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FROM THE MANAGEMENT’S DESK
manager

Seasons Greetings,

I am delighted to write to you in the month of Diwali and let me start by wishing all of you and your families a wonderful festival season and a great year ahead


The last quarter has been eventful at Arohan and I would like to take this opportunity of specifically listing down some of the key ones for your perusal:

  • As of June, 2017 outstandings, we have become the 8th largest NBFC-MFI in the country and the largest in eastern India.
  • We have continued to build on our rewarded IT platform and have become the only NBFC-MFI to operate on ‘Profile’, a state of the art core banking platform from the globally renowned FIS.
  • Our credit rating of A- got reaffirmed with a stable outlook by CARE Ratings Limited in the backdrop of industry down grades, as a result of which we still are in the elite list of 5 odd NBFC-MFI with an A credit rating.
  • As on today, we are active in 9 of the 10 LIS referred to in our strategic business plan, having launched operations in Tripura in the north-east and Uttar Pradesh in the central part of India.
  • Our inorganic business is steadily growing and today has over 6 partners across the 4 states of Bihar, Odisha, West Bengal and Uttar Pradesh with an outstanding of over INR 60 Cr.
  • In our efforts to optimize the non qualifying asset space available for an NBFC -MFI, we are in the process of merging the IntelleCash Merchant Cash Advance business into Arohan. This will help us penetrate deeper into the LIS geographies & diversify our client segments with a unique product catering to the micro and small enterprises.
  • Our management team has been further strengthened by the joining of Shirish Panda as Head of the field operations in the microfinance business, Ranjan Das as Head of Credit & Risk for a growing lending portfolio and Shailesh Kumar as Head of the Merchant Cash Advance business.

The landscape is rapidly changing – demonetization and GST implementation has had an impact on most of the lending businesses. Arohan has managed the demo impact relatively better than most entities even in our geographies. In the microfinance business, the Mutually Accepted Code of Conduct (MACC) adopted by all RBI regulated lending institutions of the sector and the 360-degree credit view as announced by the RBI are momentous steps which will build a solid foundation to this socially sensitive business.


I have no doubt that with the new Universal Banks, NBFC-MFIs, Small Finance Banks and Payment Banks getting active, the banking space in India will change beyond imagination and needless to add that the ultimate customer will benefit in the long run. As a representative of this dynamic industry, I assure you that with all the key initiatives that Arohan is working on, we will play an important role in unfolding the change in our country.

Warm RegardsManoj Kumar Nambiar, MD

GROWTH SNAPSHOT
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IN FOCUS:

Working with partners in the industry for inorganic growth

Microfinance has evolved significantly in the past decade, with the move from small localized organizations and NGO structures to larger, more organized set ups in the form of NBFCs, NBFC MFIs and now even banks. While this is overall a good move for the industry and there is a solid rationale of greater accountability and seamless adherence to norms for this move towards consolidation, there are many good smaller institutions with sound ground operations and great customer connect who sometimes find it hard to thrive in this environment. Given its vision of serving the underserved in the Low Income States of the country, Arohan saw this gap in early 2016. First approached by a very good entity in Odisha, the company realized that there are some very good entities on the ground who have a powerful customer connect due to their localized presence, and oftentimes decades of good work done for the community, both credit and credit plus, but do not have access to adequate funding.

This caused Arohan to start its inorganic channel, which essentially entails tying up with local level entities to either source customers on its behalf, or provide short term liquidity/ portfolio purchase to fund credit to microfinance customers in its strategic areas of interest i.e. the low income states of the country, especially in the East, North East and Central India. This has been an extremely successful initiative by the company, and we have worked with 10 partners, catering to over 50,000 customers across West Bengal, UP, Bihar, Jharkhand, Odisha and Assam.

This has created a win-win-win situation for all three parties. The customer has access to appropriate funding in low turnaround times from the staff she is comfortable dealing with, the local entity is able to service its customers and strengthen its relationship, while at the same time benefiting from Arohan’s mature processes, tech support in the form of paperless sourcing through tabs, ready liquidity and fee income, and Arohan benefits from spreading out in areas it otherwise may not have entered organically. We hope to continue to grow the work we are doing in this area to be able to reach out to more and more customers in the remotest areas of the low income states we operate in, while supporting good institutions with strong ground operations.

- Ms. Shraddha Srimal, Head of Strategy and Inorganic Business.

IN THE NEWS
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RATE CUT: Arohan announced revised lending rate

Arohan announced a lower lending rate of 22.35% (previous lending rate was 22.99%) for its flagship loan product, Saral, with effect from October 1, 2017. ‘Saral’ currently caters to almost 8 lakh women customers of Arohan, who are from socio-economically disadvantaged backgrounds across the Low Income States of Eastern, Central and North Eastern India. These are income generating loans which aim to enhance livelihoods.

This revision has made Arohan the second best-priced NBFC-MFI and the third best-priced microfinance lender across banks and the industry at large across the nine states that the company operates in viz. Assam, Bihar, Chattisgarh, Jharkhand, Meghalaya, Odisha, Tripura, Uttar Pradesh and West Bengal. The rate cut has been made possible due to Arohan’s robust operational processes and management control leading to retained lender confidence and lower borrowing costs. This is on the back of an A- credit rating by CARE with a stable outlook, and sufficient capitalization by existing and new investors in the entity, even in the wake of demonetization, whose benefit is being passed on to the end customer.

After Bandhan which is a universal bank and BFIL, which is much larger in size as compared to Arohan, it is a tremendous feat by the company to be able to pass on the benefit of a best-in-class rate to its customers. Arohan has always strived to provide the most effective rates to its borrowers and believes that the lower pricing will be welcomed by its customers.

News Coverage: Arohan’s announcement of the revised lending rate has drawn huge coverage from leading national, financial and regional dailies.

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Arohan goes live with ‘PROFILE’ core banking platform from FIS

On July 4, 2017, Arohan announced a significant IT System upgrade with the “go live” of ‘PROFILE’, a globally renowned core banking platform from FIS. The launch was attended by Mr Arun Diaz, Advisor Aavishkaar & Chair of the Group IT Steering Committee, Mr Manoj Kumar Nambiar, MD, Arohan, Mr Milind Nare, CFO, Arohan, Mr Arvind Murarka, AVP, IT, Arohan and Mr Sandeep Chiber, Senior Director - Sales, India & South Asia.

“It is a momentous day for Arohan, as we become the only NBFC-MFI in the country to have upgraded its core banking to Profile which is a system being used by several SFBs and universal banks. This upgrade opens doors of opportunities for the organization as it enables us to scale up and enhance our offering on products and services”, said Mr Nambiar addressing the employees on the occasion. "The project has seen a lot of hard work across functions and I am happy that we are finally going live on Profile with Arohan today. IntelleCash is already live & IntelleGrow will go live soon" said Mr. Arvind Murarka, who as head of IT, led the process.

Over the last financial year, Arohan has underlined the importance of being a technology enabled organization and has taken significant strides to incorporate an IT led infrastructure at various levels. With the front end processes been streamlined through mobility, and the back end supported by a state-of-the-art core banking system, Arohan’s operational process and IT systems now ensures the robustness required to support the company’s vision to serve over 10 million customers by 2022.

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Merchant Cash Advance Business launched in Kolkata

On July 4, 2017, IntelleCash announced the launch of its Merchant Cash Advance (MCA) business in Kolkata.
A unique product, MCA offers loans to micro and small enterprises underwritten on sales generated through credit/debit cards/online sales of the retailer and collected through swipes on the card and/or ACH facility. The business recorded its first successful disbursement in Kolkata on July 13, 2017.
MCA is currently serviced by our group company IntelleCash which Arohan intends to merge into itself during the course of this financial year.

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E-Bazaar app launched in Bengali for Customers in West Bengal

On July 26, 2016 Arohan launched the Bengali language version of its e-commerce platform ‘E-Bazaar’ for customers in West Bengal. The new language version is available for customers and can be downloaded from the Google play store. Our field employees will assist our customers in the installation of the app in their respective phones.
Enabled with the power of choice, our customers can choose a product sitting at home, in the presence of their family members and even plan future purchases based on need and convenience. The version was launched by Mr. Shirish Chandra Panda, Senior Vice President, Business and Mr. Harsh Patnaik, Senior Vice President, Central Operations.

INITIATIVES
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Arohan launches new Skill Building batches

Arohan through its Corporate Social Responsibility initiatives inaugurated the first skill training batch of Jharkhand in Ranchi and Jamshedpur on August 28 and 29, 2017. The students pursuing IT/ITES and Retail courses are unemployed youth from marginalised communities mobilised from our areas of operation. The first batch in Ranchi was inaugurated by the Honorable Mayor of Ranchi, Mrs. Asha Lakra who applauded the skill building CSR initiatives undertaken by Arohan. Representatives from RO Ranchi and NSHM were present for the launch.
Arohan and NSHM Udaan Skills Foundation also launched the first beauty and wellness batch for 25 girl students aspiring to be beauticians. The three-month NSDC certified course gives hands-on training and enables the candidate with a tool kit containing beauty products at the end of the course while also providing placement assistance. 50 more students will be enrolled in Patna in the month of August, 2017 in IT/ITES and Retail skills.
This year, Arohan targets to train 400 youths across the oldest states of its operations viz. Assam, Bihar, Jharkhand and West Bengal.

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Financial literacy empowers many

Arohan launched Pragya, a Financial Literacy initiative, in December 2016. Pragya, as the name denotes, means wisdom. Arohan, in association with Accion, has designed a financial awareness programme for its customers and piloted it across select branches in West Bengal, Odisha, Assam, and Bihar. Pragya aims to empower customers by sensitizing them about the importance of savings, insurance, banking, government schemes etc. The initiative helps uplift the socio- economic condition of underserved women.
As on September 30, 2017, Pragya, through its classroom training module of 1170 batches, has trained close to 20,850 women across West Bengal, Assam, Bihar, and Odisha. Mass Awareness Campaigns were also conducted through Nukkad Nataks and other such street shows, in the local dialect, to convey the importance of being financially literate. Over 3000 people benefited from such Mass Awareness Campaigns in Odisha.

CUSTOMER STORY
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Soma Bid - Soma, has been a customer of Arohan since the last three years. A resident of Raniganj, West Bengal, Soma had to discontinue her education after class X due to financial constraints. But that did not discourage her to pursue her dream to be financially independent. Like the saying goes, opportunities come to those who are prepared. Pursuing her interest in the beauty industry, Soma got herself enrolled in the Beauty & Wellness course which is funded by Arohan as a part of its skill building initiative. Soma is thrilled to have been blessed with a chance and now aspires to become a Beauty Therapist. “I have immense faith in Arohan”, says Soma.

Get In Touch


PTI Building, 4th Floor,
DP-9, Sector V, Salt Lake,
Kolkata 700 091

Phone: +91 33 40156000