Arohan Annual Report FY 20-21

Message from the Managing Director, Arohan Dear Shareholders, I am delighted to connect with all of you through the Annual Report of your Company. I hope all of you and your families are safe and doing well in these trying times. The Indian economy has gone through a challenging year in 2020/21 with the first contraction of 7.3% since 1952 after many years of positive growth. The Reserve Bank of India (RBI) responded to the situation with the lowering of interest rates, extra liquidity and a special COVID-19 relief package for stressed clients, helping lenders as well as the borrowers in tiding over the difficult situation and getting back to normalcy. The Central Government also unveiled an INR 12 Lakh Cr package across sectors to address the impact of the lockdown and get back to a steady state of economic activity. The big concern at this time is that the International Monetary Fund (IMF) and other local think tanks indicating that about 50 to as much as 230 million citizens of India would have been pushed back into poverty due to COVID-19, negating previous gains achieved over decades of growth. Arohan finished an eventful business year of 2020/21 on March 31, 2021 with the COVID-19 induced lockdown starting from end of March 2020 to the gradual unlocking in the secondhalf of April 2020. AnunprecedentedRBI loan repayment moratorium of six months for borrowers, floods and cyclones in some operational states and increased infection in others, reverse migration of labour from urban centres and opening up of repayments in September 2020 made this a very challenging time. Needless to add, the livelihoods and incomes of our clients were impacted and the same is reflected in their repayment patterns over the last seven months ending March 2021. Some of the key highlights of your Company’s journey last yearwitha sharp focus onbuilding our capabilities towards strengthening our technologically-driven financial inclusion platform are: We launched, an internally developed meraArohan suite of IT modules, which integrates our customer facing modules and our ApnaBazaar app for seamless cross- sell efforts. Backed by the robust IT platform with the base as the Core Banking System, we were able to roll out the 6-month moratorium, 2% interest subvention to eligible Mudra Shishu Loan customers, ex-gratia payments to eligible customers as directed by the Supreme Court, as well as the RBI relief product for our clients. We were able to implement all of the above well in time in order to provide relief to our customers. Our Risk Management unit focused on data analytics and modelling by tracking activations and efficiencies to help the Company with key projections for better management of business. We have completed the groundwork and are currently beta-testing a credit scoring model called ‘Nirnay’ in collaboration with CRIF’s digital decisioning platform, Strategy One. Annual Report | 2020-2021 6