INDUSTRY PROFILE

Historically, the Indian government has pursued a cautious policy with regard to financing
budgets, allowing only small amounts of deficit spending. Budget deficits increased in the late
1980s, and the necessity of financing these deficits from foreign borrowing contributed to the
1990 balance of payments crisis. The central government budget deficit reached 8.4 percent of
GDP in FY 1990, up from 2.6 percent in FY 1970, 5.9 percent in FY 1980, and 7.8 percent in FY
1989. The deficit was cut to 5.9 percent in FY 1991 and 5.2 percent in FY 1992, but widened to
7.4 percent in FY 1993. It was expected to recede to 6.2 percent in FY 1995.
The central government's budget deficits during the 1980s increased the total public debt rapidly
until in FY 1991 it stood at Rs3.9 trillion. The bulk of this debt was owed to citizens and
domestic institutions and firms, particularly the central bank. Readers of Indian monetary
statistics should be alert to the use of the terms lakh (see Glossary) and crore (see Glossary),
which are used to express higher numbers.
India Monetary Process
The basic elements of the financial system were established during British rule (1757-1947). The
national currency, the rupee, had long been used domestically before independence and even
circulated abroad, for example, in the Persian Gulf region. Foreign banks, mainly British and
including some from such other parts of the empire as Hong Kong, provided banking and other
services. The Reserve Bank of India was formed in 1935 as a private bank, but it also carried out
some central bank functions. This colonial banking system, however, was geared to foreign trade
and short-term loans. Banking was concentrated in the major port cities.
The Reserve Bank was nationalized on January 1, 1949, and given broader powers. It was the
bank of issue for all rupee notes higher than the one-rupee denomination; the agent of the
Ministry of Finance in controlling foreign exchange; and the banker to the central and state
governments, commercial banks, state cooperative banks, and other financial institutions. The
Reserve Bank formulated and administered monetary policy to promote stable prices and higher
production. It was given increasing responsibilities for the development of banking and credit
and to coordinate banking and credit with the five-year plans. The Reserve Bank had a number
of tools with which to affect commercial bank credit.
After independence the government sought to adapt the banking system to promote development
and formed a number of specialized institutions to provide credit to industry, agriculture, and
small businesses. Banking penetrated rural areas, and agricultural and industrial credit
cooperatives were promoted. Deposit insurance and a system of postal savings banks and offices
fostered use by small savers. Subsidized credit was provided to particular groups or activities
considered in need and which deserved such help. A credit guarantee corporation covered loans
by commercial banks to small traders, transport operators, self-employed persons, and other
borrowers not otherwise effectively covered by major institutions. The system effectively
reached all kinds of savers and provided credit to many different customers.
The government nationalized fourteen major private commercial banks in 1969 and six more in
1980. Nationalization forced commercial banks increasingly to meet the credit requirements of
the weaker sections of the nation and to eliminate monopolization by vested interests of large
industry, trade, and agriculture.
The banking system in India expanded rapidly after nationalization. The number of bank
branches, for instance, increased from about 7,000 in 1969 to more than 60,000 in 1994, two-
thirds of which were in rural areas. The deposit base rose from Rs50 billion in 1969 to around
Rs3.5 trillion in 1994. Nevertheless, currency accounted for well over 50 percent of all the
money supply circulating among the public. In 1992 the nationalized banks held 93 percent of all
deposits.
In FY 1990, twenty-three foreign banks operated in India. The most important were ANZ
Grindlays Bank, Citibank, the Hongkong and Shanghai Banking Corporation, and Standard
Chartered Bank.
Public-sector banks in India are required to reserve their lending based on 40 percent of their
deposits for priority sectors, especially agriculture, at favorable rates. In addition, 35 percent of
their deposits have to be held in liquid form to satisfy statutory liquidity requirements, and 15
percent are needed to meet the cash reserve requirements of the Reserve Bank. Both these
percentages represent an easing of earlier requirements, but only a small proportion of public-
sector banks' resources can be deployed freely. In late 1994, the rate of interest on bank loans
was deregulated, but deposit rates were still subject to ceilings.
More than 50 percent of bank lending is to the government sector. With the onset of economic
reform, India's banks were experiencing major financial losses as the result of low productivity,
bad loans, and poor capitalization. Seeking to stabilize the banking industry, the Reserve Bank of
India developed new reporting formats and has initiated takeovers and mergers of smaller banks
that were operating with financial losses.
India has a rapidly expanding stock market that in 1993 listed around 5,000 companies in
fourteen stock exchanges, although only the stocks of about 400 of these companies were
actively traded. Financial institutions and government bodies controlled an estimated 45 percent
of all listed capital. In April 1992, the Bombay stock market, the nation's largest with a market
capital of US$65.1 billion, collapsed, in part because of revelations about financial malpractice
amounting to US$2 billion. Afterward, the Securities and Exchange Board of India, the
government's capital market regulator, implemented reforms designed to strengthen investor
confidence in the stock market. In the mid-1990s, foreign institutional investors took greater
interest than ever before in the Indian stock markets, investing around US$2 billion in FY 1993
alone.
Despite increases in energy costs and other pressures from the world economy, for most of the
period since independence India has not experienced severe inflation. The underlying average
rate of inflation, however, has tended to rise. Consumer prices rose at an annual average of 2.1
percent in the 1950s, 6.3 percent in the 1960s, 7.8 percent in the 1970s, and 8.5 percent in the
1980s.
Three factors lay behind India's relative price stability. First, the government has intervened,
either directly or indirectly, to keep stable the price of certain staples, including wheat, rice,
cloth, and sugar. Second, monetary regulation has restricted growth in the money supply. Third,
the overall influence of the labor unions on wages has been small because of the weakness of the
unions in India's labor surplus economy.

The top finance companies are playing a key role in the huge growth of the economy of India.
The sector of finance is passing through a rapid phase of alteration. The sustenance of the growth
of economy is the primary factor for the development of the India's financial sector. The best
financial companies in India are the following:
SBI Capital Markets Limited:
It is one among the oldest organizations in the capital markets sector of India. It was established
in the year 1986 as an ancillary of SBI.It ranks second in Asia's Project Advisory services. The
company is a traiblazer in privatization and securitisation. The companies subsidiaries are
SBICAPs Ventures Ltd., SBICAP Trustee Co.Ltd. And many others.

Bajaj Capital Limited:
The company offers best investment advisory and financial planning. It provides institutional
investors, NRIs, corporate houses, individual investors , high network clients with investment
advisory and financial planning services. It is also the largest provider of finance products
offered by public and private organizations,several government bodies,investment products like
bonds,mutual funds,general insurance etc.
DSP Meriyll Lynch Limited:
It is the key player of equity and debt securities in India. It renders financial advises to many
corporations and institutions. It also offers a wide array of wealth management and investor
services along with customized advices related to financial matters. This company is the pioneer
to form research facility to research in financial products and services,improvements and
innovations. The company also has its hand in the Government securities and holds an eminent
position in the market of equity and debt in India.
Birla Global Finance Limited:
It is a subsidiary of Aditya Birla Nuvo Ltd. Their motto is to be the first choice of the customers
as a major provider of financial services through technology and value creation. The primary
activities of the company are Corporate Finance and Capital Market. Aditya Birla Nuvo has also
formed alliane with Sun Life Financial of Canada which has given rise to the following financial
services companies like Birla Sun Life Insurance Co Ltd., Birla Sun Life Distribution Co. and
many others.
Housing Development Finance Corporation:
This company offers the best financial solutions and guidance for home loans,property related
services,loans for NRIs etc. in India. The one stop destination for comprehensive information on
personal finance is HDFC. The company has a wide network in India and abroad. HDFC
overseas offices are in Singapore,Kuwait,Qatar,Saudi Arabia and many others.
PNB Housing Finance Limited:
This is completely owned by PNB and offers premium solutions to relieve the borrowers. This
subsidiary of the PNB has recorded a growth a 73% and is a leading finance company of India.
The Home Loan Life Insurance Plan of this company in association with TATA AIG offers the
lowest premium in compare to others. The chart for loans of 5 lacs and tenure of 15 years is just
premium. It renders other services like Deposit schemes,Loan schemes and many others.

ICICI Group:
ICICI offers a wide spectrum of financial products and services in India. The company provides
solutions for all needs like Instant Banking,Online Trading,Insta Insure,ICICI Bank imobile etc.
The company keeps up the financial profile healthy and diversify earnings across geographies
and businesses. The company's philosophy is to deliver high class financial services for all the
cross sections of the society. Their products are Mutual Fund,Private Equity
Practice,Securities,Life Insurance etc.
LIC Finance Limited:
It is the leading player in the finance sector of India being the biggest Housing Finance Company
of India. The function of the company is to provide finance to individuals for repair or
construction or renovation of the old or new apartment or house. It also offers finance on the
existing property for personal or business matters. The company has 14 back offices,6 regional
offices and 126 units of marketing in India.
L & T Finance Limited:
This company was established in the year 1994 by the Larsen and Turbo group and now it is a
significant name in the financial sector. The company offers schemes like funds for automobiles,
funds for Agricultural Instruments,secured loans,funds for automobiles and many others. It offers
loans for a long tenure and the loans are given in exchange of valuable items.


Karvy Group:
The company has about 575 offices in 375 destinations in India. It offers services like the Mutual
Funds Services,Depository Services,Debt Market Services,Investment Banking and many others.
India Financial market
is one of the oldest in the world and is considered to be the fastest growing and best among all
the markets of the emerging economies.

The history of Indian capital markets dates back 200 years toward the end of the 18th century
when India was under the rule of the East India Company. The development of the capital
market in India concentrated around Mumbai where no less than 200 to 250 securities brokers
were active during the second half of the 19th century.

The financial market in India
today is more developed than many other sectors because it was organized long before with the
securities exchanges of Mumbai, Ahmedabad and Kolkata were established as early as the 19th
century.

By the early 1960s the total number of securities exchanges in India rose to eight, including
Mumbai, Ahmedabad and Kolkata apart from Madras, Kanpur, Delhi, Bangalore and Pune.
Today there are 21 regional securities exchanges in India in addition to the centralized NSE
(National Stock Exchange) and OTCEI (Over the Counter Exchange of India).

However the stock markets in India remained stagnant due to stringent controls on the market
economy that allowed only a handful of monopolies to dominate their respective sectors. The
corporate sector wasn't allowed into many industry segments, which were dominated by the state
controlled public sector resulting in stagnation of the economy right up to the early 1990s.
Thereafter when the Indian economy began liberalizing and the controls began to be dismantled
or eased out, the securities markets witnessed a flurry of IPOs that were launched. This resulted
in many new companies across different industry segments to come up with newer products and
services.

A remarkable feature of the growth of the Indian economy in recent years has been the role
played by its securities markets in assisting and fuelling that growth with money rose within the
economy. This was in marked contrast to the initial phase of growth in many of the fast growing
economies of East Asia that witnessed huge doses of FDI (Foreign Direct Investment) spurring
growth in their initial days of market decontrol. During this phase in India much of the organized
sector has been affected by high growth as the financial markets played an all-inclusive role in
sustaining financial resource mobilization. Many PSUs (Public Sector Undertakings) that
decided to offload part of their equity were also helped by the well-organized securities market
in India.

The launch of the NSE (National Stock Exchange) and the OTCEI (Over the Counter Exchange
of India) during the mid 1990s by the government of India was meant to usher in an easier and
more transparent form of trading in securities. The NSE was conceived as the market for trading
in the securities of companies from the large-scale sector and the OTCEI for those from the
small-scale sector. While the NSE has not just done well to grow and evolve into the virtual
backbone of capital markets in India the OTCEI struggled and is yet to show any sign of growth
and development. The integration of IT into the capital market infrastructure has been
particularly smooth in India due to the countrys world class IT industry. This has pushed up the
operational efficiency of the Indian stock market to global standards and as a result the country
has been able to capitalize on its high growth and attract foreign capital like never before.

The regulating authority for capital markets in India is the SEBI (Securities and Exchange Board
of India). SEBI came into prominence in the 1990s after the capital markets experienced some
turbulence. It had to take drastic measures to plug many loopholes that were exploited by certain
market forces to advance their vested interests. After this initial phase of struggle SEBI has
grown in strength as the regulator of Indias capital markets and as one of the countrys most
important institutions.
Without a sound and effective banking system in India it cannot have a healthy economy. The
banking system of India should not only be hassle free but it should be able to meet new
challenges posed by the technology and any other external and internal factors.

For the past three decades India's banking system has several outstanding achievements to its
credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or
cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of
the country. This is one of the main reason of India's growth process.

The government's regular policy for Indian bank since 1969 has paid rich dividends with the
nationalisation of 14 major private banks of India.

Not long ago, an account holder had to wait for hours at the bank counters for getting a draft or
for withdrawing his own money. Today, he has a choice. Gone are days when the most efficient
bank transferred money from one branch to other in two days. Now it is simple as instant
messaging or dial a pizza. Money have become the order of the day.

The first bank in India, though conservative, was established in 1786. From 1786 till today, the
journey of Indian Banking System can be segregated into three distinct phases. They are as
mentioned below:
Early phase from 1786 to 1969 of Indian Banks
Nationalisation of Indian Banks and up to 1991 prior to Indian banking sector Reforms.
New phase of Indian Banking System with the advent of Indian Financial & Banking
Sector Reforms after 1991.
To make this write-up more explanatory, I prefix the scenario as Phase I, Phase II and Phase III.

The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and
Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay
(1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These
three banks were amalgamated in 1920 and Imperial Bank of India was established which started
as private shareholders banks, mostly Europeans shareholders.

In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National
Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of
India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore
were set up. Reserve Bank of India came in 1935.
During the first phase the growth was very slow and banks also experienced periodic failures
between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline the
functioning and activities of commercial banks, the Government of India came up with The
Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per
amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with extensive
powers for the supervision of banking in india as the Central Banking Authority.

During those days public has lesser confidence in the banks. As an aftermath deposit
mobilisation was slow. Abreast of it the savings bank facility provided by the Postal department
was comparatively safer. Moreover, funds were largely given to traders.

Government took major steps in this Indian Banking Sector Reform after independence. In 1955,
it nationalised Imperial Bank of India with extensive banking facilities on a large scale specially
in rural and semi-urban areas. It formed State Bank of india to act as the principal agent of RBI
and to handle banking transactions of the Union and State Governments all over the country.

Seven banks forming subsidiary of State Bank of India was nationalised in 1960 on 19th July,
1969, major process of nationalisation was carried out. It was the effort of the then Prime
Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country was
nationalised.

Second phase of nationalisation Indian Banking Sector Reform was carried out in 1980 with
seven more banks. This step brought 80% of the banking segment in India under Government
ownership.

The following are the steps taken by the Government of India to Regulate Banking Institutions in
the Country:
1949 : Enactment of Banking Regulation Act.
1955 : Nationalisation of State Bank of India.
1959 : Nationalisation of SBI subsidiaries.
1961 : Insurance cover extended to deposits.
1969 : Nationalisation of 14 major banks.
1971 : Creation of credit guarantee corporation.
1975 : Creation of regional rural banks.
1980 : Nationalisation of seven banks with deposits over 200 crore.
After the nationalisation of banks, the branches of the public sector bank India rose to
approximately 800% in deposits and advances took a huge jump by 11,000%.

Banking in the sunshine of Government ownership gave the public implicit faith and immense
confidence about the sustainability of these institutions.
Phase III
This phase has introduced many more products and facilities in the banking sector in its reforms
measure. In 1991, under the chairmanship of M Narasimham, a committee was set up by his
name which worked for the liberalisation of banking practices.

The country is flooded with foreign banks and their ATM stations. Efforts are being put to give a
satisfactory service to customers. Phone banking and net banking is introduced. The entire
system became more convenient and swift. Time is given more importance than money.

The financial system of India has shown a great deal of resilience. It is sheltered from any crisis
triggered by any external macroeconomics shock as other East Asian Countries suffered. This is
all due to a flexible exchange rate regime, the foreign reserves are high, the capital account is not
yet fully convertible, and banks and their customers have limited foreign exchange exposure.
There are three different phases in the history of banking in India.
Pre-Nationalization Era.
Nationalization Stage.
Post Liberalization Era.
1. Pre-Nationalization Era:
In India the business of banking and credit was practices even in very early times. The
remittance of money through Hundies, an indigenous credit instrument, was very popular. The
hundies were issued by bankers known as Shroffs, Sahukars, Shahus or Mahajans in different
parts of the country.
The modern type of banking, however, was developed by the Agency Houses of Calcutta and
Bombay after the establishment of Rule by the East India Company in 18
th
and 19
th
centuries.
During the early part of the 19
th
Century, ht volume of foreign trade was relatively small. Later
on as the trade expanded, the need for banks of the European type was felt and the government
of the East India Company took interest in having its own bank. The government of Bengal took
the initiative and the first presidency bank, the Bank of Calcutta (Bank of Bengal) was
established in 180. In 1840, the Bank of Bombay and IN 1843, the Bank of Madras was also set
up.
These three banks also known as Presidency Bank. The Presidency Banks had their branches
in important trading centers but mostly lacked in uniformity in their operational policies. In
1899, the Government proposed to amalgamate these three banks in to one so that it could also
function as a Central Bank, but the Presidency Banks did not favor the idea. However, the
conditions obtaining during world war period (1914-1918) emphasized the need for a unified
banking institution, as a result of which the Imperial Bank was set up in1921. The Imperial Bank
of India acted like a Central bank and as a banker for other banks.
The RBI (Reserve Bank of India) was established in 1935 as the Central Bank of the Country. In
1949, the Banking Regulation act was passed and the RBI was nationalized and acquired
extensive regulatory powers over the commercial banks.
In 1950, the Indian Banking system comprised of the RBI, the Imperial Bank of India,
Cooperative banks, Exchange banks and Indian Joint Stock banks.
2. Nationalization Stages:
After Independence, in 1951, the All India Rural Credit survey, committee of Direction with
Shri. A. D. Gorwala as Chairman recommended amalgamation of the Imperial Bank of India and
ten others banks into a newly established bank called the State Bank of India (SBI). The
Government of India accepted the recommendations of the committee and introduced the State
Bank of India bill in the Lok Sabha on 16
th
April 1955 and it was passed by Parliament and got
the presidents assent on 8
th
May 1955. The Act came into force on 1
st
July 1955, and the
Imperial Bank of India was nationalized in 1955 as the State Bank of India.
The main objective of establishing SBI by nationalizing the Imperial Bank of India was to
extend banking facilities on a large scale more particularly in the rural and semi-urban areas and
to diverse other public purposes.
In 1959, the SBI (Subsidiary Bank) act was proposed and the following eight state-associated
banks were taken over by the SBI as its subsidiaries.

Name of the Bank Subsidiary with effect from
1. State Bank of Hyderabad 1
st
October 1959
2. State Bank of Bikaner 1
st
January 1960
3. State Bank of Jaipur 1
st
January 1960
4. State Bank of Saurashtra 1
st
May 1960
5. State Bank of Patiala 1
st
April 1960
6. State Bank of Mysore 1
st
March 1960
7. State Bank of Indore 1
st
January 1968
8
.
State Bank of Travancore 1
st
January 1960
With effect from 1st January 1963, the State Bank of Bikaner and State Bank of Jaipur with head
office located at Jaipur. Thus, seven subsidiary banks State Bank of India formed the SBI Group.
The SBI Group under statutory obligations was required to open new offices in rural and semi-
urban areas and modern banking was taken to these unbanked remote areas.
On 19
th
July 1969, then the Prime Minister, Mrs. Indira Gandhi announced the nationalization of
14 major scheduled Commercial Banks each having deposits worth Rs. 50 crore and above. This
was a turning point in the history of commercial banking in India.
Later the Government Nationalized six more commercial private sector banks with deposit
liability of not less than Rs. 200 crores on 15
th
April 1980, viz.
Andhra Bank.
Corporation Bank.
New Bank if India.
Oriental Bank of Commerce.
Punjab and Sind Bank.
Vijaya Bank.
In 1969, the Lead Bank Scheme was introduced to extend banking facilities to every corner of
the country. Later in 1975, Regional Rural Banks were set up to supplement the activities of the
commercial banks and to especially meet the credit needs of the weaker sections of the rural
society.
Nationalization of banks paved way for retail banking and as a result there has been an alt round
growth in the branch network, the deposit mobilization, credit disposals and of course
employment.
The first year after nationalization witnessed the total growth in the agricultural loans and the
loans made to SSI by 87% and 48% respectively. The overall growth in the deposits and the
advances indicates the improvement that has taken place in the banking habits of the people in
the rural and semi-urban areas where the branch network has spread. Such credit expansion
enabled the banks to achieve the goals of nationalization, it was however, achieved at the coast
of profitability of the banks.
Consequences of Nationalization:
The quality of credit assets fell because of liberal credit extension policy.
Political interference has been as additional malady.
Poor appraisal involved during the loan meals conducted for credit disbursals.
The credit facilities extended to the priority sector at concessional rates.
The high level of low yielding SLR investments adversely affected the profitability of the
banks.
The rapid branch expansion has been the squeeze on profitability of banks emanating
primarily due to the increase in the fixed costs.
There was downward trend in the quality of services and efficiency of the banks.
3. Post-Liberalization EraThrust on Quality and Profitability:
By the beginning of 1990, the social banking goals set for the banking industry made most of the
public sector resulted in the presumption that there was no need to look at the fundamental
financial strength of this bank. Consequently they remained undercapitalized. Revamping this
structure of the banking industry was of extreme importance, as the health of the financial sector
in particular and the economy was a whole would be reflected by its performance.
The need for restructuring the banking industry was felt greater with the initiation of the real
sector reform process in 1992. the reforms have enhanced the opportunities and challenges for
the real sector making them operate in a borderless global market place. However, to harness the
benefits of globalization, there should be an efficient financial sector to support the structural
reforms taking place in the real economy. Hence, along with the reforms of the real sector, the
banking sector reformation was also addressed.
The route causes for the lackluster performance of banks, formed the elements of the banking
sector reforms. Some of the factors that led to the dismal performance of banks were.
Regulated interest rate structure.
Lack of focus on profitability.
Lack of transparency in the banks balance sheet.
Lack of competition.
Excessive regulation on organization structure and managerial resource.
Excessive support from government.
Against this background, the financial sector reforms were initiated to bring about a paradigm
shift in the banking industry, by addressing the factors for its dismal performance.
In this context, the recommendations made by a high level committee on financial sector,
chaired by M. Narasimham, laid the foundation for the banking sector reforms. These reforms
tried to enhance the viability and efficiency of the banking sector. The Narasimham Committee
suggested that there should be functional autonomy, flexibility in operations, dilution of banking
strangulations, reduction in reserve requirements and adequate financial infrastructure in terms of
supervision, audit and technology. The committee further advocated introduction of prudential
forms, transparency in operations and improvement in productivity, only aimed at liberalizing
the regulatory framework, but also to keep them in time with international standards. The
emphasis shifted to efficient and prudential banking linked to better customer care and customer
services.






COMPANY PROFILE


COMPANY PROFILE
Janalakshmi (literal translation, 'People's Wealth'), is a 'social business'. It embraces market
principles while pursuing a social objective.
To accomplish this, Janalakshmi has been designed in a 2-tier structure: for-profit operating
companies for investors; and a (Section 25) not-for-profit holding company called Janalakshmi
Social Services - in which promoter stakes are held. Funds in Janalakshmi Social Services can
only be used to address social issues.
About Janalakshmi Financial Services
Janalakshmi Financial Services is a for-profit NBFC urban microfinance institution (MFI), with
the promoter stake held in the not-for-profit entity Janalakshmi Social Services. This is the only
MFI in India structured in such a manner, with the deliberate intent of keeping the social spirit
intact.
Janalakshmi Financial Services' market-based approach to financial inclusion is defined by three
distinct characteristics: first, an exclusive focus on servicing the needs of the urban poor; second,
a strong customer-value driven approach in designing financial products and services; third, the
centrality of technology and processes as the foundation of a scalable enterprise.
Janalakshmi Social Services
Janalakshmi Social Services (JSS) a section (25) not-for-profit company registered in June 2006,
is geared to address the multiple facets of exclusion including providing small savings, financial
literacy and advisory services and activities that promote the development and economic well
being of the target base. JSS's endeavor is to constantly understand the world of the urban
excluded customer base and look out for opportunities that are central to inclusion. Once an
opportunity is identified, JSS develops a model (business or social business models) that is
sustainable and scalable and delivers on the promise of the opportunity. JSS then transitions the
model either into existing operating companies or sets up new companies that fulfill on the new
product/opportunity that is present. Some models require JSS to build internal capacity to
implement and manage it in a sustainable manner.
Some notable initiatives undertaken by JSS include:
Janaadhar Constructions Pvt Ltd
Janaadhar Constructions Pvt. Ltd., floated by Janalakshmi Social Services (JSS), is a unique
affordable housing development company that seeks to blend market principles with a not-for-
profit spirit. A systematic focused and professional effort, Janaadhar aims to build affordable,
high-quality homes - to create an inclusive society and a better quality of life.
Janaadhar brings together the expertise of Janalakshmi Social Services, Sterling Developers
Private Limited and Venkataramanan Associates in this breakthrough venture.
Janaadhar Shubha, the pilot project of Janaadhar Housing (a sister concern of Janalakshmi), is
primarily aimed at the blue-collared segment who do not have access to housing and home loans.
Planned as an affordable housing solution, Janaadhar Shubha is being developed on an 11.5 acres
plot on the Attibele-Anekal Road, on the outskirts of Bengaluru city.
Partnership with Axis Bank
Janalakshmi Social Services started a new initiative this financial year partnering with Axis
Bank, the 3rd largest Private Bank in the Country. Axis Bank embarked on its first Urban
Financial Inclusion Initiative which was formally launched in Bengaluru on 9th September and
expanded to Chennai on 22nd Dec 2010. This Urban Financial Inclusion initiative is aimed at
reaching out to the urban underprivileged and providing them with the facility of convenient
banking without having to go to a Bank Branch to transact. Janalakshmi Social Services would
act as the Bank's Business Correspondent for this initiative.
Initially through this initiative, the partnership will offer a No Frills Savings Bank account along
with the facility of enabling cash transactions to the unbanked and underbanked population. The
scope can be extended to other financial products and services down the line. Through this
initiative, the Bank expects to be able to reach out to maximum number of unbanked and under-
banked customers in the Urban Financial Inclusion space.
This Urban Financial Inclusion initiative was launched in Bangalore initially - Chennai was
added in Dec 2010 and will extend to cities like Delhi, Mumbai and other urban locations
shortly. JSS has already enrolled close to 45,000 customers for this initiative and has a very
ambitious customer acquisition plan for the current fiscal.
Technology
As a pioneer in the use of technology to the microfinance sector, Janalakshmi's focus on
innovative technology solutions is central to the company's mission. Early on, Janalakshmi made
an investment to define and document the processes of the core business life cycle. Beginning
with the customer acquisition phase, loan disbursement, collection phase, and finally the closure
phase, the mapping of processes identified the vital role of technology in driving business
processes. These documented procedures now ensure that standardization, improvement, and
compliance are implemented in all levels of the company.
Janalakshmi's technology infrastructure is defined by a three tier framework. At the foundation
lies the IT architecture comprised of the technology services and infrastructure. The architecture
enables growth and ensures scalability of the business. Next, the core banking system (CBS)
complemented by the CRM application drives the business processes of the company. Finally,
delivery mechanisms such as the Smart Card seamlessly interface with CBS and CRM to cater to
the needs of the customer. Each tier of the system work together to fulfill the company's key
value drivers of customer satisfaction and operational excellence.
Equipped with a best in class loan management system, a seamless information system and a
transaction engine to support efficient service delivery, Janalakshmi is poised for rapid growth.
CBS
The core banking system (CBS) is the "industrial strength backbone," of Janalakshmi's
technology architecture. CBS is a global technology solution product customized for the
microfinance sector. It provides the robust and scalable back-end database for the financial
information of the business.
Smart-Card
The Smart Card is a biometric enabled multi-function personalized card provided to customers
upon enrollment. A Smart Card serves as proof of identity and an electronic pass-book for
customers. It enables automatic creation of customer records and also allows for automatic
updates of disbursements and collections. With the capability to service multiple products, the
Smart Card will be the transaction engine used for future product implementation.
CRM
Janalakshmi utilizes a CRM application to streamline the collection process from the customer
acquisition to the collections phase. This customized solution allows for one data set for all to
view and enables management to update on a real time basis.
Benefits
Each of these technology solutions empower our personnel to improve processing turnaround-
times, implement effective monitoring and recovery of loans, and ensure customer satisfaction.
Additionally, the company can reduce the costs and complexities associated with a cash-based
transaction environment, intrinsic to the microcredit world.
Upcoming Plans
Create a single and uniform information system based on processes and procedure. This
web based 'Portal' will host the CRM applications and organization wide processes and
documents. The portal will enable all location offices to access the application and data
seamlessly
Provide a reliable and consistent IT Infrastructure through the implementation of a
Network and Security management system. This includes the implementation of an
Enterprise Data Storage solution for corporate data requirements
Improve the MIS capability through a robust solution
Implement an additional delivery channel interfaced with CBS and Salesforce.com. This
is to be accomplished through mobile phone based solutions particularly for the
collections and customer update requirements
Our Investors


The Michael and Susan Dell Foundation: Michael and Susan Dell established their foundation
in 1999 with an endowment that has since grown to more than $1 billion. The vision of the
foundation is to focus on opportunities with the greatest potential to directly and measurably
transform the lives of children living in urban poverty. As part of their initiative to promote
Family Economic Stability, the foundation works closely with Microfinance Institutions (MFIs)
like Janalakshmi in urban communities and encourages the diversification of their services to
include micro-loans; credit, transfer and savings services, micro-insurance and financing for low-
cost housing, among others.


Lok Capital: The Lok Capital Group - an initiative delivering equity capital and capacity-
building support to Indian Microfinance Institutions. It facilitates the delivery of affordable
financial services, primarily to low-income households in India, in a commercially viable and
sustainable manner.
Lok has partnered with Janalakshmi fulfilling its mission to partner with visionary and talented
entrepreneurs and managers who are keen to take microfinance in India to a new level of
sustainability, scalability and professionalism.

Bellwether Microfinance Fund: The Bellwether Microfinance Fund is dedicated to investing in
the equity of Microfinance institutions (MFIs) in India. The Fund invests in high potential start-
ups as well as established medium-sized NGO-MFIs intending to transform into legally
appropriate entities. The Fund looks to invest in MFIs that focus on efficiency as well as
commercial viability. Reflecting the experience of successful MFIs around the world, Bellwether
aims to combine the availability of equity or quasi-equity instruments in the critical first few
years of the MFIs' operations with close operational support and oversight and outreach to
domestic financial markets.


Tree Line Investment Management Limited: Tree Line Investment Management Limited was
established in 2006 with two subsidiaries in Hong Kong and Singapore respectively. Tree Line
has nine investment professionals throughout Asia-Pacific each with at least ten years of
investment experience. The group aims to achieve significant capital gains by identifying strong
growth opportunities in the Asia-Pacific region for medium and long term investment.
Board of Directors
Mr. Ramesh Ramanathan
The Founder and Chairman of Janalakshmi, Mr. Ramesh Ramanathan has a proven track record
in addressing many of the issues faced by urban India. Ramesh has to his credit strong
international banking experience, creating innovative institutional products, working with cutting
edge technology and risk management systems. He possesses an Honors degree in Physics from
BITS Pilani, and an MBA from Yale University's School of Management. He has co-authored
the book "Urban Poverty Alleviation in India," and is a champion for the advocacy of poverty-
related and public governance issues.
Mr. R. Srinivasan
Mr. Srinivasan, has worked closely with Mr. Ramesh Ramanathan in drawing the blue print of
Janalakshmi, and continues to be the guiding force for the entire team. Prior to joining
Janalakshmi as CEO, he served as the Deputy Chief Executive Officer, India of ANZ Grindlays
Bank and later as a senior advisor to both Fitch Ratings and JPMorgan. Mr. Srinivasan has an
M.A in Economics from Delhi University.
Mr. Uday M Chitale
Mr. Uday Chitale is a Chartered accountant by profession and a senior Partner in M/S M.P.
Chitale and Co. He has served on expert committees set up by ICAI, SEBI, RBI, IRDA, and
IBA.
Mr. Donald Peck
Mr. Donald Peck is the Treasurer of the Lok Foundation. He is also the Managing Director of
ACTIS (previously Commonwealth Development Corporation). ACTIS is one of the most active
venture capital investors in emerging markets around the world. Dr. Peck is a veteran venture
investor in South Asia, and also has experience in other emerging markets from an earlier stint at
IFC.
Ms. Geeta Goel
Ms. Geeta Goel manages the Michael & Susan Dell Foundation's (MSDF) microfinance
initiative in India, which includes a portfolio of over 10 microfinance (and related) institutions.
Prior to joining the Foundation, she spent over 12 years with the Corporate Finance Group of
PricewaterhouseCoopers in India, advising large Indian and multi-national clients on joint
ventures, mergers & acquisitions, business plans and valuations. Geeta has also advised clients in
capital structuring and raising private equity. She is an alumnus of IIM (Ahmedabad) and Lady
Shri Ram College (Delhi).
Mr. S. Viswanatha Prasad
Mr. S. Viswanatha Prasad is a senior Microfinance professional who has over eight years of
operating and senior management experience in the microfinance sector, preceded by a decade in
the mainstream financial sector. He is a co-founder of The Bellwether Microfinance Fund and is
also the promoter of Caspian Advisors, the Fund Manager of Bellwether. Mr. Prasad was earlier
associated with and was instrumental in the rapid growth of India's first regulated MFI, Bhartiya
Samruddhi Finance Limited (BASIX Group), where he served as COO and then CEO.
Mr. Narayan Ramachandran
Mr. Narayan Ramachandran is the former Country head-India, Morgan Stanley. Mr.
Ramachandran has also served as the Head and Co-Lead Portfolio Manager of Morgan Stanley's
Global Emerging Markets and Global Asset Allocation teams, managing over $25 billion in
assets. Before joining Morgan Stanley, he was the Managing Director at Rogers Casey (now
CRA Rogers Casey). In addition, Mr. Ramachandran was Director of Research at Rogers Casey
and President of its investment advisory subsidiary. He received a B.Tech in chemical
engineering from IIT, Bombay and an MBA from the University of Michigan. Mr.
Ramachandran holds the Chartered Financial Analyst designation.

Mr. Zaheer Abbas Sitabkhan
Mr. Sitabkhan is the CEO of Treeline Investment Management Ltd. He was earlier Director of
Lloyd George Management. He graduated from Case Western Reserve University in 1987 with a
B.A and from Indiana University in 1991 with an MBA.
Ms. Rama Bijapurkar
Ms. Rama Bijapurkar is one of India's most respected thought leaders on market strategy and
consumer related issues in India. She is also a keen commentator on social and cultural changes
in the evolving liberalizing India. Rama serves as an independent director on the boards of
Infosys Technologies, CRISIL, Axis Bank, Godrej Consumer Products, Give Foundation (a not-
for-profit company) and Mahindra Holidays & Resorts India Ltd.
An alumnus of the Indian Institute of Management, Ahmedabad, Rama continues to be involved
with her alma mater where she is a visiting faculty and also serves on the Board of Governors.
Rama's work experience has been in market research and strategy consulting and includes
leadership positions with McKinsey & Company, MARG (now AC Nielsen India), and full time
consulting with Hindustan Unilever India.
Mr. S.B. Mathur
Mr. Sunil Behari Mathur is an independent director of the company. He has more than 40 years
of experience in Insurance and Housing Finance. He was the chairman of Life Insurance
Corporation of India from August 2002 to October 2004 and is also a former chairman of the
National Stock Exchange. Mr. Mathur is a qualified chartered accountant and currently serves on
the board of directors of various companies. He has also been sponsored by the United States
Agency for International Development ("USAID") for a training program on housing finance at
the Wharton Business School.
Our Team
R. Srinivasan, Chief Executive Officer & Managing Director
A former civil servant, Mr. Srinivasan has had a lengthy and illustrious career in the fields of
banking and taxation, with more than four decades of experience in both the public and corporate
sectors. He was a member of the Indian Revenue Service and was the Deputy Chief Executive
Officer, India of ANZ Grindlays Bank. He later served as a senior advisor to both Fitch Ratings
and JP Morgan where he advised the Government on the Disinvestment program. Mr. Srinivasan
has an M.A in Economics from Delhi University.
V.S. Radhakrishnan, Chief Operating Officer
Radha, as he is fondly called is a veteran banker with an illustrious career with HSBC for over
25 years. He held various senior positions in HSBC before he moved on to ING Vysya Bank for
3 years. Radha has an MBA from Indian Institute of Management, Ahmedabad, and a CAIIB
from Indian Institute of Banking & Finance.

S. Gopalakrishnan, Chief Financial Officer
Gopal joins Janalakshmi with twenty-eight years of experience including over eighteen years of
experience in the banking sector. Gopal has been with top firms, such as Andhra Bank, Narasu's
Coffee, and Weizmann Homes Ltd. His latest stint was with Sai India Ltd where he was CFO for
2 years. Gopal holds a B.Sc from Madras University and is a Chartered Accountant.
N.S. Rajan, Senior Vice President - Credit, Risk Management & Operations
Rajan is a veteran in the field of microfinance and banking, including Lease/ Hire Purchase &
Public Deposits of NBFC, having been closely involved in the sector in rural and urban areas
through various government sponsored Urban Poor schemes such as PMRY, SEEUY, SEPUP,
IRDP, BHAGYJYOTI etc. Rajan served as Assistant General Manager in Centurion Bank for
about 7 years and earlier in Canara Bank for about 24 years, including 5 years in the Bank's
NBFC subsidiary. Rajan, has a CAIIB from Indian Institute of Bankers, Mumbai, Bachelor in
Law from Bangalore University and an MBA from IGNOU.
C.P. Rangarajan, Senior Vice President - Retail Financial Services
Rangarajan is a veteran Banker with a rich and successful legacy and experience of nearly four
decades in Banking. His career started in State Bank of India where he handled a variety of
Banking and Senior management functions and had significant achievements to his credit during
his 26 years of service. He joined Axis in 1997 and held very strategic senior positions in
business development and successfully drove the growth plans and was a member of the Core
Management Team of Axis Bank. Rangarajan has a Post Graduate in Economics and holds a
CAIIB qualification.
K.S. Ramdas, CEO - Enterprise Financial Services
Ram has over three decades of an illustrious banking career, most prominently 17 years at JP
Morgan Chase in New York in which he held positions of increasing responsibility in corporate
and retail banking. Ram also led Chase's investment and insurance advisory services for small
businesses. His other employers include Bank of America, National Bank of Bahrain and
Toronto Dominion Bank. Recently, as EVP & Head of DCB's SME business, he launched their
foray across major Indian metros. Ram is passionate about building de novo business verticals
and is sought out as a mentor. Ram has an MBA from IIM Ahmedabad, and an M.A from the
Delhi School of Economics.
Jaya Rupanagunta, Vice President - Product & Marketing
With over ten years of experience in financial services, Jaya joined Janalakshmi in April 2005,
when it was still a sub-unit of Sanghamitra. She was a part of the original team that made the
transition to Janalakshmi in 2006. Prior to that, she had been working for Treasury Strategies,
Chicago, in cash management. She now heads the Product team at Janalakshmi. Jaya has a B.A.
(Econ. Honours) from Lady Shriram College, Delhi, and an MBA from IMT, Ghaziabad.


Cecil Lazarus, Vice President - HR and Training
Cecil has fourteen years of manufacturing experience in both financial and commercial areas
prior to joining Sanghamitra, a Bangalore - based MFI, where he headed the operations for six
years. He transitioned to Janalakshmi with the absorption of the Urban portfolio of Sanghamitra.
Cecil has invaluable hands on experience in running MFIs and now heads the Audit and Training
Function. Cecil has an MBA from Bangalore University. He is also a certified member of the
Association of Cost Accountants, AICWA.
R. Dasarathy, Vice President - Special Projects & IT
Over the course of his career, Das has accumulated over 25 years of experience in the banking
sphere, having worked at a number of reputed corporations such as the State Bank of India,
Credit Agricole, and ING Vysya Bank before coming onboard the Janalakshmi team in July
2007. He drives technology and associated special projects. Das holds an M.A (Mathematics)
from the FMS Institute and an MBA from the University of Delhi.
V. Venkatakrishnan, Regional Vice President
Venkat has a wealth of experience in the public, private and international banking sectors, having
done stints with Indian Bank, IDBI, ING Vysya and the International Commercial Bank West
Africa in his 25-year professional career. He joined Janalakshmi in early 2008 to manage
Business Operations for North Bangalore. Venkat has an M.A from Madras University, and a
CAIIB from the Indian Institute of Banking and Finance.
Bharath Sondur, National Head - Sales Liability Business
Bharath heads the National Sales team for the liability business which Janalakshmi started
recently as part of the new initiative under the Urban Financial Inclusion program with Axis
Bank. He has 17 years of banking experience with 6 banks in different capacities and
geographies. He started his career with State Bank of Travancore in 1993, then worked with
Global Trust Bank as Senior Officer and HDFC Bank as Branch Manager and Cluster Head -
Karnataka. He moved to ING Vysya Bank as Vice President & Regional Head for Karnataka in
2006 handling 132 branches in Karnataka and post which he moved to Bank Of Bahrain &
Kuwait to manage Liability Sales for Indian Operations. His latest assignment was with IndusInd
Bank as Vice President and Regional Head for Gujarat. Bharath holds a B.Sc and a PG Diploma
in Computer Applications.
Praveen Kumar Saha, Head - Karnataka
Praveen comes to Janalakshmi with 8 years of experience in the financial services sector.
Praveen was Product Manager-Microfinance at Capstone Financial Services before he joined
Janalakshmi. He has also worked with ICICI Bank, GE Money, and Mitt soft Technologies.
Praveen received his E.P.B.M from IIM Kolkata and his B.E. (Mechanical) from Bangalore
University.
S. Balasubramaniam, Head - Tamil Nadu
Balu, with over 33 years of experience in Banking has handled a large network of Branches and
dealt with staff management in Andhra Bank and ING Vysya Bank. He joined Janalakshmi in
January 2010 as Head, Tamil Nadu based in Chennai. Balu is a B.Sc degree holder from
University of Madras and holds a CAIIB qualification.
Bhupinder Singh, Head - Northern India
Bhupinder has 15 years of varied experience in Retail Asset Finance and Sales in Centurion
Bank. Prior to joining Janalakshmi in July 2010, he was Regional Head (North & Central) with
Bajaj Auto Finance Ltd. He has expertise in Two Wheeler finance, Commercial Vehicles,
Construction Equipment, Personal Loans, Consumer Durables, IT products, Cross Selling and
Administration. Bhupinder has an MBA from NP university - California. He is fond of Flying
and holds a Glider Pilot License.
Rajendra K Thote, Head - Western India
Rajendra has 25 years of Banking experience, working with Public and Private sector Banks
such as Corporation Bank, Centurion Bank and IndusInd Bank where he was a Deputy Vice
President - Operations, West Zone, prior to joining Janalakshmi in June 2010 as Head - Western
India. Rajendra has a B.A from Osmania University, Hyderabad, an MBA from National
Institute of Management, Mumbai and is certified in KYC, AML and Trade finance from Indian
Institute of Banking & Finance, Mumbai.






PRODUCTS & SERVICES






PRODUCTS & SERVICES
Products & Services
Janalakshmi's mission is to emerge as a full scale financial services provider for the Indian sub
prime sector. The sector includes the urban poor as well as the larger segment that has difficulty
accessing financial services.
Those in the sub prime sector have to make do with informal credit (from money lenders, pawn
brokers etc.), paying interest rates as high as 10% per day. They have poor savings instruments
and minimal coverage of other financial products like insurance and integrated services.
Janalakshmi has built a suite of financial products encompassing credit, savings, and insurance
for the needs of our customers.
Insurance
Life Insurance Corporation (LIC)
Janalakshmi offers life insurance protection under LIC's Janashree Bheema Yojana, at a minimal
premium of Rs.100 per annum. This plan entitles Janalakshmi's customers to
Rs.30,000 in the event of death
Rs.75,000 in case of death due to an accident
Rs.37,500 in case of permanent partial disability
In addition, the children of Janashree Bheema Yojana customers (studying in classes IX- XII) are
eligible for the Shiksha Sahayog Yojana (SSY) scholarship of Rs. 600/- per half year (Rs. 1200/-
per year) per child, at no extra cost or premium.
Pensions
IIMPS
Invest India Micro Pension Services (IIMPS) was established in 2006 by leading development
and pension sector experts to enable low income informal sector workers to build up savings for
retirement in a competitive and well regulated environment. IIMPS delivers pension and
insurance products and services to low income workers in collaboration with micro-finance
institutions, cooperatives, self-help groups, worker unions, multilateral and bilateral aid agencies,
government departments and finance firms.
UTI
UTI Asset Management Company Limited UTI AMC is an asset management company
registered and regulated by the Securities and Exchange Board of India (SEBI). UTI AMC has
been established by State Bank of India, Life Insurance Corporation of India (LIC), Bank of
Baroda and Punjab National Bank. UTI AMC presently manages a corpus of over Rs.44,623
Crores (as on 30 September 2008, source: www.amfiindia.com). UTI AMC has a nationwide
network consisting 103 financial centres and offices in London, Dubai and Bahrain. UTI AMC
pioneered the micro-pension concept by offering its retirement benefit plan to low income
women in Gujarat jointly with IIEF and SEWA Bank in 2006.
Retail Financial Services - Lending Products

Product Name Product Type Product Summary
Small Group Loans Credit All purpose loans to groups of 5, where loan is
given to individuals in the group, and each
member guarantees the other loans
Gold Loans Credit Loan extended against the guarantee of Gold.
This is an easy option by which the customer
can raise short term funds as a significant
proportion of them possess gold ornaments in
some form or the other.
Enterprise Loans Credit Loans to support income generating activities
Education Loans Credit Loans to support tuition and related education
expenses
Housing Loans Credit Housing loans are given to individuals
(eligibility criteria apply) for purchasing a flat
promoted by Janaadhar Constructions. A
certain amount of upfront investment is
required from the customer and the balance
cost will be provided by housing loan, to be
repaid by the customer in equated monthly
installments.

Retail Financial Services - Savings & Other Services

Product Name Product Type Product Summary
Janashree Bhima Yojana Micro Insurance Life insurance protection under LIC's
Janashree Bheema Yojana at a minimal
premium of Rs. 100 per annum.
Micro-Pensions Retirement
Planning
Mutual fund to generate retirement income
through partnership with UTI AMC and
IIMPS.
Savings Account Savings A No Frills Axis Savings Bank account along
with the facility of enabling cash transactions
to the unbanked and underbanked population.
Financial Advisory Services Provides financial education and literacy
services to existing Janalakshmi customers. For
Services customers with higher incomes the service also
provides personalized financial planning
services.

Enterprise Financial Services
The Enterprise Financial Services (EFS) initiative is our answer to the financial hurdle faced by
urban micro entrepreneurs. These enterprises are in the so-called "missing middle," i.e.,
enterprises that have become too large to tap traditional microfinance, and are unable to
conveniently access conventional bank funds.
EFS Product Characteristics
Types of loans: (1) Working capital demand loan with 6 months to 24 months repayment
and (2) Term loan with 12 months to 36 months repayment.
Ticket size: From Rs 1,00,000/- to Rs 10,00,000/-.
Repayment method: Post dated cheques with payment date as the 10
th
of every month.
Security: Hypothecation of stock, book debts, machinery; assignment of cash surrender
value of life insurance policies; mortgage of immovable property, etc. (some or all of the
above).
Characteristics of the target MSE
Businesses are run by the owner and family members and sometimes will have 2-3
employees and, hence, owner cannot leave the premises during business hours to visit a
bank.
A sizeable component of the business revenue comes from credit sales.
The customer would be primarily interested in availability of loans at affordable rates.
Convenience and availability are the key factors in their choice of a loan provider.
Currently money lenders/ family/ friends are the main, albeit unreliable, source of funds.
Value Proposition of EFS
Enterprise loans help in extending the product range offered by MSE businesses.
Enterprise loans help increase quantity of stock that the MSE businesses can afford to
carry.
Enterprise loans facilitate higher returns by decreasing credit purchases and increasing
cash purchases which, in turn, help in getting the stock at lower rates resulting in an
increase in margins.
Enterprise loans facilitate expansion either by purchase of machinery or by increasing the
infrastructure, thereby realizing higher output / sales.
Basic Credit Parameters
Three year vintage in Business (Business Registration Certificate required).
Customer KYC documents.
Three years IT returns (ITR Saral, Computation of Income, Balance sheet and Profit &
Loss Account).
Six Month Bank account Statement of the business.
Enterprise Financial Services
The Enterprise Financial Services (EFS) initiative is our answer to the financial hurdle faced by
urban micro entrepreneurs. These enterprises are in the so-called "missing middle," i.e.,
enterprises that have become too large to tap traditional microfinance, and are unable to
conveniently access conventional bank funds.
EFS Product Characteristics
Types of loans: (1) Working capital demand loan with 6 months to 24 months repayment
and (2) Term loan with 12 months to 36 months repayment.
Ticket size: From Rs 1,00,000/- to Rs 10,00,000/-.
Repayment method: Post dated cheques with payment date as the 10
th
of every month.
Security: Hypothecation of stock, book debts, machinery; assignment of cash surrender
value of life insurance policies; mortgage of immovable property, etc. (some or all of the
above).
Characteristics of the target MSE
Businesses are run by the owner and family members and sometimes will have 2-3
employees and, hence, owner cannot leave the premises during business hours to visit a
bank.
A sizeable component of the business revenue comes from credit sales.
The customer would be primarily interested in availability of loans at affordable rates.
Convenience and availability are the key factors in their choice of a loan provider.
Currently money lenders/ family/ friends are the main, albeit unreliable, source of funds.
Value Proposition of EFS
Enterprise loans help in extending the product range offered by MSE businesses.
Enterprise loans help increase quantity of stock that the MSE businesses can afford to
carry.
Enterprise loans facilitate higher returns by decreasing credit purchases and increasing
cash purchases which, in turn, help in getting the stock at lower rates resulting in an
increase in margins.
Enterprise loans facilitate expansion either by purchase of machinery or by increasing the
infrastructure, thereby realizing higher output / sales.
Basic Credit Parameters
Three year vintage in Business (Business Registration Certificate required).
Customer KYC documents.
Three years IT returns (ITR Saral, Computation of Income, Balance sheet and Profit &
Loss Account).
Six Month Bank account Statement of the business.

Our Impact
Janalakshmi's success stories are the women who have succeeded in overcoming impossible
odds with the help of microfinance. These women most often can be found, working as domestic
help, as wage earners in factories, or running their own small units of tailoring, agarbathi
making, beedi rolling or start up businesses from their homes. The returns from such professions
are paltry. And for sustenance, these women often borrow heavily from local money lenders at
very high interest rates. While they service the interest component of these loans, they sink
deeper into debt on account of not being able to mobilize the principal for repayment.



Amula, Bhagyalakshmi, Uma, Devi and Parvathi all have something in common. They are all
customers of Janalakshmi and all have a story to tell - a story of courage and determination, a
story of aspirations, a story of how Janalakshmi has impacted their lives. The women first
approached Janalakshmi in 2006, severely indebted and desperate for immediate funds.
Typically the first loan is for consumption, a means to free them from the bondage of the local
money lender. Most of these women are servicing their second loan, and some awaiting the third.
Uma, 23, is using her second loan towards an advance for her family's new home. There is a
pride in her smile, as she explains how gratified she is to be able to contribute so significantly to
the family. Her hope of moving her children to better and more comfortable accommodation is
now being realized.
Amula, 35, started a small saree business in her locality with the loan advanced by Janalakshmi.
With the festivities fast approaching she is confident of making significant profits. She speaks
about reinvesting significant portion of her returns to increase her stock, and she shyly shares her
dream of buying nice clothes for her children from Commercial Street with the money she
makes. She wants this Christmas to be 'Grand' and is happy that Janalakshmi is helping her get
there.



Devi, 33, is shy and takes a while to open up. Reservedly, she speaks of how she used the
Rs.5,000 from her first Janalakshmi loan to invest in the education of her young children, and
how she was able to set up a small cycle shop with the money from her second loan, a seemingly
meager amount of Rs.15,000, but a new lease of life for her.
Mala, 27, hoists her little daughter onto her lap, and cheerfully explains how she is using the
money from her second loan from Janalakshmi to make all the repairs that her house has needed
for a very long time. The most important thing for her today is the education of her daughters.
Somewhere through the conversation, the little child has fallen asleep, and you can't help wonder
what the child would be dreaming about.



Bhagyalakshmi, 34, is not so fortunate. We understand that she is battling a host of domestic
issues as she talks to us fighting back the tears streaming down her face. Living in a joint family,
her husband has not had a stable job till date. She has lived out of loans to sustain her family, and
providing medical attention to her ailing mother in law and educating children has always been a
struggle. While today her borrowings from the money lenders have been repaid, she hopes that
the third loan will help her husband start a business. She cheers up when talking about her
children being toppers in school. Her only dream is to give all she can to ensure her children
have a better life.
Parvati, 55, is a grandmother to three; she has used the 5,000 rupees from her first loan to
contribute to her grandchildren's school fees, and the 15,000 rupees from her second loan to help
her family build a bathroom for their house. The reaction takes a few seconds. To think they
never had a bathroom of their own before. Today, they do, and the loan she took to build it has
been repaid.
Get Involved with our Work
Internship Opportunities
Janalakshmi provides exciting and challenging learning opportunities to undergraduate and
graduate students seeking experience in microfinance.
Interns will get an opportunity to work in Information Technology, Product Development and
Business functions. Interns are encouraged to go into the field and gain valuable hands-on
experience by following the work of Janalakshmi.