The document provides an overview of SKS Microfinance, including its business model, valuation process, and regulatory environment. SKS pioneered the joint liability group lending model and grew rapidly before facing difficulties in 2010. It valued itself using a branch-level valuation model that projected earnings and growth rates. Key recommendations from the Malegam Committee established regulations for the microfinance sector, including categorizing qualified NBFCs as NBFC-MFIs and capping interest rates.
SKS is a microfinance institution founded in 1997 that provides financial services to economically weaker sections across 19 Indian states. It follows the joint liability group model, serving over 5 million borrowers through more than 1000 branches. SKS aims to financially include 50 million households across India through products like income generation loans, gold loans, and insurance. It has transformed operations with digital technologies and lowered interest rates to 19.75% to better serve customers according to its mission and vision of ethical, customer-centric services. However, SKS has also faced controversies regarding over-indebtedness, high staff turnover, and corporate governance issues.
The document summarizes information about Axis Bank, an Indian private sector bank. It provides details about Axis Bank's history, services, financial performance, strategies, and objectives. Specifically, it notes that Axis Bank was one of the first new private banks in India after 1994. It has over 900 branches across the country and one of the largest ATM networks. The bank offers retail, corporate, and other banking services. Its financial performance has seen steady growth in recent years. Axis Bank aims to further improve its market position and achieve certain targets through strategies around segmentation, targeting, positioning, and marketing its services.
1. The document discusses key dimensions of a well-functioning financial system including origination, risk transmission, and risk aggregation.
2. Origination involves providing financial products and services to households and firms, while risk transmission involves the orderly reassignment of risks from originators to risk aggregators.
3. Risk aggregation allows originators to transfer systematic risk to well-capitalized institutions that can bear and manage such risk. A well-functioning system requires robust risk aggregation capacity.
SKS Microfinance Limited is a non-banking finance company regulated by the Reserve Bank of India that provides small loans ranging from Rs. 2,000 to Rs. 12,000 to poor women in India so they can start or expand small businesses and increase their incomes, with the goal of reducing poverty and spreading economic opportunity. SKS's mission is to provide financial services to low-income households across India and other parts of the world through a commercial microfinance model.
The State Bank of India (SBI) is India's largest bank. It has over 13,000 branches within India and 190 foreign offices internationally. SBI employs over 200,000 people and has over $3 trillion in assets and deposits. It offers a wide range of personal, corporate, government, and agricultural banking products and services to its customers. SBI has seen significant growth in recent years through expanding its branch network, increasing deposits and loans, and acquiring other banks.
This document provides an analysis of opportunity for promotional strategies for State Bank of India. It begins with an overview of SBI as the largest nationalized commercial bank in India. It then defines various banking services including investment banking, retail banking, commercial banking, private banking, and asset management. It identifies SBI's target markets as current and potential customers in rural areas and tier 2/3 cities. The document outlines SBI's communication objectives of increasing awareness, attention, and purchase actions. It notes factors that affect the communication budget such as company strategy, product life cycle stage, and competitive intensity. Finally, it recommends creating communications strategies that match SBI's strategy and focus on opportunities/threats while fitting the company image, and
- Bank of Baroda (BOB) was founded in 1908 in Baroda, India with a paid up capital of Rs. 10 lacs under the leadership of Maharaja Sayajirao Gaekwad III.
- It is currently the third largest public sector bank in India with over 4,283 branches across India and 111 branches overseas.
- Over the years, BOB has grown organically and through mergers and acquisitions. It has expanded its operations across 25 countries globally.
SKS is a microfinance institution founded in 1997 that provides financial services to economically weaker sections across 19 Indian states. It follows the joint liability group model, serving over 5 million borrowers through more than 1000 branches. SKS aims to financially include 50 million households across India through products like income generation loans, gold loans, and insurance. It has transformed operations with digital technologies and lowered interest rates to 19.75% to better serve customers according to its mission and vision of ethical, customer-centric services. However, SKS has also faced controversies regarding over-indebtedness, high staff turnover, and corporate governance issues.
The document summarizes information about Axis Bank, an Indian private sector bank. It provides details about Axis Bank's history, services, financial performance, strategies, and objectives. Specifically, it notes that Axis Bank was one of the first new private banks in India after 1994. It has over 900 branches across the country and one of the largest ATM networks. The bank offers retail, corporate, and other banking services. Its financial performance has seen steady growth in recent years. Axis Bank aims to further improve its market position and achieve certain targets through strategies around segmentation, targeting, positioning, and marketing its services.
1. The document discusses key dimensions of a well-functioning financial system including origination, risk transmission, and risk aggregation.
2. Origination involves providing financial products and services to households and firms, while risk transmission involves the orderly reassignment of risks from originators to risk aggregators.
3. Risk aggregation allows originators to transfer systematic risk to well-capitalized institutions that can bear and manage such risk. A well-functioning system requires robust risk aggregation capacity.
SKS Microfinance Limited is a non-banking finance company regulated by the Reserve Bank of India that provides small loans ranging from Rs. 2,000 to Rs. 12,000 to poor women in India so they can start or expand small businesses and increase their incomes, with the goal of reducing poverty and spreading economic opportunity. SKS's mission is to provide financial services to low-income households across India and other parts of the world through a commercial microfinance model.
The State Bank of India (SBI) is India's largest bank. It has over 13,000 branches within India and 190 foreign offices internationally. SBI employs over 200,000 people and has over $3 trillion in assets and deposits. It offers a wide range of personal, corporate, government, and agricultural banking products and services to its customers. SBI has seen significant growth in recent years through expanding its branch network, increasing deposits and loans, and acquiring other banks.
This document provides an analysis of opportunity for promotional strategies for State Bank of India. It begins with an overview of SBI as the largest nationalized commercial bank in India. It then defines various banking services including investment banking, retail banking, commercial banking, private banking, and asset management. It identifies SBI's target markets as current and potential customers in rural areas and tier 2/3 cities. The document outlines SBI's communication objectives of increasing awareness, attention, and purchase actions. It notes factors that affect the communication budget such as company strategy, product life cycle stage, and competitive intensity. Finally, it recommends creating communications strategies that match SBI's strategy and focus on opportunities/threats while fitting the company image, and
- Bank of Baroda (BOB) was founded in 1908 in Baroda, India with a paid up capital of Rs. 10 lacs under the leadership of Maharaja Sayajirao Gaekwad III.
- It is currently the third largest public sector bank in India with over 4,283 branches across India and 111 branches overseas.
- Over the years, BOB has grown organically and through mergers and acquisitions. It has expanded its operations across 25 countries globally.
This document provides an overview and analysis of public sector banks, private sector banks, and foreign banks in India from 2010-2011 to 2014-2015. It summarizes the origin and role of public sector banks in India and compares their financial performance to private and foreign banks in key metrics like deposits, credit disbursal, credit-deposit ratios, profitability, and non-performing assets. The analysis finds that public sector banks attract more deposits but have higher non-performing assets, while private banks are growing their loan portfolios more rapidly but have stronger asset quality.
Kotak Mahindra Bank is an Indian bank that was originally established as a non-banking financial company in 1985 called Kotak Mahindra Finance Limited. In 2003, it was granted a banking license by the Reserve Bank of India, making it the first company in Indian banking history to convert to a bank. Over the years, Kotak Mahindra Bank has expanded its operations and products, and as of 2014 had over 500 branches, 1,000 ATMs, and total assets of over $2.9 billion. The bank has received several awards recognizing its leadership, innovation, and financial performance in the Indian banking sector.
Industrial Credit & Investment Corporation of India (ICICI) presented on their principles of management. ICICI is India's second largest bank with over 4 trillion rupees in total assets. The presentation covered ICICI's history, awards, vision, management style, strategy for future challenges, and plans to enable India's economy through digital initiatives by 2015. ICICI aims to be a truly universal bank and sustain double digit growth through product innovation, technology usage, and focus on retail banking, SMEs, and financial inclusion.
This document provides information about mutual funds including their structure, types, history in India, advantages and disadvantages. It discusses that a mutual fund is a trust that collects money from investors and invests in stocks, bonds, money market instruments and other securities. The document outlines the key entities involved in mutual funds like sponsors, trustees, asset management companies, custodians and various distribution channels. It also summarizes the different types of mutual fund schemes and provides a brief history of mutual funds in India from 1964 to the present.
In this PPT all information related to ICICI Bank like organization structure and history of ICICI Bank. Information related to products and services.Current scenario of ICICI Bank.
This presentation is on satyam scam & was created for educational purpose.this presentation include various aspects of satyam scam such as satyam Company Profile, satyam Achievements , Overview of the satyam scam, How the satyam scam started to unravel, Modus operandi of satyam scam, Impact Of satyam Scam, Regulatory action etc.
The Three Pillars of Behavioral FinanceDaniel Crosby
Eschewing the "lists of biases" approach that has so long dominated the field. Dr. Daniel Crosby approaches behavioral finance from a holistic perspective that allows investors and advisors to remember and profit from its fundamental tenets. This presentation has now been seen by thousands of advisors and high net worth investors!
Banking in India originated in the late 18th century with the Bank of Hindustan and General Bank of India. The oldest and largest bank still in existence is the State Bank of India, which originated from the Bank of Bengal and later merged with the Bank of Bombay and Bank of Madras to form the Imperial Bank of India. In 1955 it became the State Bank of India. The government nationalized many banks in 1969 and they remain under government ownership as public sector undertakings. The modern Indian banking sector includes public sector banks, private sector banks, foreign banks, regional rural banks, urban cooperative banks and state cooperative banks.
The Union Bank of India was established in 1919 in Mumbai and was inaugurated by Mahatma Gandhi. It grew from only 4 branches in 1947 to 240 branches in 28 states by 1975 when it was nationalized. Since then it has expanded further through mergers with other banks and the acquisition of branches. It now has over 2200 branches within India and branches in other countries. The bank provides various services like loans, credit cards, and online services through its core banking solution platform.
1) ICICI Bank was originally promoted in 1994 and was originally a wholly-owned subsidiary of ICICI Limited, an Indian financial institution. Over time, ICICI's ownership was reduced through public offerings and acquisitions.
2) The document discusses ICICI Bank's mission, vision and CSR initiatives which focus on education, healthcare, skill development, financial inclusion and rural development.
3) It provides details on ICICI Bank's investment products and services like equities, bonds, mutual funds, real estate, precious metals, and life insurance; and average historical returns for each.
The State Bank of India was formed in 1955 by nationalizing the Imperial Bank of India. It offers a wide range of personal and corporate banking products and services. These include various deposit accounts, loans, treasury services, internet banking, and agricultural financing programs. Recently introduced products include zero balance savings accounts, minor bank accounts, and family banking packages. The bank aims to leverage digital technologies to better serve customers and facilitate business between farmers, wholesalers, and retailers.
The document discusses non-performing assets (NPAs) in the Indian banking system. It defines NPAs and outlines the different categories of assets based on their performance - standard, sub-standard, doubtful, and loss assets. Gross and net NPAs are also defined. The rise of NPAs can be attributed to both internal and external factors. Banks employ both preventive and curative strategies to manage their NPAs, such as restructuring loans, pursuing debt recovery, and using asset reconstruction companies. Tables show trends in NPAs for public sector banks, private banks, and all scheduled commercial banks from 2006-2007 to 2010-2011.
This document discusses the history and initiatives of Bank of Baroda, one of India's largest public sector banks. It traces the bank's origins back to 1908 when it was established in Baroda by the Maharaja of Baroda. Over the decades, the bank expanded both within India and internationally, growing to have over 2,700 branches across 21 countries. The document highlights some of the bank's key initiatives including expanding customer services, developing its people, strengthening finances, and advancing digitization. It recognizes the important role played by both leadership and ordinary employees in building the institution over the past century.
Bank of Baroda is the third largest public sector bank in India. It was founded in 1908 and is headquartered in Baroda. As of fiscal year 2009, it had over 3,000 branches including 70 overseas, with total assets of Rs. 2.27 trillion and net profits of Rs. 2.22 trillion. The bank focuses on increasing retail credit, maintaining high asset quality ratios, and growing its total business while protecting asset quality. Going forward, it aims to achieve 20-22% total business growth by focusing on low-cost deposits and adding 2.5-3 million new customers annually.
This document provides an overview of Axis Bank, including:
- Axis Bank was established in 1994 as the first private sector bank after reforms allowed private banks. It was jointly promoted by UTI, LIC, and other insurers.
- Axis Bank is now the third largest private sector bank in India with over 1,700 branches across the country.
- The document outlines Axis Bank's business activities, subsidiaries, promoters including UTI and LIC, and its position as one of the leading banking franchises in India.
Banking and Financial Institutions (as per UGC NET syllabus)Abbas Vattoli
a power point presentation on banking and financial institutions convering origin and history of banking in india, commercial banking classification and functions, investment banking role and initiatives, NPA warning signals and mannagement of NPA, NABARD and its rural banking innovations.
The document discusses the growth of India's financial sector. It notes that the financial sector contributes approximately 15% to India's GDP and is the second largest component after trade and transportation. The key components of the financial sector discussed are banking, insurance, capital markets, mutual funds, non-banking financial corporations, and microfinance institutions. The banking sector has seen significant growth and reforms since liberalization in 1991, with increasing deposits, assets, and branch penetration across India. The insurance and capital markets have also grown substantially in recent decades through various reforms and regulations. Overall, India's financial sector has expanded rapidly and provides important services across the country.
A case study on how Harshad Mehta scammed the entire stock market. There are certain examples and history on how he played a role as a stockbroker.
The underlined and highlighted words can be googled to further more enhance your knowledge.
ICICI Bank was founded in 1955 and has since grown to become the second largest bank in India. It offers a wide range of banking and financial services through its subsidiaries, which include ICICI Prudential Life Insurance (largest private insurer), ICICI Lombard General Insurance, ICICI Securities, and ICICI Prudential Asset Management (third largest mutual fund). Over the past 5 years, ICICI Bank has significantly grown its revenues and profits. It aims to strengthen its position in India and globally through strategic initiatives focused on retail banking, cost reductions, and maintaining its brand as the number one banking brand in India.
SKS Microfinance aims to empower the poorest of the poor in India to become self-reliant by providing financial services. Since 1998, SKS has grown to serve over 10,000 customers across 4 branches and 314 village centers, with a 99.9% repayment rate. To continue scaling its operations, SKS developed SKS MAPS, a fully integrated and automated MIS using smart cards and palm pilots to reduce transaction costs and risks associated with high-volume, low-value microloans. This technology innovation has increased productivity and streamlined information collection and reporting.
Indian Microfinance - Looking Beyond The AP Act and its Devastating Impact on...hamishbanks
The paper documents the disastrous consequences of legislation passed by Government of Andhra Pradesh in December 2010, and how this has brought about a national crisis. The legislation - the AP Act - not only undermines India’s financial inclusion agenda but also punishes the poor in every state across India. We welcome and encourage the swift passage of the upcoming microfinance Bill through Parliament, which should ultimately supersede the AP Act. While the Bill must be passed at the earliest to avoid further damaging the lives of India’s poor, the report highlights provisions in the Bill and recent RBI circular on NBFC-MFIs that threaten to undermine the Bill’s intentions. Finally, it examines the important role of the private sector in contributing to the challenge of facilitating financial inclusion to India’s 450 million unbanked citizens.
This document provides an overview and analysis of public sector banks, private sector banks, and foreign banks in India from 2010-2011 to 2014-2015. It summarizes the origin and role of public sector banks in India and compares their financial performance to private and foreign banks in key metrics like deposits, credit disbursal, credit-deposit ratios, profitability, and non-performing assets. The analysis finds that public sector banks attract more deposits but have higher non-performing assets, while private banks are growing their loan portfolios more rapidly but have stronger asset quality.
Kotak Mahindra Bank is an Indian bank that was originally established as a non-banking financial company in 1985 called Kotak Mahindra Finance Limited. In 2003, it was granted a banking license by the Reserve Bank of India, making it the first company in Indian banking history to convert to a bank. Over the years, Kotak Mahindra Bank has expanded its operations and products, and as of 2014 had over 500 branches, 1,000 ATMs, and total assets of over $2.9 billion. The bank has received several awards recognizing its leadership, innovation, and financial performance in the Indian banking sector.
Industrial Credit & Investment Corporation of India (ICICI) presented on their principles of management. ICICI is India's second largest bank with over 4 trillion rupees in total assets. The presentation covered ICICI's history, awards, vision, management style, strategy for future challenges, and plans to enable India's economy through digital initiatives by 2015. ICICI aims to be a truly universal bank and sustain double digit growth through product innovation, technology usage, and focus on retail banking, SMEs, and financial inclusion.
This document provides information about mutual funds including their structure, types, history in India, advantages and disadvantages. It discusses that a mutual fund is a trust that collects money from investors and invests in stocks, bonds, money market instruments and other securities. The document outlines the key entities involved in mutual funds like sponsors, trustees, asset management companies, custodians and various distribution channels. It also summarizes the different types of mutual fund schemes and provides a brief history of mutual funds in India from 1964 to the present.
In this PPT all information related to ICICI Bank like organization structure and history of ICICI Bank. Information related to products and services.Current scenario of ICICI Bank.
This presentation is on satyam scam & was created for educational purpose.this presentation include various aspects of satyam scam such as satyam Company Profile, satyam Achievements , Overview of the satyam scam, How the satyam scam started to unravel, Modus operandi of satyam scam, Impact Of satyam Scam, Regulatory action etc.
The Three Pillars of Behavioral FinanceDaniel Crosby
Eschewing the "lists of biases" approach that has so long dominated the field. Dr. Daniel Crosby approaches behavioral finance from a holistic perspective that allows investors and advisors to remember and profit from its fundamental tenets. This presentation has now been seen by thousands of advisors and high net worth investors!
Banking in India originated in the late 18th century with the Bank of Hindustan and General Bank of India. The oldest and largest bank still in existence is the State Bank of India, which originated from the Bank of Bengal and later merged with the Bank of Bombay and Bank of Madras to form the Imperial Bank of India. In 1955 it became the State Bank of India. The government nationalized many banks in 1969 and they remain under government ownership as public sector undertakings. The modern Indian banking sector includes public sector banks, private sector banks, foreign banks, regional rural banks, urban cooperative banks and state cooperative banks.
The Union Bank of India was established in 1919 in Mumbai and was inaugurated by Mahatma Gandhi. It grew from only 4 branches in 1947 to 240 branches in 28 states by 1975 when it was nationalized. Since then it has expanded further through mergers with other banks and the acquisition of branches. It now has over 2200 branches within India and branches in other countries. The bank provides various services like loans, credit cards, and online services through its core banking solution platform.
1) ICICI Bank was originally promoted in 1994 and was originally a wholly-owned subsidiary of ICICI Limited, an Indian financial institution. Over time, ICICI's ownership was reduced through public offerings and acquisitions.
2) The document discusses ICICI Bank's mission, vision and CSR initiatives which focus on education, healthcare, skill development, financial inclusion and rural development.
3) It provides details on ICICI Bank's investment products and services like equities, bonds, mutual funds, real estate, precious metals, and life insurance; and average historical returns for each.
The State Bank of India was formed in 1955 by nationalizing the Imperial Bank of India. It offers a wide range of personal and corporate banking products and services. These include various deposit accounts, loans, treasury services, internet banking, and agricultural financing programs. Recently introduced products include zero balance savings accounts, minor bank accounts, and family banking packages. The bank aims to leverage digital technologies to better serve customers and facilitate business between farmers, wholesalers, and retailers.
The document discusses non-performing assets (NPAs) in the Indian banking system. It defines NPAs and outlines the different categories of assets based on their performance - standard, sub-standard, doubtful, and loss assets. Gross and net NPAs are also defined. The rise of NPAs can be attributed to both internal and external factors. Banks employ both preventive and curative strategies to manage their NPAs, such as restructuring loans, pursuing debt recovery, and using asset reconstruction companies. Tables show trends in NPAs for public sector banks, private banks, and all scheduled commercial banks from 2006-2007 to 2010-2011.
This document discusses the history and initiatives of Bank of Baroda, one of India's largest public sector banks. It traces the bank's origins back to 1908 when it was established in Baroda by the Maharaja of Baroda. Over the decades, the bank expanded both within India and internationally, growing to have over 2,700 branches across 21 countries. The document highlights some of the bank's key initiatives including expanding customer services, developing its people, strengthening finances, and advancing digitization. It recognizes the important role played by both leadership and ordinary employees in building the institution over the past century.
Bank of Baroda is the third largest public sector bank in India. It was founded in 1908 and is headquartered in Baroda. As of fiscal year 2009, it had over 3,000 branches including 70 overseas, with total assets of Rs. 2.27 trillion and net profits of Rs. 2.22 trillion. The bank focuses on increasing retail credit, maintaining high asset quality ratios, and growing its total business while protecting asset quality. Going forward, it aims to achieve 20-22% total business growth by focusing on low-cost deposits and adding 2.5-3 million new customers annually.
This document provides an overview of Axis Bank, including:
- Axis Bank was established in 1994 as the first private sector bank after reforms allowed private banks. It was jointly promoted by UTI, LIC, and other insurers.
- Axis Bank is now the third largest private sector bank in India with over 1,700 branches across the country.
- The document outlines Axis Bank's business activities, subsidiaries, promoters including UTI and LIC, and its position as one of the leading banking franchises in India.
Banking and Financial Institutions (as per UGC NET syllabus)Abbas Vattoli
a power point presentation on banking and financial institutions convering origin and history of banking in india, commercial banking classification and functions, investment banking role and initiatives, NPA warning signals and mannagement of NPA, NABARD and its rural banking innovations.
The document discusses the growth of India's financial sector. It notes that the financial sector contributes approximately 15% to India's GDP and is the second largest component after trade and transportation. The key components of the financial sector discussed are banking, insurance, capital markets, mutual funds, non-banking financial corporations, and microfinance institutions. The banking sector has seen significant growth and reforms since liberalization in 1991, with increasing deposits, assets, and branch penetration across India. The insurance and capital markets have also grown substantially in recent decades through various reforms and regulations. Overall, India's financial sector has expanded rapidly and provides important services across the country.
A case study on how Harshad Mehta scammed the entire stock market. There are certain examples and history on how he played a role as a stockbroker.
The underlined and highlighted words can be googled to further more enhance your knowledge.
ICICI Bank was founded in 1955 and has since grown to become the second largest bank in India. It offers a wide range of banking and financial services through its subsidiaries, which include ICICI Prudential Life Insurance (largest private insurer), ICICI Lombard General Insurance, ICICI Securities, and ICICI Prudential Asset Management (third largest mutual fund). Over the past 5 years, ICICI Bank has significantly grown its revenues and profits. It aims to strengthen its position in India and globally through strategic initiatives focused on retail banking, cost reductions, and maintaining its brand as the number one banking brand in India.
SKS Microfinance aims to empower the poorest of the poor in India to become self-reliant by providing financial services. Since 1998, SKS has grown to serve over 10,000 customers across 4 branches and 314 village centers, with a 99.9% repayment rate. To continue scaling its operations, SKS developed SKS MAPS, a fully integrated and automated MIS using smart cards and palm pilots to reduce transaction costs and risks associated with high-volume, low-value microloans. This technology innovation has increased productivity and streamlined information collection and reporting.
Indian Microfinance - Looking Beyond The AP Act and its Devastating Impact on...hamishbanks
The paper documents the disastrous consequences of legislation passed by Government of Andhra Pradesh in December 2010, and how this has brought about a national crisis. The legislation - the AP Act - not only undermines India’s financial inclusion agenda but also punishes the poor in every state across India. We welcome and encourage the swift passage of the upcoming microfinance Bill through Parliament, which should ultimately supersede the AP Act. While the Bill must be passed at the earliest to avoid further damaging the lives of India’s poor, the report highlights provisions in the Bill and recent RBI circular on NBFC-MFIs that threaten to undermine the Bill’s intentions. Finally, it examines the important role of the private sector in contributing to the challenge of facilitating financial inclusion to India’s 450 million unbanked citizens.
SKS Microfinance is the largest microfinance company in India, with a market share of approximately 10%. It offers microloans primarily to low-income women in rural India using the Grameen Bank model of joint liability groups. This model and SKS's focus on operational efficiency has allowed it to achieve industry-leading asset quality and low interest rates of around 25%. The IPO note recommends subscribing to the IPO given SKS's market leadership position and the large unmet demand for microfinance in India.
The document discusses the history and current state of microfinance in India. It begins with an overview of what microfinance aims to be by providing small loans to impoverished individuals. It then discusses the rise and fall of microfinance institutions (MFIs) in India, from early growth in the 1980s-2000s to over-lending issues and client suicide crises in 2010-2011. The document analyzes factors that contributed to the MFI crisis in India, including exorbitant interest rates, client coercion, a focus on high growth over responsible lending, and multiple overlapping loans leading to over-indebtedness. It concludes by discussing regulatory options and the need for sustainable microfinance models going forward.
Impact of microfinance on the indian economyMeghana Bhogle
This is a presentation i made for my first year as a management student. An overview of micro-credit and it's advantages as also the various organizations that help facilitate the same
a few slides to explain trust banks, based on info from Opportunity International Australia, part of my voluntary ambassadorship between now and June 09 http://awomansinvestment.blogspot.com
The document discusses SKS Microfinance and its work empowering the poor through microloans. SKS has provided close to $1 billion in loans to over 3.2 million members across India with a 99% repayment rate. It operates using a village-based model providing doorstep service and training. Borrowers use loans for a variety of small business and agricultural activities that can generate returns as high as 185%. SKS aims to scale its model to reach 15 million borrowers by 2011 through profitability, standardized processes adapted from business, and technology to lower costs. The document outlines SKS's growth, products, partnerships and goals to empower the poor through microfinance.
The document discusses several projects that provide services and opportunities to rural communities in India. It describes Drishtee, an organization that operates computer-based kiosks staffed by rural entrepreneurs to deliver services like computer education, digital photography, and selling products. It also discusses SKS Microfinance, one of the largest microfinance institutions in India, which provides small loans to help empower poor women and support their small businesses through a group-lending model. The document shares stories of individuals who have benefited from these programs.
Microfinance Performance in SHG Project ReportDinu05
This document discusses a study on the performance of microfinance in self-help groups (SHGs) in India. It provides background on microfinance and its role in poverty alleviation. The study aims to examine the growth of microfinance in Tamil Nadu, analyze the performance of women's SHGs and their outstanding loans. Secondary data from 2009-2012 is used for analysis through statistical tools like charts and percentage analysis. The document outlines the objectives, methodology, data sources, analysis plan and chapter structure of the study. It also acknowledges some limitations of the study.
SAKHI raises capital through:
1. Loans from Friends of Women World Bank at an annual interest rate of 13.5%
2. Group guarantees followed by center guarantees for loans provided to members
3. Upfront loan processing fees of 2% charged to borrowers
SAKHI provides microloans ranging from Rs. 3,000 to Rs. 15,000 to economically disadvantaged individuals through a systematic organizational structure and loan disbursement process.
This document is a research project report submitted in partial fulfillment of an MBA degree. It examines the impact of microfinance on the living standards, empowerment and poverty alleviation of poor women in North India. The report includes a declaration by the student, acknowledgements of those who assisted and supervised the project, and an introduction providing context on microfinance and its goals. It also outlines the chapters to follow, which will cover a literature review on previous research conducted on microfinance and its effects, as well as subsequent chapters analyzing and discussing the results of the student's case study research.
This document is a project report submitted by Mitesh Ghiya to the University of Rajasthan in partial fulfillment of a Bachelor of Business Administration degree. The report provides a financial overview of the telecom sector in India, with a focus on Bharat Sanchar Nigam Limited (BSNL). The report includes sections on financial analysis, BSNL's profile, research methodology, a SWOT analysis, conclusions, and suggestions. Mitesh Ghiya conducted the project under the guidance of Dr. Dileep Singh to analyze BSNL's financial performance and strategies in the competitive telecom industry.
The document is a dissertation submitted by Supriya Kumari in partial fulfillment of a PGPBM degree from the International School of Business & Media in Pune, India. The dissertation analyzes the market potential for Samsung CDMA mobile phones in the Mumbai region of India. It includes an introduction covering the mobile market in India and Samsung's business, a description of the research design and data collection through retailer interviews, and an analysis of the collected data on market shares and consumer demand for various CDMA phone brands like Samsung, LG, Haier, and Spice.
This project report is submitted by Jitender Sharma, a student of B.B.A. III year at S.D. College in Panipat, in partial fulfillment of the requirements for a B.B.A. degree from Kurukshetra University. The report is about Panjab National Bank and was conducted under the guidance of Mr. Jitender Sharma. Jitender declares that the report is his original work and has not been submitted elsewhere. He thanks his professor and parents for their support and guidance during the project.
This document provides a summary of Non-Banking Financial Companies (NBFCs) in India. It defines what an NBFC is, outlines the key types of NBFCs such as asset finance companies, loan companies, investment companies, and microfinance institutions. It also describes important NBFC concepts like capital adequacy requirements, classification of assets, and the regulations applicable to different categories of NBFCs. The document is intended to serve as a quick guide to NBFCs in India.
NBFC - Non Banking Financial Company/ Non Banking Financial Corporation are companies registered under the Companies Act, 1956
Engaged in the business of
- loans and advances
-acquisition of shares
-stocks
-bonds
-debentures
-securities
but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of immovable property
This document provides an overview of non-banking financial companies (NBFCs) in India. It defines NBFCs and outlines their role in the Indian financial system. It also describes the different types of NBFCs according to the Reserve Bank of India's classification system and summarizes the eligibility criteria, differences between NBFCs and banks, and the role of the RBI in regulating NBFCs. The document is intended to educate a group of students on the topic of NBFCs in India.
Non Banking Financing Companies PresentationAnkur Aggarwal
Non-bank financial companies ( NBFCs ) are financial institutions that provide banking services without meeting the legal definition of a bank, i.e. one that does not hold a banking license. These institutions typically are restricted from taking deposits from the public depending on the jurisdiction. Nonetheless, operations of these institutions are often still covered under a country's banking regulations.
Enterslice help you to Incorporate NBFC Company in india.we also provide software to manage NBFC Business like NBFC Software,NBFC-ND Compilance,Money Changer Compilance,funding in NBFC and takeover of NBFC.
This document provides an overview of non-banking financial companies (NBFCs) in India. It defines what an NBFC is, compares them to banks, and outlines the various types of NBFCs such as equipment leasing companies, hire purchase companies, and investment companies. The document also summarizes regulations for NBFCs regarding accepting public deposits, prudential norms, eligibility criteria, books and records, and the importance of NBFCs in channeling financial resources. Overall, the document presents the key characteristics of NBFCs operating in India and the regulatory framework that governs them.
A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 2013 or 1956 carrying on the business listed under Section 45 I (c ) of the RBI Act, 1934, i.e.
This document provides information about non-banking financial companies (NBFCs) in India. It defines NBFCs as non-banking institutions that conduct lending, acquisition, and leasing activities but do not accept demand deposits. NBFCs are divided into categories including asset finance companies, investment companies, and loan companies. Key differences between NBFCs and banks are that NBFCs cannot accept demand deposits or issue checks. The Reserve Bank of India regulates NBFCs and places restrictions on their acceptance of public deposits.
August 2015 Edition of BEACON, A Monthly Newsletter by SIMCON.
Inside this issue:
About Us
Our Team
INDUSTRY ANALYSIS : NBFC Industry
COMPANY ANALYSIS : HDFC Bank
BRAND ANALYSIS : Rolex
Concept of the month: Pricing Myopia
NBFCs are non-banking financial companies that are registered under the Companies Act and engage in financial activities such as lending, acquisition of shares/bonds, leasing, insurance, etc. but do not include institutions conducting agricultural/industrial activities or selling goods/services. NBFCs are regulated by the Reserve Bank of India and must register with RBI to operate. They are classified based on whether they accept public deposits and their asset size. Over time, various committees have shaped the regulatory framework for NBFCs in India to strengthen governance, disclosure, and supervision.
This document provides an overview of small and medium enterprises (SMEs) in India. It defines different types of SMEs based on investment levels and discusses their importance to employment, exports, and the overall economy. The document also outlines some inherent advantages and weaknesses of SMEs, and discusses the role of the government and banks in supporting SME financing and development. It provides recommendations from various committees on improving SME access to credit.
CBLO is a money market instrument that allows entities access to borrow and lend funds against securities for short periods of 1 day to 1 year. It involves CCIL acting as an intermediary between the borrower and lender. Capital employed represents the total long-term funds from shareholders and creditors used in a business. It is used to calculate return on capital employed (ROCE). A qualified institutional buyer (QIB) is an institution that can privately purchase securities from listed companies to help companies raise funds within India's domestic market. The statutory liquidity ratio (SLR) is the minimum fraction of deposits that banks must maintain as liquid assets like government securities and cash.
This document provides an overview of non-banking financial companies (NBFCs) in India, including what an NBFC is, the regulatory framework, and types of NBFCs. Some key points:
- An NBFC is a non-banking institution that conducts financial services like lending, acquiring stocks/securities, hire purchase, etc. but cannot accept demand deposits.
- NBFCs are regulated by the Reserve Bank of India and must register with RBI to operate.
- NBFCs are classified based on whether they accept deposits from the public, their asset size, and type of business (loan, investment, infrastructure finance etc.).
- Regulations on NBFCs are
Corporate India - Distress Resolution Solutions Sumedha Fiscal
The Indian Banking scenario is going through unprecedented times with stressed loan portfolio. The portfolio of all Banks put together is more than 7 lakh crore which is > 10% of total advances and there is an apprehension that there could be significant additions too.
Realizing the problem RBI has come out with many changes and schemes to tackle such stressed accounts.
Here are come of the distress resolution solutions that you can look into.
The document provides an overview of the banking industry in India. It discusses key points:
- The Reserve Bank of India (RBI) acts as the central bank and regulates monetary policy, banking supervision, foreign exchange and more.
- India has a multi-tiered banking structure including retail banking for consumers, international banking, and wholesale banking for large corporations.
- Banks in India must follow regulations around capital requirements, priority sector lending targets, and controlling non-performing assets.
- Performance is measured using metrics like capital adequacy, asset quality, management efficiency, earnings quality, and more.
The document discusses the guidelines for private sector banks and multinational banks in India. It provides an introduction to the need for privatization of banks in India in the 1980s due to issues with public sector banks like high costs, overstaffing, and poor management. It then outlines the guidelines for establishing private banks in India, including a minimum initial capital requirement of Rs. 100 crore and requirements regarding ownership and governance. The document also discusses the benefits of privatization, including increased branches and credit to priority sectors. It provides an overview of foreign banks operating in India and Indian banks operating abroad, along with challenges faced by overseas branches like inadequate capital.
Complete Guide on NBFC (Non-Banking Financial Company) RegistrationASC Group
NBFC stands for Non-Banking Financial Company. It is a financial institution that provides banking services without having a banking license. NBFCs typically provide a wide range of financial services, such as lending, investments, financial leasing, hire purchase, insurance, and other related activities.
Making NBFCs relevant to ‘Make-in India’& ‘Start-up India, Stand-up India’ - ...Resurgent India
The dynamic and evolving NBFC sector necessitates reforms and evolution to ensure orderly growth. While NBFCs have been on the growth trajectory over the years, there are few areas of concern which need to be addressed. The key challenges have been highlighted below:
Fixed charge attaches to specific assets while floating charge covers all assets including future assets. Floating charge crystallizes on the happening of an event like default.
Fixed charge attaches to specific assets while floating charge covers all assets including future assets. Floating charge crystallizes on the happening of an event like default.
STREETONOMICS: Exploring the Uncharted Territories of Informal Markets throug...sameer shah
Delve into the world of STREETONOMICS, where a team of 7 enthusiasts embarks on a journey to understand unorganized markets. By engaging with a coffee street vendor and crafting questionnaires, this project uncovers valuable insights into consumer behavior and market dynamics in informal settings."
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
South Dakota State University degree offer diploma Transcriptynfqplhm
办理美国SDSU毕业证书制作南达科他州立大学假文凭定制Q微168899991做SDSU留信网教留服认证海牙认证改SDSU成绩单GPA做SDSU假学位证假文凭高仿毕业证GRE代考如何申请南达科他州立大学South Dakota State University degree offer diploma Transcript
Abhay Bhutada, the Managing Director of Poonawalla Fincorp Limited, is an accomplished leader with over 15 years of experience in commercial and retail lending. A Qualified Chartered Accountant, he has been pivotal in leveraging technology to enhance financial services. Starting his career at Bank of India, he later founded TAB Capital Limited and co-founded Poonawalla Finance Private Limited, emphasizing digital lending. Under his leadership, Poonawalla Fincorp achieved a 'AAA' credit rating, integrating acquisitions and emphasizing corporate governance. Actively involved in industry forums and CSR initiatives, Abhay has been recognized with awards like "Young Entrepreneur of India 2017" and "40 under 40 Most Influential Leader for 2020-21." Personally, he values mindfulness, enjoys gardening, yoga, and sees every day as an opportunity for growth and improvement.
Enhancing Asset Quality: Strategies for Financial Institutionsshruti1menon2
Ensuring robust asset quality is not just a mere aspect but a critical cornerstone for the stability and success of financial institutions worldwide. It serves as the bedrock upon which profitability is built and investor confidence is sustained. Therefore, in this presentation, we delve into a comprehensive exploration of strategies that can aid financial institutions in achieving and maintaining superior asset quality.
Unlock Your Potential with NCVT MIS.pptxcosmo-soil
The NCVT MIS Certificate, issued by the National Council for Vocational Training (NCVT), is a crucial credential for skill development in India. Recognized nationwide, it verifies vocational training across diverse trades, enhancing employment prospects, standardizing training quality, and promoting self-employment. This certification is integral to India's growing labor force, fostering skill development and economic growth.
New Visa Rules for Tourists and Students in Thailand | Amit Kakkar Easy VisaAmit Kakkar
Discover essential details about Thailand's recent visa policy changes, tailored for tourists and students. Amit Kakkar Easy Visa provides a comprehensive overview of new requirements, application processes, and tips to ensure a smooth transition for all travelers.
Economic Risk Factor Update: June 2024 [SlideShare]Commonwealth
May’s reports showed signs of continued economic growth, said Sam Millette, director, fixed income, in his latest Economic Risk Factor Update.
For more market updates, subscribe to The Independent Market Observer at https://blog.commonwealth.com/independent-market-observer.
Fabular Frames and the Four Ratio ProblemMajid Iqbal
Digital, interactive art showing the struggle of a society in providing for its present population while also saving planetary resources for future generations. Spread across several frames, the art is actually the rendering of real and speculative data. The stereographic projections change shape in response to prompts and provocations. Visitors interact with the model through speculative statements about how to increase savings across communities, regions, ecosystems and environments. Their fabulations combined with random noise, i.e. factors beyond control, have a dramatic effect on the societal transition. Things get better. Things get worse. The aim is to give visitors a new grasp and feel of the ongoing struggles in democracies around the world.
Stunning art in the small multiples format brings out the spatiotemporal nature of societal transitions, against backdrop issues such as energy, housing, waste, farmland and forest. In each frame we see hopeful and frightful interplays between spending and saving. Problems emerge when one of the two parts of the existential anaglyph rapidly shrinks like Arctic ice, as factors cross thresholds. Ecological wealth and intergenerational equity areFour at stake. Not enough spending could mean economic stress, social unrest and political conflict. Not enough saving and there will be climate breakdown and ‘bankruptcy’. So where does speculative design start and the gambling and betting end? Behind each fabular frame is a four ratio problem. Each ratio reflects the level of sacrifice and self-restraint a society is willing to accept, against promises of prosperity and freedom. Some values seem to stabilise a frame while others cause collapse. Get the ratios right and we can have it all. Get them wrong and things get more desperate.
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
1. Group-3
Roll No Name
A037 Akshiv Pathania
A045 Apoorv Sarwahi
A047 Sameer Sehgal
A050 Karan Shah
A051 Kush Sharma
2. Agenda
NBFC: Introduction
Regulations
Micro Finance Industry : Overview
SKS MicroFinance: Overview & Business
Malegam Committee Recommendations
SKS: Valuation
Auction
IPO Launch
Turnaround
Financial Statements : 2008-14
Performance analysis: Post- IPO Period
New Initiatives
Latest Developments
3. NBFC : Introduction
A Non-Banking Financial Company (NBFC) is a company
Registered under the Companies Act, 1956
Its principal business is lending, investments in various types of
shares/stocks/bonds/debentures/securities, leasing, hire-purchase, insurance business, chit
business
Its principal business is receiving deposits under any scheme or arrangement in one lump
sum or in instalments
Entry Point Norms (in effect since April 1999):
i. All new NBFCs were required to have a minimum NOF of Rs. 2 crore in order to register
with the RBI
ii. Minimum asset size of Rs. 25 crore
iii. Fulfils the Principal Business Criteria (PBC):
a) A company not accepting deposits, will qualify for registration as NBFC if and when its
financial assets aggregate Rs 25 crore and constitute 75 per cent and above of its
total assets and financial income constitutes 75 per cent or above of its gross income
b) Financial entities having asset size of Rs.1000 crore or above, holding financial assets
which constitute 50% of the total assets OR generate financial income which as a
proportion of the gross income is at least 50%, will need to be registered and
regulated by the Bank
4. Categories of NBFC
Categories of NBFCs
1. Asset Finance Company (AFC)
2. Investment Company (IC)
3. Loan Company (LC)
4. Infrastructure Finance Company (IFC)
5. Core Investment Company (CIC)
6. Infrastructure Debt Fund- Non-Banking Financial Company (IDF-NBFC)
7. Non-Banking Financial Company - Micro Finance Institution (NBFC-MFI)
An NBFC-MFI is a non deposit taking NBFC that fulfils the following
conditions:
1. Minimum Net Owned Funds of Rs.5 cr ore. (For NBFC-MFIs registered in the North East Rs. 2
crore )
2. Not less than 85% of its net assets are in the nature of qualifying assets
3. Further the income an NBFC-MFI derives from the remaining 15 percent of assets shall be in
accordance with the regulations specified in that behalf
4. An NBFC which does not qualify as an NBFC-MFI shall not extend loans to micro finance
sector, which in aggregate exceed 10% of its total assets
5. Regulations for NBFC-MFI
Capital Adequacy ratio:
Maintain a capital adequacy ratio of atleast 15%.
The total of Tier II Capital at any point of time, shall not exceed 10 0 percent of Tier I Capital
Asset Classification Norms
Standard asset: No default in repayment of principal or payment of interest
Nonperforming asset: Interest/principal payment has remained overdue for a period of 90
days or more
Standard assets - Overdue for less than 8 weeks
Sub-standard assets - Overdue for more than 8 weeks upto 25 weeks
Loss assets - Overdue for more than 25 weeks
The aggregate loan provision to be maintained by NBFC-MFIs at any point of time shall not be less
than the higher of:
1% of the outstanding loan portfolio
50% of the aggregate loan instalments which are overdue for more than 90 days and less than 180 days and
100% of the aggregate loan instalments which are overdue for 180 days or more
All NBFC-MFIs shall maintain an aggregate margin cap of not more than 12%
With effect from 1st April, 2014 margin caps as defined by Malegam Committee may not exceed
10 per cent for large MFIs (loans portfolios exceeding Rs.100 crore) and 12 per cent for the others.
6. Regulations for NBFC-MFI
Formation of Self-Regulatory Organization (SRO)
The Malegam Committee recommends greater responsibility on industry associations
All NBFC-MFIs will have to become member of at least one SRO recognized by the RBI and
comply with the Code of Conduct prescribed by the SRO
To be recognised as an SRO, it should have independent directors comprising at least a third
of its board, representation of both small and large micro-lenders on the governing council, a
compliance officer employed and paid by the SRO but directly responsible to the RBI
7. Growth Phases of Indian Microfinance
Sector
Phase I -
Growth
• Characterised by High Growth
• Large availability of funds including debt and equity
• Low entry barriers
• Ended with AP ordinance in October 2010
Phase II -
Volatility
• Highly volatile period from October 2010 till 2011
•MFIs experienced funding constraints
• Deterioration in asset quality
Phase III -
Consolidation
• Consolidation phase in operations by MFIs with regulatory intervention in 2011
• Curtailed expansion plans and changed business model
• Resumption of funding from banks and equity infusion from PE/social sector funds
Phase IV –
Stable Growth
• Stable growth expected with regulatory framework in place
• Other State governments not following the AP ordinance route
•Margins are expected to stabilize and profitability improve
9. SKS Microfinance: Overview
Constraints: (3 C’s)
Lack of Capital
Capacity constraints
High Cost of delivering micro-loans
1997
• Swayam Krishi Sangam
– SKS NGO
1998
• 1st Loan
2002
• ~5000 borrowers
2005
• NGO to for profit- NBFC
2007
• Half a Million
customers
2010
• IPO Launch
Innovative Principles:
Profit- Oriented Model
Leveraging Industry Best Practices
Technology for Automation
Performance :
3rd largest MFI
Operations in ~300 districts
5,021,000 members in FY13
Portfolio outstanding ~ INR 2350 Cr
in FY13
10. SKS Microfinance: Business Model
Joint Liability Groups:
Pioneered by Grameen Bank
Lending to individual women,
utilizing five member groups
where groups serve as the
ultimate guarantor for each
member
High Repayment Ratio of 98%
Because of Social Pressure
Group
Formation
Sangam
Formation
&
Borrowing
Member
invests in
enterprise
s
Sangam
Size
Increases
Repaymen
t of Loans
Product Portfolio:
Income Generation Loan
Mid Term Loan
Mobile Loan
Gold Loan
Housing Loan
Characteristics:
Small Ticket loans
Short duration loans
Higher rate of interest
High Frequency of Repayment
11. Malegam Committee
RBI formed a sub-committee on October 15, 2010.
Consisted of 6 members including Shri Y. H. Malegam and Shri
Kumar Mangalam Birla.
Microfinance is an economic development tool whose
objective is to assist the poor to work their way out of poverty.
It covers a range of services which include, in addition to the
provision of credit, many other services such as savings,
insurance, money transfers, counseling, etc
The committee focused on provision of credit.
12. Recommendations
Recommendation #1: New Category of NBFC called NBFC MFIs
“A company (other than a company licensed under Section 25
of the Companies Act, 1956) which provides financial services
pre-dominantly
to low-income borrowers
with loans of small amounts,
for short-terms,
on unsecured basis,
mainly for income-generating activities,
with repayment schedules which are more frequent than those
normally stipulated by commercial banks and
which further conforms to the regulations specified in that behalf”
13. Recommendations
Recommendation #2: NBFC to satisfy certain conditions to be
classified as NBFC MFI
Not less than 90% of its assets are in the qualifying assets
Loan given to individual whose income does not exceed Rs 50,000/annum
The amount of loan doesn’t exceed Rs 25,000 and total outstanding
indebtedness doesn’t increase by Rs 25,000
The tenure of the loan is greater than 12 months for loan till Rs 15,000 and 24
months for others
The loan is without collateral
The loan is repayable by weekly, fortnightly or monthly
The income it derives from remaining assets should be in accordance with
the norms
NBFC which is not a NBFC-MSI should not be permitted to give loans to
the microfinance sector, which in aggregate exceed 10% of its total assets.
14. NABARD
It was established on recommendation of Shivaraman
Committee on July 12, 1982 to implement NBARD Act 1981.
It replaced the following
Agricultural Credit Department (ACD) and Rural Planning and
Credit Cell (RPCC) of RBI
Agricultural Refinance and Development Corporation (ARDC)
RBI sold its 71.5% stake in NABARD to the GOI which holds 99%
stake in 2010.
NABARD is the apex institution in the country which looks after
the development of the cottage industry, small industry and
village industry, and other rural industries.
15. Valuation
Requirement of Additional Capital:
Fast growth of customers
Equity financing requirement jumped to $12 mn in 2009
Regulations to maintain CAR of 9%
25% of equity should be held by Indian investors
SKS decided to conduct an auction & made a list of potential investors.
How to set a Valuation for SKS ?
Use comparable firms
Non-availability
Hire an Investment Banker
Lack of experience in MFI sector
Senior management built their own model to set a value.
16. Valuation
Branch Valuation model:
Approach:
Build simple model of branch earnings
Consider how this value will change as branch matures
Estimate growth rate of no. of new branch and HQ expenses to
calculate future earnings
Inputs :
Average size of Loan,
Growth parameters – New clients and Branches, Loan Size
Output:
Projected Balance sheet and Income Statement
Challenges:
Difficult to predict forecasting growth rate
17. Branch Valuation Model
Expense:
Financing Cost:
Cost of borrowings: 15% p.a.
Provisions for loan loss: 2% p.a.
SG&A Expenses per branch :
Branch Operations:
• Salaries: Rs. 2,28,000 p.a.
• Bonus : up to 60% of salaries
• Other : Rs. 2,49,600 p.a.
• CapEx : Rs. 1,22,000 p.a.
HQ operations:
• Executive Salaries, MIS, HR &
Audit : Rs. 2,16,00,000 p.a.
Income:
LPF : 1-2%
Rate of Interest: Average 23.6%
Interest Margin: ~ 8%
Assumptions:
No. of Clients: 4000
Avg. Size of loan : Rs. 7000
Loan size growth rate: 0 %
Tax rate : 35%
Terminal Growth rate: 5% after 2
years
Rate of Discount: 16%
Final Value using WACC approach: ~Rs. 400 mn ($ 8 mn)
Based on this primary value, SKS asked potential investors to bid to get equity stake.
Bidder has to submit term sheet which consists of his/her valuation of company and
desired share of the post-money firm.
18. Auction: Offers and Terms
Name Pre- Money
Valuation(USD
Millions)
Amount of
investment
(USD Millions)
Desired Stake Terms
Bombay
Brokers
18.3 3 11.41% None
Global Bank 15.5 8 34% IPO in 36
months
Sequoia 15.3 8 34.78% Preferred Stock
India Ventures 10 3.5 NA None
Tri Partners 14 2.25 10.25% IPO in 60
months
Highest Valuation offered with a minimum stake of 11.41%
No terms and Conditions
No mentorship and contacts
Did not meet the funding requirements
Desired one of the highest stake as compared to the bidders
The funding met the SKS requirement
Terms of coming with an IPO in 36 months
Desired the highest stake as compared to the bidders
The funding met the SKS requirement
Terms of having a preferred stock arrangement
Desired the lowest stake
Tri Partners had a condition to come up with an IPO in 60 months
Did not meet the funding requirements
Funding would increase the leverage of SKS
19. Qualitative Comparison
Criteria Bombay Brokers Global Bank Sequoia India Ventures Tri Partners
SKS scaling 1 4 4 3 3
Domestic Equity 5 1 4 2 2
Comfort 1 2 5 5 5
Low interference 5 2 2 2 2
Investments in
other MFIs
1 4 1 1 1
Control 1 3 4 2 2
Commitment to
Social Mission
1 3 2 2 2
Brand
Recognition
1 4 5 3 3
Presence in India 4 1 4 3 3
Desired Stake 1 4 5 1 2
Total 21 28 36 24 25
Rating Scale used 1 to 5 where 1 is the lowest score and 5 being the highest score
20. SKS IPO
Date of the IPO: 28 July to 2 August 2010
First day of Trading: 16 August 2010
Issue Size: US$350 million, of which US$155 million were fresh equity shares and
US$195 million, were stock sales from existing shareholders representing a
combined total of 23.3 percent of post-IPO shares.
Market Capitalization of SKS: US$1,525 million (as of IPO close on 2 August 2010)
Structure: 60 percent of shares sold to institutional investors (qualified
institutional buyers [QIBs]), 30 percent to retail investors, and 10 percent to non
institutional investors, primarily high net worth individuals.
Promoters: MBTs, Kismet, Sequoia Capital and Unitus
Anchor Investors: SKS secured an initial US$64 million from a group of 18 anchor
investors who agreed to buy 18 percent of the offering at the top of the offering
window of INR 985 per share. The anchors included JP Morgan, Morgan Stanley,
India ICICI Prudential, Reliance Mutual Fund, and George Soros’ Quantum Fund.
They are required to hold the shares for at least 30 days.
Stock Exchanges: Bombay Stock Exchange (BSE) and National Stock Exchange (NSE)
Trading Symbol: SKSMICRO
21. 2010 Crisis & Turnaround Strategy
Factors that led to 2010 Crises :
A hyper-competitive environment devoid of regulation,
High interest rates generating abnormal returns,
Debt accumulation compounded by multiple borrowing – (Average borrower’s debt
balance more than doubled),
MFI’s focus for-profit mainstream operations did not gel with the claim of eradicating
poverty
Intense Competition and no price war led to process dilution – (400-600 companies and
everyone was charging 31-32%)
End Result - The entire MFI sector was engulfed in widespread allegations of harassment
of clients by recovery agents and borrower suicides in AP
Andhra Pradesh Micro Finance Institutions (Regulation of Money lending) Act, 2010
The key features of the Bill were :
• All MFIs should be registered with the district authority.
• No person should be a member of more than one SHG.
• All MFIs shall make public the rate of interest charged by them on the loans extended.
• There would be a penalty on the use of coercive action by the MFIs.
• Any person who contravenes any provision of the Ordinance shall be punishable with
imprisonment for a period of 6 months or a fine up to the amount of Rs 10,000, or both.
22. 2010 Crisis & Turnaround Strategy
Dark times for SKS Microfinance
SKS Microfinance Ltd saw a 91% erosion of its share value from its peak on 28
September 2010 till 2013.
It experienced Drop off in loan collections and a drying up of funding
Its loan portfolio in A.P shrunk to zero in 2nd quarter of 2013 from a high of Rs. 1,491
crore at the start of crisis in October 2010.
Collection levels in AP dropped to 5%, forcing SKS to shrink its loan book in other states
and use the money to provide for the AP bad loans.
SKS reported a loss of Rs 1,360 crore in FY12.
Exit of Vikram Akula after Andhra Pradesh Micro Finance Institutions Act, 2010
Turnaround of SKS Microfinance
On account of the turnaround strategy, SKS Microfinance had four consecutive quarters
of profit -- a profit after tax (PAT) of Rs 1.2 crore in Q3-FY13, Rs 2.7 crore in Q4-FY13, Rs 5
crore in Q1-FY14 and Rs 16.3 crore in Q2-FY14
The lending portfolio grew sequentially by 11 per cent to Rs 1,320 crore from the non-
AP regions in the fourth quarter of 2011-12, with 95 per cent collections on an average.
The collection efficiency in 16 non-AP states has further improved to 99.9% and cost of
borrowing has come down
23. 2010 Crisis & Turnaround Strategy
Turnaround Strategy
Building blocks of SKS’s turnaround strategy were -
• Fully providing for the Andhra Pradesh exposure,
• Managing the supply side shock,
• Optimizing the cost structure,
• Insulating the non-Andhra Pradesh portfolio from contagion,
• Recapitalization and return to profitability.
Key focus areas were - Consolidation of its customer base, cross-selling initiatives and
diversification and increased collection efficiency
Limiting Exposure to any single state to 15% of the total portfolio outstanding and to
50% of the reported net worth - The exposure to AP reduced to Rs 236 crore or 15 per
cent of the loan portfolio as of March 2012.
Structural Readjustment—branch and headcount rationalization—Reducing number of
branches and employee headcount
De-risking strategy along with the geographical de-risking - SKS diversified its lending to
include financing of small kiranas, loans for purchase of mobile handsets and gold loans
and came with insurance products as de-risk products
SKS opted not to go in for the corporate debt restructuring package, and repaid its Rs
3,800 crore debt without delay and raised Rs 230 crore from institutional investors in
QIP
28. Performance: post-IPO period
24%
16%
6% 11%
38%
5%
Market Share
SKS MicroFin
Spandana
Share Microfin
Asmitha
Microfin
Kshetra
Dharmasthala
Other
Source: Moneycontrol
In FY13, Company was among the
top three MFIs in terms of client
outreach, total value of loans
disbursed, Gross Loan Portfolio
outstanding and number of
branches.
2012-Debacle
(Source: MFIN Micrometer, as on March 31, 2013)
29. SKS Microfinance: New Initiatives
SKS currently reaches over 1 lakh villages in India with a presence in 15 states through
its 1256 branches, to provide more financial services to the bottom of the pyramid by
leveraging its extensive branch network and financing ability
Solar Lamps Financing Program
Indian homes traditionally use kerosene lamps to light up their homes
Prolonged exposure to fumes and harmful particles dangerous to health
SKS partnered with d.light solar to make solar lamps available to its members
Pilot initiative in 10 branches across 2 states, estimated to reach 475 branches in FY15
Mobile Financing Program
High potential in mobile telephony, but high costs deterrent to rural borrowers of SKS
SKS partnered with Nokia India Pvt Ltd. to supply handsets to its borrowers
Loan product has been designed to facilitate the process of disbursement of mobile handsets
Under this program, SKS has disbursed 3.5 lakh mobile loans to its borrowers in 6 states in India
Gold Loan
Gold Loan pilot launched under the name of “Swarnapushpam”
Provide personal/business loans to our members for meeting their short-term liquidity requirements
Loans secured by gold jewellery ranging from Rs.2000 to Rs.1,00,000
Pilot extended to 40 branches across states of Karnataka, Maharashtra and UP
Gold Loan portfolio stood at Rs 55.9 crore, representing 2.4% of total outstanding loan portfolio at the end
of FY13
30. SKS Microfinance: Latest Developments
SKS announced a reduction of interest rate charged from borrowers by 100
basis points from 24.55% to 23.55% with effect from 1 October
Rs.400 crore capital raised in May through a qualified institutional placement
(QIP) route