43 | Annual Report | 2025-2026 Approximately 16,000 customers were settled through this scheme in FY 2026, compared to 24,000+ in FY 2025, 22,000+ in FY 2024, 1500+ in FY 2023 and 495 in FY 2022. Legal Strategy: Structured Escalation with Fair Warning a) Soft Reminders and Legal Notices: As part of a phased approach, Soft Reminder Letters are issued to encourage repayment and serve as an early intervention tool. If customers remain unresponsive, formal Legal Notices are issued through empanelled Advocates, emphasizing the seriousness of the obligation while still offering opportunities for resolution. b) Alternative Dispute Resolution via Lok Adalats: Arohan has also actively leveraged settlement opportunities through Special Lok Adalats and National Lok Adalats, providing customers with a fair and legal platform to settle dues. These initiatives not only expedite resolution but also offer customers a dignified path to restore their credit standing. Through all these legal efforts and interventions, Arohan recovered over INR 23 Cr in FY 2026 demonstrating the effectiveness of a balanced strategy that emphasizes both firmness and fairness. Technology-Driven Recovery Initiatives Leveraging External Solutions: a) Conversational AI-driven Voice Bots: In FY 2026, Arohan continued to use generative AI driven conversational voice calls by “Arohi”, the Company’s first Bot Employee, to gauge customers’ intentions regarding repayment or settlement of their overdue accounts. By following up on recorded Promise-ToPay (PTP) dates, Arohan has ensured more targeted recovery efforts in a shorter timeframe. This approach has helped in the recovery of approximately INR 4 Cr of which 75% is from previously inactive accounts. This underscores the effectiveness of leveraging advanced technology to engage with customers and drive positive outcomes in debt recovery efforts. b) Dista, AI-based Field-Force Management Software: Arohan continued leveraging the ‘Dista’ app—an AIbased field force management tool—to streamline the daily operations of its Recovery Executives. The platform enables efficient tracking of customer interactions, facilitates seamless follow-ups, and inapp nudges that guide field teams toward priority actions. These, along with a ‘manager’ app for the respective supervisors, significantly boosted the monitoring of recovery efforts, expanding field coverage increasing the likelihood of repayment from targeted customer segments. c) Strengthening Skip Tracing Capabilities: In cases where customers are uncontactable, we undertake structured skip-tracing through our in-house team and where required, use external solutions to obtain and validate alternate contact information. In the last quarter of FY 2026, a pilot on a small noncontactable customer base using this intelligence improved contact-ability by ~32 % of the pilot pool. INORGANIC BUSINESS Our inorganic business generally refers to a partnershipdriven lending model where we collaborate with NBFCs to originate and service loans. Our inorganic business comprises (i) the provision of term loans to NBFCs, (ii) sourcing and collections activities undertaken through partnered MFIs, and (iii) Direct Assignment (“DA”) transactions from other NBFCs. These partnerships enable us to expand our business reach through assetlight, scalable models while maintaining prudent credit and operational controls. 1) Term Loans to NBFCs We extend term loans upto INR 100 Cr to NBFCs that borrow from Arohan to create financial assets (loan portfolio). These loans are provided for the purpose of onward lending. Prospective NBFC partners are identified through a structured evaluation process. This includes comprehensive financial and operational due diligence, KYC, following which proposals are presented to our credit committee for approval. Loan disbursements are executed in accordance with the sanction terms and internal credit guidelines, ensuring adherence to our underwriting standards and risk management framework. 2) Sourcing and Collection Arrangements Under these arrangements, select small MFIs act as No. of Customers Settled through Sandhi Scheme 33 495 1,541 22,411 24,537 15,950 FY21 FY22 FY23 FY24 FY25 FY26
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