Microfinance Companies Untouched From Demon-Etization

India's cash-dominated microfinance sector may have been hurt

the most by the Modi government's demonetization move, but
sector leaders like Ujjivan Financial Services and Bharat
Financial Inclusion are all out to show that all is well.
But, industry leaders are not too confident of the sector matching
the 84% growth the NBFC-MFI sector recorded last year. This is
because MFIs are now lending only to existing borrowers and
limiting the number of new borrowers.

About Ujjivan:
Ujjivan on Monday announced a repayment rate of 91% in November. It disburses about Rs
20 crore per day. These lenders have made sure that it is business as usual by recycling cash
collected from borrowers as repayments.
R Baskar Babu, chief executive of Suryoday Micro Finance and president of Microfinance
Institutions Network, an industry lobby said that the ground-level situation has shown sharp
improvement from the initial few weeks of November. Borrowers have shown first-rate
repayment discipline.
Ujjivan share price rose 0.54% to Rs 346.10 on NSE after the repayment announcement. It
had closed at Rs. 442.55 on November 9th. Also, Ujjivan is the top 500 performing stock as
identified by Dynamic Levels for the quarter.
Ujjivan chief financial officer Sudha Suresh had informed that poll-bound Uttar Pradesh
lagged behind with a 79-80% repayment rate. Quite a few borrowers in Uttar Pradesh,
Madhya Pradesh and Maharasthra had stopped repaying as there were rumors about loan
waivers. The microfinance industry had to seek the help of state governments to suppress
these rumors.

Ujjivan Financial Services Limited, the fourth financial institution to receive the final small
finance bank license from the Reserve Bank of India (RBI), said it disbursed loans worth Rs.
553 crore in November, of which 65% was in cash.
Suresh said Ujjivan pays out around Rs 600 crore a month during the October to December
period, but a drop in new business led to a decline in disbursal this November. The
Bengaluru-based entity had primarily deferred its repayment from November 9 to November
13.

At Bharat Financial:
Bharat Financial declared a repayment cessation on November 11 at 92% of its branches.
Bharat Financial's disclosures show remarkable resilience in collections, with collective 89%
of installments due since demonetization announcements being collected. Bharat Financial
inclusion Limited informed the BSE it had a collection efficiency of 97% in the two weeks
post demonetization. Bharat financial share price had closed at Rs. 770.50 on 9 th November
as compared to its close of Rs. 741.30 on 8 th November. Bharat Financial is also identified
among the top 500 performing stocks for the quarter by Dynamic Levels.

Bharat Financial and Ujjivan today:

Today, Ujjivan share price opened at Rs. 350.10, 1.37% above its previous close of Rs.
345.35. At 9:30 Am, the stock was trading at Rs. 350.25, up by 1.42% and below its 50
DMA.
Bharat Financial share price opened at Rs. 709 as compared to its previous close of Rs.
707.60. Currently, the stock was trading at Rs. 719.25, up by 1.65% and below its 50 DMA.

Disclaimer
The investment advice or guidance provided by way of recommendations, reports or other ways are solely the personal views of the research
team. Users are advised to use the data for the purpose of information and rely on their own judgment while making investment decision.
Dynamic Equities Pvt. Ltd - SEBI Investment Advisory Reg. No.: INA300002022

Disclosure
Dynamic Equities Pvt. Ltd. is a member of NSE, BSE, MCX SX and a DP with NSDL & CDSL. It is also engaged in Investment Advisory
Services and Portfolio Management Services. Dynamic Commodities Pvt. Ltd., associate company, is a member of MCX & NCDEX. We declare
that our activities were neither suspended nor we have defaulted with any stock exchange authority with whom we are registered. SEBI,
Exchanges and Depositories have conducted the routine inspection and based on their observations have issued advise letters or levied minor
penalty on for certain operational deviations.
Answers to the Best of our knowledge and belief of Dynamic/ its Associates/ Research Analyst: DYNAMIC/its Associates/ Research Analyst/
his Relative:

Do not have any financial interest / any actual/beneficial ownership in the subject company.
Do not have any other material conflict of interest at the time of publication of the research report
Have not received any compensation from the subject company in the past twelve months
Have not managed or co-managed public offering of securities for the subject company.
Have not received any compensation for brokerage services or any products / services or any compensation or other benefits from the
subject company, nor engaged in market making activity for the subject company
Have not served as an officer, director or employee of the subject company

Article Written by
Tanaya Nath