Sanchetna for investors august'11

Sanchetna Financial Services Pvt. Ltd. This Document is CONFIDENTIAL and its circulation and use are RESTRICTED

Management of Sanchetna is run by young professionals and yet very experienced and qualified individuals with over 31 years of combined relevant management experience. The mandate of the organization is to reach the poor unbanked clients in some of the poorer states of India. The organisation has so far reached out to over 8000 families in 5 districts of Central Uttar Pradesh. Currently, it provides micro-credit services bundled with loan cover insurance. In the very first year of its operations, it was rated  by M-CRIL. A year later (in 2010), it was upgraded to  + . Particulars Detail Date of formation 8 th June 2008 Areas of Operation Uttar Pradesh Portfolio outstanding INR 43.5 Million No. of Members 9454 No. of Active Borrowers 7657 Number of branches 7 No. of Loan Officers 17 Portfolio At Risk > 30 days (%) 0.8%

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[object Object],[object Object],[object Object],[object Object],Source: Sa-Dhan Microfinance Report 2008 State Total Microfinance Clients Share of state to total clients (%) State Population % share of population Number of Poor (2004-05) % share of poor Microfinance Penetration Index Microfinance Poverty Penetration Index Uttar Pradesh 3,613,118 6.10 180,990,000 16.43 59,003,000 19.56 0.37 0.31 Uttarakhand 337,625 0.60 9,123,000 0.83 3,596,000 1.19 0.69 0.48 Rajasthan 2,335,369 3.90 61,525,000 5.59 13,489,000 4.47 0.70 0.88 Bihar 1,455,981 2.50 89,776,000 8.15 36,915,000 12.24 0.30 0.20 Madhya Pradesh 1,312,668 2.20 65,605,000 5.96 24,968,000 8.28 0.37 0.27 Total 15.30 36.96 45.74 Comparison Andhra Pradesh 13,061,436 22.00 80,147,000 7.28 12,610,000 4.18 3.03 5.27

[object Object],[object Object],[object Object],Source: Sa-Dhan Microfinance Report 2008 Proposed Expansion Area Current Area of Operation Microfinance Outreach in Uttar Pradesh Clients outreach 533,041 Portfolio outstanding Rs. 347 crore Number of districts served 36 Number of poorest districts 15

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[object Object],Recommendations Impact / Response ,[object Object],Positive as it opposes dual regulation. ,[object Object],As Sanchetna does only microfinance, it already complies with this. Capping gross margin at 10%, interest rates at 26% p.a. & processing fee at 1%; no other charges to be levied Sanchetna reduced interest rates in the past one year from 29.25% to 27.2%, which is lower vis-à-vis many competitors. It still generates surplus at these rates, mainly due to a tight control over the Admin costs. Proposed monthly repayments (currently, it is weekly) would further unlock staff productivity & drive down the costs.

Recommendations Impact / Response For loans higher than Rs. 15000, tenor not less than 24 months Products will be tweaked accordingly ,[object Object],Self declaration is required which is part of the process ,[object Object],As most of the current loans are even less than Rs 15,000 only, this would not have any material impact on Sanchetna. ,[object Object],Unlike many other microfinance organizations, Sanchetna does not take any collateral / security for the loans. ,[object Object],All of Sanchetna’s loans are for income-generation purpose only. ,[object Object],As Sanchetna would also be experimenting with monthly repayments, it may shift all its loans to monthly repayments.

Sanchetna Financial Services Pvt. Ltd. (SFSPL) Catalyst for change 5/82, Vipul Khand, Gomtinagar Lucknow, Uttar Pradesh- 226010 Tel / Fax: + 91 522 4076 350 Website – www.sanchetnaindia.com For more information, contact: [email_address] Visit us: We welcome you to visit our field areas to witness the impact of our work. To schedule a visit, email us @ [email_address] with details of your visit. We shall be happy to host you at Sanchetna

Sanchetna for investors august'11

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Sanchetna for investors august'11

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