Transcript ADVANCE TRAINING ON MICROFINANCE

FYDFI Meeting
April 2014
About ASA
 ASA India has been incorporated under the Indian
Companies Act and registered with RBI as NBFC
(applied for MFI-NBFC ).
 The company is part of ASA International Group that
has operations besides India in Philippines, Pakistan,
Sri Lanka, Ghana, Nigeria, Cambodia, Kenya, Uganda,
Tanzania, Burma.
 Proposed greenfield operations: Sierra Leon, Rwanda,
Malawi, Zambia and Cameroon;
About ASA International
Elements
Information
ASA
International
Microfinance Investment Vehicle
Established
2007
Registered
Mauritius
Organizational
Type
Limited Liability Company
Operating
Location
Asia & Africa
Fund Allocation
USD 125 Million
Operation
Methodology
Greenfield & Equity investment
Operation
Strategy
ASA Cost Effective & Sustainable Microfinance
Model
3
ASA International - Global Presence
ASAI India – Shareholding:
ASA International
Holding
Proswift
Consultancy Pvt
Ltd
25% equity
ASA International
India Microfinance
Pvt Limited
ASAI India - Methodology
ASAI India follows the ASA Bangladesh’s “Low cost
Sustainable Model” popularly known as ASA Model.
 ASA’s cost effective model has proven itself in different
countries in Asia and Africa.
 Under this model, ASA branches have proved its
capacity to reach a break even point within a year.
 This model is simple as well as cost-effective. This cost
effective method covering Branch Office to the Central
Office ensures ASA’s dedication towards its mission for
reducing poverty.
ASAI India - Management
 The Board of Directors of ASAI India have sizable
experience in the field of Banking, Microfinance and the
Social Sector with global level exposure.
 ASAI India has a professional set-up with experienced
personnel at all levels of management.
 The strong and professional local Management is also
supported by ASA Bangladesh and ASA Netherlands
through technical, Systems/IT, Legal , Risk Management,
training and administrative inputs.
About Proswift Consultancy Pvt Ltd
 Company registered under the Indian Companies Act.
 An Indian Operating Company formed to provide training,
consultancy in the field of Microfinance.
 Also involved in Financial literacy, marketing of micro
insurance products.
 Plans to provide services related to Health, education,
training targeting the bottom of income pyramid.
Proswift Consultancy Pvt Limited
Activities in India
Technical Support to Microfinance Institutions.
 Mahasemam Trust, Madurai
 Vindhyanchal Finlease Private Limited, Lucknow
 ASA India
Training
 Jagaran Microfinance Pvt Limited
 Grihastha Finance Ltd
 Samhita Society
 ASA India
Microinsurance
 Bajaj Life Insurance
ASA India-Operational Areas
ASA International
Number of
Branches
Apr’13”
West
Bengal
State
91 Fifteen District1) Darjeeling
2) Cooch Behar
3) Jalpaiguri
4) South Dinajpur
5) Malda
6) Murshidabad
7) Birbhum
8) Nadia
9) Burdwan
10) North 24 Pgs
11) South 24 Pgs
12) Howrah
13) East Midnapore
14) Hooghly
15) Kolkata
Assam
Tripura
Bihar
4 One District – Kamrup
4 One District – Agartala
2 One District – Kishanganj
UP
1 One District101`
– Varanasi
`
Operational Snapshot (ASAI India)
Sl. No
Particulars
As on 31st march 2014
5
1
States Covered
2
Districts covered
3
Branches
4
Borrowers
5
No of loan officers
250
6
No of total staff
415
7
Portfolio Rs in Crores (Incl interest)
53.25
8
PAR>30 days (%)
1.31%
9
Repayment rate (%)
99.66
19
102
84313
ASA INTERNATIONAL MICROFINANCE PVT. LTD.
Statement of Profit & Loss for the period ended 28th February, 2014
For the Period from
Apr'2013 to Feb' 2014
Note
Revenue
Revenue From Operations
Other Income
Total Revenue
Expenses
Employee Benefits Expense
Finance Cost
Depreciation & Amortisation expense
Other expenses
Total Expenses
Profit before exceptional and extraordinary
items and tax
Exceptional Items (Profit from sale of assets)
Profit before extraordinary items and tax
Extraordinary Items
Profit before tax
Tax Expense
Current Tax
Deferred Tax
Profit/(Loss) for the period from continuing
operations
Profit/(Loss) for the period
4.1
4.2
4.3
4.4
4.5
4.6
Rs
12,30,11,640
64,72,145
12,94,83,786
5,88,34,969
2,12,44,742
13,29,096
2,86,63,112
11,00,71,919
1,94,11,867
1,94,11,867
0
1,94,11,867
1,94,11,867
1,94,11,867
ASA INTERNATIONAL INDIA MICROFINANCE PVT. LTD.
Provisional Balance Sheet as at 28.02.2014
As At
Note
Equity & Liabilities
Shareholders' Funds
Share Capital
Reserves & Surplus
Share Application Money pending allottment
Total Shareholders' Funds (i)
Non-Current Liabilities
Long Term Borrowings
Other Long Term Liabilities
Long Term Provisions
Total Non -Current liabilities
Current Assets
Cash & Bank Balances
Short Term Loans & Advances
Other Current Assets
Total Current Assets (v)
Total Assets (iv)+(v)
1,19,99,900
39,89,68,430
41,09,68,330
3.3
3.4
3.5
0
0
25,96,975
25,96,975
3.6
3.7
3.8
(i)+(ii)+(iii)
Assets
Non Current Assets
Fixed Assets
Tangible Assets
Intangible Assets
Capital Work in Progress
Deferred Tax Liabilities (Net)
Long Term Loans & Advances
Other Non Current Assets
Total Non Current Assets
3.1
3.2
(ii)
Current Liabilities
Short Term Borrowings
Other Current Liabilities
Short Term Provisions
Total Current Liabilities (iii)
Total Equity & Liabilities
February 28,2014
Rs
45,00,000
10,12,57,401
0
10,57,57,401
51,93,22,707
33,17,849
3.9
3.10
3.11
(iv)
15,24,690
9,26,732
1,07,64,449
1,65,33,720
3.12
3.13
3.14
2,95,94,620
47,16,29,723
15,64,643
50,27,88,987
51,93,22,707
ASAI India Projections - Balance Sheet
ASA International India Microfinance Pvt. Ltd
Year ended ->
LIABILITIES
Shareholder Fund
Equity Share Capital(Paid up)
Share Premium
Statutory Reserve@20%of PAT
General Reserve@10% of PAT
Retain Profit
Less: Prelim exp w/o
Long Term borrowing
Long Term Provision
Secured Loan
Unsecured loan
Loan Loss Reserve
Current Liability
Total Liabilities
ASSETS
Gross Fixed Assets
Less Depreciation
Net fixed assets
Gross Loan Portfolio
Cash & bank balance
Other current assets
Investments in TDR)
Total Assets
Dec 2014
Dec 2015
Projected
Projected
4284.18
4620.88
120.00
120.00
3063.60
3063.60
259.29
326.63
116.05
149.72
725.24
960.93
0.00
0.00
4881.88
5202.35
Rs. In lakh
Dec 2016 Dec 2017 Dec 2018
Projected Projected Projected
4976.30 5347.40
5731.16
120.00
120.00
120.00
3063.60 3063.60
3063.60
397.71
471.93
548.88
185.27
222.38
260.85
1209.72 1469.49
1738.82
0.00
0.00
1.00
5946.56 6353.28
7182.64
4871.88
10.00
84.87
67.98
9318.92
5192.35
10.00
92.82
58.70
9974.75
5936.56 6343.28
10.00
10.00
99.47
109.04
56.98
65.70
11079.30 11875.41
7171.64
11.00
119.95
66.70
13100.45
436.61
303.45
133.16
8487.19
318.28
122.24
258.05
9318.92
531.48
319.71
211.77
9282.36
129.61
112.96
238.05
9974.75
635.85
750.64
339.23
362.65
296.61
387.99
9946.86 10903.70
571.54
360.71
111.24
119.96
153.05
103.05
11079.30 11875.41
876.92
390.76
486.16
11994.69
455.58
120.96
43.05
13100.45
ASAI India Projections – Profit & Loss
ASA International India Micro Finance Private Limited
Rs. In lakh
PROFITABILITY ESTIMATES
Year ended ->
Dec 2014 Dec 2015 Dec 2016 Dec 2017 Year 2018
Particulars
Projected
Projected
Projected Projected
Projected
Income
Income from Micro Credit oper
Processing fees
Other financial income
2010.85
2456.61
2715.17
3053.13
3353.48
190.36
199.87
223.86
246.24
270.87
14.67
23.22
21.42
13.77
9.27
2215.88
2679.70
2960.46
3313.15
3633.62
Intt. on borrowings
Other financial expenses(including
processing fees)
532.01
567.00
601.97
692.69
783.14
32.50
30.00
40.00
37.50
40.00
TOTAL FINANCIAL COSTS (B)
564.51
597.00
641.97
730.19
823.14
1651.37
2082.70
2318.49
2582.96
2810.48
35.68
7.95
6.64
9.57
10.91
1615.69
2074.75
2311.85
2573.39
2799.57
789.79
987.24
1135.33
1305.63
1436.19
13.55
16.26
19.52
23.42
28.11
TOTAL FINANCIAL INCOME(A)
FINANCIAL COST
GROSS FINANCIAL MARGIN (A-B)
Loan Loss Provision
NET FINANCIAL MARGIN (C)
Expenses
OPERATING EXPENSES
Personnel Expenses
Depreciation
Administrative & Development Expenses
Total Operating Expenses (D)
NET OPERATING PROFIT [C-D]
Income from other adjustments (E)
Gross PROFIT [C-D+E]
Corporate Tax
PAT
Dep. Added Back
Net Cash Accruals
491.87
590.24
649.27
714.19
785.61
1295.22
1593.75
1804.11
2043.24
2249.91
320.48
481.00
507.73
530.15
549.66
0.00
0.00
0.00
0.00
0.00
320.48
481.00
507.73
530.15
549.66
96.14
144.30
152.32
159.04
164.90
224.33
336.70
355.41
371.10
384.76
13.55
16.26
19.52
23.42
28.11
273.56
360.92
381.58
404.09
423.78
ASA’s Innovation in Microcredit
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Flexibility of group formation/No bindings on group guarantee
Simplicity and transparent system
Low-costs management
Standardization
Delegation of authority in the field level
Innovative staff recruitment and on-the-job (each one-teach one) training
Simple and shorter loan processing, less waiting time for the borrower
Written manual thereby uniformity and greater control.
Strong monitoring and supervision
Standard and low cost structure on furniture, fixture and overall management
costs
 Donors free sustainable growth, high ROA and ROE.
 Strong IT and Systems-AMMS software covering operational, financial, MIS
and HR. Developed in-house by ASA Bangladesh and used globally across all
countries.
ASA’s Innovation in Microcredit
 ASA’s Operating Model distinguishes from many other microfinance institutions through its
standardized and efficient policies and procedures
 Exclusively working capital loans for income generating activities
 Individual client selection, no joint liability, which has the advantage that (i) each prospective
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client’s business is more carefully evaluated, (ii) good clients are not penalized by nonperforming clients, and (iii) clients are not dependent on group formation prior to first loan
Lending groups are formed in order to achieve and maintain distribution efficiencies in order to
maintain weekly client contact and collect installments
Highly standardized lending and control model
Centrally controlled policies and procedures combined with decentralized credit decision
Rigorous focus on cost control and achieving ongoing cost efficiencies
Flexible loan products suited to client’s capacity to repay
Graduation principle – good credit record provides access to bigger loans
Ongoing focus on improving products and loan protection through various insurance schemes
Rapidly scalable, primarily dependent on the ability to train and maintain experienced staff
 Through the application of ASA’s Operating Model, ASA’s and ASA International’s (i) cost/income ratio
is comparatively low and return on outstanding loan portfolio is high despite never charging higher
interest rates than any of its peers/competitors, and (ii) portfolio quality remains high
International Recognition and Awards
 “Banking at the Bottom of the Pyramid” Award by
Financial Times and International Finance Corporation
(IFC) UK (2008)
 Selected as the best MFI worldwide by Forbes (Dec 2007)
 “The Ford Motor Model of Microfinance” Asian
Development Bank
 Best International Technical Service Provider for UNDP
Micro Start Program in the Philippines and Nigeria
 Placed in all the six categories with exceptional best
result: MIX Report 2005
 Empowerment of Women Award
ASA International - Excellent Social Performance Track Record
Social rating
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ASA International
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Five star rating by GIIRS (Global Impact Investing Rating System) for second year in a row
GIIRS is a ratings and analytics platform for impact investing that provides comparable and verified social
and environmental performance data on high impact companies seeking investment capital
GIIRS now has the largest database of social and environmental performance data on private companies
Out of 219 companies rated ASAI scored highest rating in three benchmark groups (company vs market,
market & sector, and market & size)
Social responsible investment
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ASAI signing up as signatory to the United Nations-supported Principles for Responsible Investment (PRI)
Initiative. The Principles are voluntary and aspirational offering a menu of possible actions for
incorporating ESG issues into investment practices across asset classes
PRI Initiative is the leading global network for investors to publicly demonstrate commitment to
responsible investment
Social policies and practices
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ASAI adopted the SMART principles. These Client Protection Principles are the minimum standards that
clients should expect to receive when doing business with a microfinance institution based on consensus in
the microfinance industry
ASAI desires to be fully transparent in the pricing, terms, and
conditions of all its financial products. It also aims offer the most
competitive rates in each of the markets it is active in
ASAI promotes the establishment and use of credit bureaus
Public reporting

ASAI publishes data on mix market
21
Impact Study
ASA India – Impact through Microfinance
Client Basanti Sarkar
ASA Group: Deep
Activity: Papad Manufacturing
First Loan Rs.10,000/Current Loan Rs.12,000/-
“I used to spend sleepless nights worrying about my family and
children when my husband’s business failed. ASA has given me a
new of life and now I am able to provide my family a good living
standard.”
Basanti’s success story goes back to 4 years ago when her husband suffered a huge loss in his Saree business. The family
was pushed towards scarcity, getting out of such situation became a major challenge in absence of finance.
She approached ASA India and narrated her situation and sought support. With funding from ASA India she decided
to go into Papad making for her livelihood activity. The activity not only supported her family, provide good education
to her children, she could repay the loan as also expand her business. She continued to avail loan from ASA after
repayment of the previous cycle.
Presently her annual turnover exceeds Rs 4 lakhs with annual profits of around Rs 1 lakh.
What started as a small self-employed unit now provides employment to 8 to 10 families in the locality.
Impact Study
Client Mala Paul
ASA Group: Nandini
First Loan : Rs. 8,000
Activity: Clay modeling
Current Loan: Rs. 15,000
“ASA support in addition to the financial security has provided us
and our art recognition.”
Life has been a struggle for Mala Paul and her husband Bhanu Rudra Paul
before they approached ASA India. The meager Rs. 3000 income was
inadequate to make ends meet. Mala Paul approached ASA India, with ASA
India’s support activity expanded; orders started flowing-in thereby the
turnover and income. She kept repaying the loan in a disciplined manner,
again approaching for next cycle of loan. Her business now has a annual
turnover of over Rs.4 lakhs with her income more than Rs. 1 Lakh.
She is an empowered woman from Kumartuli area of North Kolkata who now successfully running the business
venture and assisting her husband to shoulder the responsibility of her family. Her 13 year old daughter could be
educated at one of the reputed schools at Kolkata.
Apart from the income her talent has been recognized at state and national level through:
Various awards, recognitions, cash rewards.
A documentary on her talents and achievements, the documentary being selected as 4th best out of 350 documentary.
A contract from Howrah Municipal Corporation for Rs. 1,40,000/- to make clay model depicting scenes from Hindu
religious epic Ramayana to be displayed at Bellilious Park.
Thank you