EVOLUTION OF MICROFINANCE FOR URBAN

POOR
Presented By:Group-7
Akshay Kumar

Presented To:Prof. P . K . Mishra

Nayak(UR14045)
Pankaj Kumar
Senapati(UR14062)
Parth Kapoor(UR14063)
Satyabrata
Nayak(UR14075)
Unnati Solanki(UR14082)

PERFORMANCE ANALYSIS
It began its business with a pilot in Bangalore to test the Grameen

model in an urban setting. Then, it extended its business to

alternate parts of the nation. It opened territorial workplaces at
Delhi, Kolkata, Pune.
Amid the business crisis in FY 2011-12, it moved its center

towards combination and operational effectiveness. Ujjivan

embraced a great deal of productivity activities, for example,
* online Core Banking System connectivity of all
branches,
* roll out of monthly frequency for collection,
They effectively dealt with this emergency and adjusted themselves
to the new reality of the industry.

 With 423 branches, 3,000 crore portfolio and 2 million clients,

today Ujjivan is among the main 5 MFIs regarding borrower

base and portfolio size.
Ujjivan's Credit management is exceptional in MFI industry as

the credit arrangement is done keeping in mind the occupation

and income levels, demographic profile of clients, and powerful
credit evaluation, monitoring and collection practices.
Ujjivan has a magnificent repayment rate of 99.87% and PAR of

0.1%. Also, a gross NPA of just 0.07% as of March 2014.

Portfolio at risk and Cash Reserve Ratio

Operating Expense Ratio

Repayment Week Windows: Introduced additional repayment week

windows to encourage our field staff to handle more borrowers.

Automation of Cashier Activities:On line Core Banking System

(CBS) was established which provided automated receipts and
eliminated registers . Now, cashiers are able to handle 3X volumes
compared to 2011.

Cashless Disbursements:This initiative was taken considering

safety of customer and staff. Also, it educated customers on risks
associated with carrying cash and also the benefits of loan amount
getting credited to their bank account. Today more than 50% of the
customers prefer direct bank transfer of disbursement.

Document Management System (DMS):They used DMS to make the

loan processing & underwriting process paperless and eco-friendly.

FINANCIAL ANALYSIS:
Profitability & Sustainability:

1.Operating self Sufficiency (OSS) = Financial revenue/(Financial

expenses+ Provision for loan Loss+ Operational Expenses)
For 2015
OSS =6118800591/ (2713806964+210476682+654271391+1327695558)
=1.247=124.7%
For 2014
OSS =3576627272/ (1448546685+82922821+360369530+814912916)
=1.321=132.1%
Operating Self Sufficiency Ratio has decreased from 132.1% to 124.7%;
this means the degree to which internally generated operational revenue
covering all operating expenses from MFIs core business has decreased
from previous year. But it is enough to cover MFIs operating expenses
and to make operations self-sustainable.

2. Return on Assets (ROA) = (Net Operating Income- Taxes)/Average

Assets
For 2015
ROA = (599316503-387244718)/30274803790
=0.1851=18.51%
For 2014
ROA = (3478892385-282288033139)/17194716280
=0.1855=18.55%

ROA is remains positive that means this is more favorable to

investors because it shows that the company is more effectively
managing its assets to produce greater amounts of net income. A
positive ROA ratio usually indicates an upward profit trend as well.

Assets & Liability Management :

1.Debt Equity Ratio (D/E) = Total Liability/total Equity
For 2015
D/E Ratio=32398092230/7364499812
=4.399
For 2014
D/E Ratio= 17061743630/3725271892
=4.58
D/E ratio has decreased that means MFIs capacity to attract debt
funding is decreasing based on its capital strength of its own equity.
A decrease in debt equity ratio enhances the growth of the MFI.

2. Portfolio to Assets (PA)= Gross loan Portfolio / Assets

For 2015
PA =32180000000/39762592051
=0.809=80.9%
For 2014
PA =16173000000/20787015526
=0.778=77.80%

An increasing trend signals that excess liquidity or demand for

additional funding. MFIs that rely on savings to fund lending activities
or are regulated by local banking guidelines need to pay special
attention to this ratio

Efficiency & Productivity:

1. Average outstanding loan Size = Gross Loan Portfolio/Number of
Loan Outstanding
For 2015
Average outstanding loan Size =32180000000/2316668
=13890.639
For 2014
Average outstanding loan Size =16173000000/1386056
=11668.35971
This has increased due to change in Methodology, Disbursement
pattern and Loan Size. This ratio is used by the MFI to project and
plan portfolio growth, as loan size is one of the drivers of profitability.

2. Operating Expense Ratio (OER) = Operating Expenses/Gross

Loan Portfolio
For 2015
OER= 8.4%
For 2014
OER= 8.8%

Decrease in OER indicates that MFI becomes more efficient in

managing its loan portfolio. A lower operating expense ratio
indicates a greater profit for the investors.

Portfolio Quality:
1.Write off ratio = Value of Loans Written off / Average Gross loan
portfolio
For 2015
Write off ratio =16050087/24175000000
=0.0006639=0.06639%
For 2014
Write off ratio =10465375/31568500000
=0.0003315=0.03315%
Write Off ratio has increased means loan loss amount has slightly
increased from previous year but it is very low in terms of amount.
The MFI has written of slightly more amount of loan money
compared to previous year due to no recovery.

2. Portfolio at Risk (PAR) = (Portfolio at Risk > 30 days +

Renegotiated Loans)/Gross loan Portfolio

For 2015
PAR (%) =0.18%
For 2014
PAR (%) = 0.10%

PAR is less than 2%, which indicates that Ujjivan is sustainable

institution because it indicates potential future losses are less. It is
much lower which also indicates that the loan amount collected is
more than loan amount due.

CORPORATE SOCIAL RESPONSIBILITY:

Ujjivan
has
been
involved
in
Programme(SDP)/Corporate
Social
activities across its working locations.

Social
Development
Responsibility
(CSR)

Ujjivan conducts self-sustained CSR Programs along with its

employees, customers and the communities where it works.

In 2014-15 Ujjivan carried out its initiatives in 318 Mature

branches (operational for more than 1 year and a customer

base of minimum 2000 customers) in its working locations
benefitting approximately 3,14,608 community members.

In the year 2014-15, Ujjivans focus was on Sanitation projects.