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Financial inclusion for 1 mn, financial literacy for 7 mn

Ananya Birla envisions Rs200 billion portfolio with 1500+ branches serving 0.1 million villages pan India and to diversify the business in individual & MSME loan (secured/ unsecured):

Financial inclusion for 1 mn, financial literacy for 7 mn

Svatantra Microfin, one of India’s fastest growing MFIs, with total 802 branches, serves rural women customers. Ananya Birla, Founder, Chairperson & Director, Svatantra Microfinance, is one of the youngest founders within MFI industry in India to have successfully implemented and profited from the business in just 5 years. She talks about growth in its network, customers and products & services:

Mehul Dani: Briefly describe Svatantra’s network and business growth in the current FY?

Ananya Birla: We have a presence in 19 states, 90,000 villages and 340 districts in India. We have opened 110 branches during this financial year, which has increased our reach. Gross portfolio / AUM has increased by 55% to Rs70 billion as of the Dec 2022. We have recorded increase in average loan ticket size on account of higher cycle loans.

What is the customer base? What is the CAGR in customers of last 3 financial years?

Financial inclusion and rural women empowerment remain the central objective of Svatantra Microfin with 100% women borrowers. From inception since 2012, we have helped financially include more than 4 million women in deep rural India by means of providing loans and opening bank accounts. Our active client base has increased to 2.1 million borrowers as on December 31, 2022, from 1.51 million a year ago. Our customer base has increased from 1.01 million in 2019-20 to 1.68 million as of 2021-22, with 29% CAGR in the last 3 years. By the end of the current FY, we expect to reach 2.3 mn.

Which new major products & services have you introduced this year? How do they differ in features, processes, TAT?

Apart from mediclaim, Svatantra also provides M-Swasth, a 24×7 doctor on call service, which has reached 45,981 rural customers since its introduction in May 2022. Svatantra provides ‘kutcha’ house insurance to its women borrowers, which has helped many of them to overcome the difficulties post natural calamities such as flood and cyclone.

A loan provided adds about 2x of economic wellbeing. 3.5 million women borrowers have been impacted and each loan generates impact on earning (1:2) as well as family welfare and has touched life of 15 million individuals. Cashless disbursements and door-step collections are saving about 25 days of each borrower, thereby preventing Rs300/day loss to daily wages. There has been daily wage loss prevention totalling of about $0.3 bn. A medical cover has been provided to 1.7 million women borrowers, with direct claims support of $10 mn. The benefit excludes the savings for borrowers on negotiated price of treatment. Overall services are discounted by about 25-30%. Tele OPD consultations have been provided to 45,981 women borrowers, at a cost of Rs600 per consultation, with saving a day loss in wages.

We have provided home loans since inception. 33,312 homes have been created through our cumulative loans amounting to $0.3 bn. Each home loan creates inter-generational equity. About 65% of the borrowers are women as both direct and primary members. Daily wage loss prevention is estimated of about $0.5 bn. Loans are provided at home in unique branchless model, with credit underwriting done at home, saving more than 10 to 12 days of loss of wages/earnings, at about Rs1000/day). We have provided financial literacy to 7 million individuals, including 3.5 million women borrower. We have created financial literacy to both women and spouse in microfinance. In case of housing finance, the literacy is provided to all the members.

We have enabled financial inclusion for about 1 million rural women borrowers, who have never accessed finance from formal institutions. We have been doing financial inclusion of customers who are new to finance. Rural reach of Svatantra enables true financial inclusion.

What are your targets and plans, including branch expansion and rationalization plans, for the current FY?

Svatantra Microfin is one of the youngest microfinance organizations with highest credit rating, GPTW (Great Place To Work) certification and with one of the best quality portfolios. We aim to emerge as the largest and valuable NBFC-MFI with Rs85 billion portfolio by FY23. Further, by FY26, we envision to impact more than 5 million households with Rs200 billion portfolio and increase the team size to 13,000 employees. With business scalability in mind, our goal is to open 1500+ branches serving 0.1 million villages across India and diversify our business in individual/ MSME loan (secured/ unsecured).
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