15.07 15.57 14.24 13.08 12.26 11.45 9.71 8.08 Operating Self 129.06 107.00 104.04 110.00 149.24 162.09 184.68 212.25 265.23 Sufficiency Financial Self Sufficiency NA NA 98.98 108.00 100.38 115.59 131.82 131.79 141.61 Yield on Portfolio 18.93 16.93 17.49 19.30 19.00 19.00 21.00 20.00 20.00 Return on Assets % Return on Equity % 0.49 2.29 0.59 1.69 0.07 2.63 4.96 4.80 5.96 52.00 12.22 1.63 1.29 0.18 5.15 8.85 8.02 8.53
Ageing Analysis of Outstanding Loans as on 31 March 2010 Type of Loans Value of Loans (IV) as a % of Total Loan Out Standing Regular Loans 533746307 91.72% Less than 30 days past due 28788114 4.95% Between 31-60 days past due 7269035 1.25% Between 60-90 days past due 3212716 0.55% Between 91-180 days past due 5995377 1.03% Between 181-365 days past due 2713236 0.05% >365 days past due 223715 0.01% Total 581948500 100%
Projected Balance Sheet Amount in Million Indian Rupees FY10/11 FY11/12 FY12/13 FY13/14 FY14/15 ASSETS * Cash in Bank and Near Cash 1.7 2.1 3.6 4,1 6,2 Net Portfolio Outstanding 1,271.0 1,766.7 3,029.2 3,991.2 5,803.5 Other current ass 6.2 6.2 6.2 6.2 6.2 Net Fixed Assets 3.4 3.6 3.6 4.3 3.6 Other LT assets 20.8 15.0 8.4 11.4 13.4 TOTAL ASSETS 1,303.3 1,793.7 3,051.2 4,017.3 5,833.2 LIABILITIES * Short-term Commercial Loans 633.8 776.5 1,421.4 1,388.7 1,725.3 Other Current Liabilities 9.0 9.0 9.0 9.0 9.0 Long-term Commercial Loans 95.9 22.6 5.0 1 1 TOTAL LIABILITIES 738.7 808.1 1,435.4 1,397.7 1,734.3 EQUITY * Shareholder equity 526.5 850.0 1,273.9 1,919.8 2,815.6 Accumulated net surplus 31.9 97.6 206.2 357.9 583.5 TOTAL EQUITY 564.5 985.6 1,615.7 2,619.5 4,098.9 TOTAL LIABILITIES AND EQUITY 1,303.3 1,793.7 3,051.2 4,017.3 5,833.2
Projected Income and Expenditure Statement Amount in Million Indian Rupees Income Statement FY10/11 FY11/12 FY12/13 FY13/14 FY14/15 Financial Income 176.9 304.9 483.3 711.0 979.5 Financial Expense 63.8 97.0 131.7 184.7 188.3 Net Financial Income 113.1 207.9 351.6 526.2 791.1 Provision for loan losses 7.7 11.3 21.2 25.1 38.0 Net Financial Margin 105.3 196.5 330.3 501.1 753.0 Program Operating Exp 44.6 64.3 81.3 102.1 117.8 Administrative Operating Exp 35.0 52.2 65.9 83.6 97.2 Net Operating Income 33.6 101.1 213.9 370.2 603.8 Net Non-Operating Income/(Exp) 0 0 0 0 0 Net Income (before taxes) 33.6 101.1 213.9 370.2 603.8 Amount of taxes paid 1.7 3.5 7.7 12.2 20.3 Net income (after taxes) 31.9 97.6 206.25 357.9 583.5