Arohan Annual Report FY 20-21

Message from the Chairperson, Board of Directors, Arohan Dear Friends and Shareholders, Financial Year 2021 has been an extraordinary year for more reasons than one. As the world undergoes an unprecedented shift post the COVID-19 onslaught, economy across the Globe and in India contracted by 3.5% and 7.3% respectively, per World Bank estimates. At such a time, when people’s earning and spending capabilities have been compromised, the need and purpose for serving the financially underserved in India becomes even more important and relevant. I am confident in telling you that your Company, Arohan, is well placed to deliver in such a dynamic environment. Startingwith themandated lockdown at the onset of the pandemic in March 2020, environmental extremities like floods in Bihar and Assam, cyclones in West Bengal and Odisha, and political upheavals in some geographies – India’s national and regional economies faced headwinds during the financial year, impacting the livelihood of millions in India, essentially bringing down the underserved to ground zero. Amidst a very challenging macro-environment, the Indian microfinance industry with its operations in the most financially excluded states in the country continued to demonstrate exceptional resilience as a key financial inclusion engine in India. The Government of India and the Central Bank, too, made notable efforts by extending timely support to the sector and its customers, including the rolling out of moratorium to non-NPA customers from March 2020 to August 2020; 2% interest subvention to eligible loans given under the Mudra-Shishu scheme, PMSVANidhi loans of up to INR 50,000 for a tenure of at least one year for street vendors with initial working capital loans of up to INR 10,000. It is also commendable how the industry, represented by its Self-Regulatory Organisations, Microfinance Institutions Network (MFIN) and Sa-Dhan continued to uphold the importance of adherence to the Code for Responsible Lending (CRL), which has since gotten acceptance from over 100 entities across lending institutions in India. As for your Company, I am pleased to note and state that Arohan’s proactive response to the country-wide lockdown and the various external Annual Report | 2020-2021 2