Evolution of Pahal Financial Services

• Please include any Awards Won by Pahal

• Any other instances of recognition
• Any other additional points - Highest Disbursements in a particular year

Month Particulars

Mar, 2011 Operations started after acquiring the microfinance portfolio of Lok Vikas Nidhi

Jan, 2014 Company got classified as a NBFC-MFI

2014-2015 Started operations in Madhya Pradesh

Started disbursing Individual Loans

2015-2016 AUM crossed INR 100 cr.

2015-2016 Started operations in Maharashtra

2016-2017 Started operations in Rajasthan

2016-2017 AUM crossed INR 150 cr.

Received funding from Dia Vikas Capital via CCDs/equity infusion

2017-2018 AUM crossed INR 200 cr.

Pahal was operating in 46 districts spread across 71 branches and four states - Gujarat, Madhya
Mar, 2018
Pradesh, Rajasthan and Maharashtra

Post FY18 Started disbursing Secured Vehicle Loans

© 2018 Deloitte Touche Tohmatsu India LLP 1

Source: Company Reports
Existing portfolio is dominated by group (JLG) loans with..
Group Loans Individual Loans Cattle Loans Used Car Loans

FY18
90.5% 9.0% 0.3%
(% of AUM)

Maturity of Existing and Existing and Existing and

Product Established Emerging Emerging

• Income generation • Unsecured loans - Working

activity, debt capital or purchase of
Purpose redemption, fixed assets • Livestock
agriculture, education • Secured loans : Small and
and consumption
Need this information for
Medium Entrepreneurs
Used Car Loans

• Member should be a • 12 Month Track Record • 12 Month Track Record

women with any MFI /Bank/NBFC • Minimum 2/3 year
• Rural Income < • Minimum 2/3 year stability stability at current place
Criteria
100,000 p.a. at current place • Need to have atleast
• 2 years of residence in • FOIR should be less than 2/5 Milking Cattle ; 2
branch operations 50% Bigha of land

Ticket size • 1st cycle: INR 15 - 25 • Unsecured : INR 35 – 75 • Unsecured : 50 – 200

(‘000) • 2nd cycle: INR 25 - 30 • Secured : INR 75 – 700 • Secured : 200 – 1,000

Interest Rate • 25.35% p.a. declining • 29.25% p.a. declining • 28%

• 1st cycle: 12-18

• Unsecured : 6-18
months • Unsecured : 12-24 months
Tenor months
• 2nd cycle: 18-24 • Secured : 12-48 months
• Secured : 6-36 months
months

© 2018 Deloitte Touche Tohmatsu India LLP 2

Source: Company Reports
Successful track record of growth in loan book and..

Consistent track record of growth in Gross Loan Portfolio

(Figures in INR million) CAGR (FY15-Q3FY18)
2,230
JLG IL
212

Gross Portfolio 46%

1,280
1,153 54
45 42%
JLG Loans
721
12

709 1,108 1,226 2,019 IL Loans 160%

FY15 FY16 FY17 FY18

No. of 39 49 64 71 Branches 22%

branches

…with
ATS fora JLG
healthy progression
and IL loans in average loan ticket size over time (Figures in INR thousand)

ATS - JLG ATS - IL

53.6
FY13-FY18
• The Average Ticket Size for JLG
loans has steadily increased over the
years to INR 24,315
29.6 29.9 28.4
24.3 • IL loans, which form a small
22.1 23.5
19.7 proportion of the total loan book,
15.0 15.8
12.0 have pushed up the ATS for Pahal’s
17.1 book
FY13 FY14 FY15 FY16 FY17 FY18

© 2018 Deloitte Touche Tohmatsu India LLP 3

Source: Company Reports
 Strong recovery in collection efficiencies

Average collection efficiency (%)

99.2% 97.6%
97.2%
96.0%
94.3%
93.3% 92.9%

Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18

% of branches with 95% + collection efficiency

71%

Branch wise collection efficiency

Sept-16 to Mar’18
67%

63%

Sept'16 Dec'16 Mar'17 June'17 Oct'17 Dec'17

No. of
57 59 64 70 72 71
branches

© 2018 Deloitte Touche Tohmatsu India LLP 4

Source: Company Reports
Diversified liability mix with access to a wide range of lenders

Borrowing Trend Borrowing Mix

Borrowed Funds O/S (in INR crore) Cost of Funds TL - Banks TL - Others NCDs/CCDs Subordinate Debt WC Loan
250 30%

3% 0%
200 FY18 – Cost of funds 211 4% 3% 6%
25% 3%
21% 18%
24%
29%
150
144 20%
100 120

87
15% 51%
50 62 15.3% 15.6% 15.2% 16.5%
65% 64%
58%
21% 11% 7% 12%
0 10%
FY14 FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18
FY18 – Average maturity of
Major Lending Partners Positive ALM Mismatch assets
FY18 – Average maturity of
Pahal has a funding relationship with NBFCs, private and liabilities
public sector banks 24.4
20.6
Banks NBFCs BCs 17.1
15.7
14.6 13.5
12.2
10.8

FY15 FY16 FY17 Q3-FY18

Avg. maturity of assets Avg. maturity of liabilities

© 2018 Deloitte Touche Tohmatsu India LLP 5

Source: Company Reports
 Organization structure

Board of Directors ()
Number of employees at
each position to be
mentioned in the bracket
Managing
Director()

Internal
Company Chief
Auditor & MANAGER Manager Associate Monitoring
CFO () Secretary Operating I.T Officer ()
exec. Asst. to HR() Back Office () Director () Training ()
() Officer ()
MD ()

Asst. State Asst. Mgr. Executive Manager

Front
Manager Sr. HR Head Operations Operation Individual
Desk Assistant ()
(Finance & Executive () () () Sr. Executive
& Manager()
Accounts) () ()
Admin ()
()
Area
Sr.
Manager Executive
Relationship
() Officer ()
Manager ()
Accounts
Account
Executive Branch
Officer () Manager () Quality
() Manager/
SBM Manager ()
()
Relationship Management
Asst. Manager ()
Branch Trainee ()
Manager
()
Credit Risk Manager
Manager () ()
Sr. FCO
() Officer
Training
Individual
Manager ()
Loan ()

FCO
() MIS Officer
© 2018 Deloitte Touche Tohmatsu India LLP () 6
Source: Company Reports
Board of Directors

Padamanabh Pundrikray Vora

• Former Chairman & MD, Industrial Development Bank of India. Has also served as the Chairman & MD of National Housing Bank
• Has served on the Board of Reliance Group companies – Reliance Home Finance, Reliance Capital Trustee Company, Reliance
Consumer Finance
• He is also serving as a Director at National Securities Depository Ltd and NSDL Data Management Ltd
• Also holds position Member- Task Force- MOU Department of Images of theseGovt.
Public Enterprises, director
of India
• Chartered Accountant and CAIIB

Venkatraman Iyer
• Global and Group CIO, Wockhardt Limited (Pharma, Hospital & Foundation)
• Has earlier worked with Star TV as Sr. Vice President IT and Digital Media
• Has also worked with Pfizer Ltd and served on its Board as well
• Has occupied various positions at IBM, TVS Motors, Xerox India, Canon India
• Has been selected as one of the vTop 10 CIOs by CIO Association of India in 2014

Kartik Mehta
• Career banker with more than 22 years of experience in the banking and financial services
• Has worked across various functions including corporate finance, treasury management, Retail banking and distribution,
Agriculture credit and priority sector and Microfinance during his banking career
• Has been associated as a microfinance practitioner and also been involved with some pioneering work in the banking
correspondent]
• Chartered Accountant and a Cost Accountant and also a qualified Certified Financial Planner (CFP).

Purvi Bhavsar
• Has more than 21 years of diverse experience in the financial services and telecom industries
• Starting her career with Kotak Mahindra Finance Ltd., she has worked in various functions including corporate finance,
retail banking, channel management, distribution and sales with Apple Industries, HDFC Bank, ICICI Bank and Vodafone
• She has also worked on the business correspondent model on the operational side with ICICI Bank
• Purvi was one of the select few within ICICI who was identified for a fast track career development. She has won several awards
and accolades during her professional career including the “Leading women in Telecom” for the year 2010

© 2018 Deloitte Touche Tohmatsu India LLP 7

Source: Company Reports
 Board of Directors

A.B. Panchal
• IAS Officer (Retd.), Worked as Additional Secretary to Govt. of Gujarat in Energy and Petrochemical Dept.
• Has more than 30 years of experience in the field of Industries, Administration, Rural Development etc
Images of these
• directors
Was associated with Bhavnagar Energy Co Ltd
• Has also worked as Collector for Bhavnagar district; Director of Employment and Training, Gandhinagar; District Development
Officer, Vadodara

© 2018 Deloitte Touche Tohmatsu India LLP 8

Source: Company Reports
while maintaining operational efficiency and book quality

Measures to improve operational efficiency Impact of on productivity measures

• Digitization of whole loan process is the first step to reduce

TAT Current Targeted
Productivity Measures
(FY18) (FYXX)
• Loan origination via tablet is one such initiative which will
eliminate manual intervention and reduces cost of the
physical transport of forms TAT (days) 12-13 5-6
• Promotion of ECS as a mode for monthly repayments in
order to reduce the back office work involved Field productivity
• (active borrowers/field staff)
Any additional points
Opex ratio (% of AUM)

Measures to improve underwriting process and Impact on GNPAs, NNPAs

management of bad loans

• Standardize the way to measure customer’s creditworthiness

via introduction of the credit scoring model

Commentary on same

© 2018 Deloitte Touche Tohmatsu India LLP 9

Source: Company Reports