Upload
others
View
7
Download
0
Embed Size (px)
Citation preview
1
Sarala Development & Microfinance Private Limited
Annual Report 2016 – 2017 Empowering Women through Sustainable Finance
2
Introduction :
Sarala was first established in 2006 as a not for profit entity,
constituted under Section 25 of the Indian Companies Act
1956, under the name of “Sarala Women’s Welfare
Society” (SWWS). The purpose for setting up the
organization was to provide Microfinance and other related
welfare services to women in the state of West Bengal,
India. Co-promoted by Dr.Arabinda Sinha, a retired
professor of Physiology of the New Jersey School of
medicine, USA, and Pranab Rakshit, a finance professional
based in Kolkata, SWWS modelled its operations on The
Association of Social Advancement, Bangladesh (ASA).
The co-promoters visited, received orientation in
Microfinance from ASA as well as technical inputs for
commencing operations in the state of West Bengal India.
In 2010, SWWS acquired a Non-Bank Finance Company
(NBFC) called Unnati Trading and Fincon Pvt. Ltd. The
entire Microfinance business of SWWS was transferred to
Unnati against 94.5% equity. This company was registered
as an NBFC-MFI in 2014 and as of September 2015, it
changed its name to Sarala Development and Microfinance
Pvt. Ltd. (SDMPL or Sarala).
As on March 31, 2017, Sarala served its 1,33,259 clients
through its own network of 66 branches spread over 930
villages in 20 districts covering three eastern Indian states
of West Bengal, Bihar & Assam.
A fresh ‘NBFC-MFI’ Registration Certificate in the name of Sarala Development & Microfinance Pvt. Ltd was recently issued by
the Reserve Bank of India on January 22, 2017.
RBI Registration Certificate:
3
Mission:
Our Mission is to catalyze empowerment of sustainable women micro-entrepreneurship in under-privileged families across India through the provision of relevant financial services
Vision
Our Vision is to be a world class
organization in the field of
Microfinance admired for building
trusting relationships with our
clients, employees, financial
partners, while delivering
measurable social impact.
4
Our Lenders
Number of Lending Banks
(2016)
Number of Lending Banks (2017)
State Bank of India State Bank of India
UCO Bank UCO Bank
Vijaya Bank Vijaya Bank
Indian Overseas Bank Indian Overseas Bank
IDBI Bank IDBI Bank
Union Bank
Syndicate Bank
Bandhan Bank
Yes Bank
Bank of Barod
Number of Financial Institutions 2016
Number of Financial Institutions 2017
MAS Capital MAS Financial Services
Reliance Capital Limited Maanaveeya Development & Finance Private Limited
Reliance Home Finance Jainsons Finlease Limited
Religare Finvest Limited Religare Finvest Limited
Maanaveeya Development & Finance Private
Limited
Reliance Finance Limited
Capital First Limited
5
Contents:
Board of Directors
Core Management Team
Our Statutory Auditors and Partners
Message from the desks of the Chairman and the Managing Director
Organogram
Shareholders of Sarala
Our Journey towards Growth
Outreach
Product and Services
Customer Services & Governance
Success Stores
Others Activities/Achievements
Energy Lending Initiative
Statutory Reports & Financials
Directors Report and statutory disclosures
6
Board of Directors:
Dr.Arabinda Kumar Sinha Chairman A US - based Non-Resident Indian and US Medical College professor having extensive experience in
managing development projects in India, with a good command of planning and execution of development projects in a sustainable manner.
Mr.PranabRakshit, Managing Director
A Master in commerce having a long experience in the field of Finance and Accounts in different corporate houses. He is currently on the Board
of SA-DHAN, one of the Self-Regulatory Organizations for Microfinance Institution in the country and Secretary, AMFI-WB an Association of
Microfinance Institution of West Bengal.
Mr.Kuntal Banerjee, Executive Director
Post Graduate Diploma in Financial Management, having wide experience working with Banks and Financial institutions for more than 16 years.
Mr.Biswa Bandhu Mohanthy, Independent Director
A career Banker and post- graduate in Political Science, retired as Chief General Manager, NABARD. Wide ranging experience in microfinance
operations and rural development in India and abroad, visited 15 countries in connection with various study visits, training programs and
assignments, currently associated with studies concerning the strengthening of microfinance activities in India as well as countries in Africa.
Mr.Ganesh Chandra Modak, Independent Director
An experienced Microfinance Practitioner for more than 20 years in West Bengal and Bangladesh. He is the CEO of Society for Model Gram
Bikash Kendra, a reputed and successful NGO engaged in microfinance activities for more than 11 years in West Bengal
Mr. GautamMukhopadhyay, Nominee Director
A Honours Graduate in Science, a former Asst. General Manager, State Bank of India having served in important assignments like Asst. General
Manager (Advance Monitoring Cell), Asst. General Manager (Centralized Credit Processing Cell) and Regional Manager of 42 branches under his
control.
Mrs. Setu Das Roy , Independent Director
7
Practising Law on Company, Contract, Civil, Land matters, Banking, Property Documentation & Due diligence, Sales/lease deeds, and Labour Law
at the Hon’ble High Court , Calcutta . 13 years of experience including Arbitration matters In addition, Market & Business Analysis & reports
preparation for Management, Founder of a Non-Profit Organization named as Association for Benevolence of Children Development.
Core Management Team
S.N Name Designation Qualification Experience Department
1 Manab Sen Head of Finance,
Corporate Finance
Officer
Alumni Indian
Institute of
Management
Ahmedabad,
Bachelor Degree in
Advance
Accounting &
Business, CAIIB.
More than 40 years’ experience
predominantly in Banking and
Financial Services, including Private
Equity Management, and Cross
border M&A. Manab has
successfully worked in 6 start-up
situations, leading companies to
successful IPOs or other exits. His
role includes sourcing financial
resources, managing a team of 4
finance professionals in the finance
team, advising on strategy as well
as implementing Sarala’s
Capitalization plan
Finance
2 Subrata Singha Head of Operations MBA More than 10 years experience in
corporate including Microfinance
dealing with credit , risk
perspective & other Financial
issues
Operations
3 Kavi Ratan Dasgupta General Manager
HR
MSW, Post
Graduate in
Management
Ex Additional General Manager in
Powergrid Corporation of India. 35
years in HR & Administration
Human Resource
Department
4 Rohit Kumar Singh Company Secretary ACS, M.Com, LLB 3 Year experience in Microfinance
Compliance &
Supervision
5 Soumyendu Sett Deputy Manager
Finance
B.Com 17 years in production industry&
10 years in Microfinance
Finance
6 Joydeep Sarkar Deputy Manager
Finance
MBA 4 years in Insurance Sector and 8
years in Microfinance
Finance
7
Tapesh Ghosh Deputy Manager HR B.Com
12 years in corporate & 8 years in
Microfinance
Human Resource
Department
8 Sweta Hazra Accounts Manager CA (Inter) 7 years in Microfinance Accounts
9 Pintu Mondal Senior Accounts
Executive
B.Com 12 years in Accounts & Finance Accounts
10 Amit Banerjee Deputy Manager
Systems & IT
MBA-IT
(Microsoft Certified
Professional)
8 years as system administrator Systems & IT
11 Subham Hazra Accounts Executive MBA 5 years in Microfinance Accounts
12 Chinmoy Bhanja Deputy Manager
Operations
B.A 10 years in Microfinance Operations
13 Sujit Bandyopadhyay Asst. Manager IT MSC – IT 6 years in computer training as
faculty member
Systems & IT
14
Sk.Maddassar Hossain
Wasri
Deputy Manager
Audit MBA – Finance
11 years experience in Managing
Finance, Operations, Training,
Cooperative & Microfinance Internal Audit
8
Our Statutory Auditors :
M/s. S.R. Batliboi & Co. LLP, Audit Firm (Firm Registration No. 301003E) also known as E & Y,
one amongst the BIG FOUR Audit Firm, situated at 32 Camac Street, 3rd Floor, Block C, Kolkata-
700016, were appointed as the Statutory Auditors of the Company in the 24th Annual General Meeting of
the Company held on 03rd August 2016 to hold office from the conclusion of the 24th Annual General
Meeting for term of consecutive five years till conclusion of the 29th Annual General Meeting, subject to
ratification of the appointment by the members at every Annual General Meeting.
Association Memberships:
Sarala is a member of SA-DHAN, a
recognized Self Regulatory Organization (SRO)
by the Reserve Bank of India.
Sarala is also a member of AMFI-WB, a state
level association of Microfinance Institutions in
West Bengal.
Insurance Partners:
SARALA has tie-ups with Life Insurance Corporation of India (LIC), Housing Development Finance
Corporation Ltd Life and Dewan Housing Finance Corporation Ltd for providing life insurance coverage to
all clients of Sarala along with their spouse or guarantors. Presently over 266,518 lives are covered with
the insurance companies. The sum assured is equal to the amount of loan given by SARALA.
9
Message from desks of the Chairman and the Managing
Director
Dear Readers,
We are happy to note that during last year Sarala Development &
Microfinance Private Limited was able to provide small business
capital to 15% more women than in the previous year (115,582 in
the year 15-16, 133,259 in the year 16-17). Demonetization
somewhat slowed down this expansion. By the end of this current
financial year, we hope to double the number of women that Sarala
serves now. I hope, part of this increment comes from serving
women who are slightly below the economic level that we are
serving now. I also hope, that part of this increment will come by
forming groups few kilometres away from the economic growth
centres in the district, sub-divisional and railway station towns.
Our borrowers: We realize that providing some capital for income
generation is not the panacea for reducing poverty. Together with
health, nutrition, and education, one has to pay attention to
livelihood training and market linkage. I hope, our effort to create
village level entrepreneurs will be further intensified. The
introduction of high volume loans to some chosen few “fast
growers” is a step towards the right direction. At the same time, we
have to be extremely careful that we do not increase our borrower’s
indebtedness. It is unfortunate that we cannot promote savings by
taking saving deposits from our borrowers. Towards the end of
borrower’s asset creation, we are planning to introduce high-value
cottage industries like fresh water pearl culture, Red Sandal wood
planting, and hardwood (Teak, Mahogany) tree planting.
Our staff: I hope, the Sarala board members and senior managers
share my sentiment that each of Sarala staff is like my brother or
sister. Let our staff own Sarala. Let us initiate a process so that staff
members are given optional shares of Sarala for part of their
bonuses. Together with the ultimate benefit of our borrowers and
well-being of Sarala, I would like to pay attention to the personal
career development of each of our staff. Many of us take initiatives
for self-improvement others need some nudging. Let us require
some initiative for self-improvement for assigning bonuses.
We now have a Board approved Succession Plan for our senior
management. I urge the management to quickly translate that Plan
into action.
Our governance: I am happy to note the broadening of Sarala’s
Board, formulating, recording and disseminating various policies
required by the regulators and forming various frequently meeting
board committees. I hope, the current board and the Management
will focus on recruiting few other female board members. Let us
recruit one of our borrowers into Sarala board. If we must conduct
Board’s business in English then a non-English speaking member
may be provided with a personal translator.
Future direction: Coupling income-generating capital with
means of savings is a better way for providing economic support.
Towards that end, in the future, Sarala is planning to apply to
become a deposit taking small bank.
With Best Wishes,
Chairman Managing Director
As you have done in your recently shared Annual Report in the same format, its
perfectly ok. It should come in one page as it has been done by you appropriately.
10
Organogram :
Systems & IT
( Chief of IT)
Executives
Corporate Finance (
Chief of Corporate
Finance)
Internal Audit
(Chief Internal
Auditor)
Deputy
Executive
Officer
Compliance &
Supervision (
Company Secretary)
Executives
Executives Executives
Divisional
Managers
Executives
Area
Managers
Credit
Officers
Board of Directors
Managing
Director &
CEO
Finance ( Chief of
Finance/ CFO)
Operations ( Chief
of Operations) Executives Human Resource (
Chief of HR)
Accounts (
Chief of
Accounts)
Branch
Managers
11
Shareholders of Sarala:
Sl.No Name of Shareholder
Total No of
Shares as on
March 31,
2017 Value/share Total Value (Rs.) % of Holding
1
SARALA WOMEN WELFARE
SOCIETY 12,371,760 10 123,717,600 94.50%
2 SARALA HEALTHCARE PVT. LTD. 576,000 10 5,760,000 4.40%
3 PRANAB RAKSHIT 113,480 10 1,134,800 0.84%
4 ARKA MUKHERJEE 16,000 10 160,000 0.15%
5 SUBHAYAN SINHA 8,520 10 85,200 0.07%
6 KUNTAL BANERJEE 6,000 10 60,000 0.05%
TOTAL (INR) 13,091,760 10 130,917,600 100.00%
12
Our Journey towards Growth:
Particulars March 2014 March 2015 March 2016 March 2017
Borrowers 19,478 51,427 115,482 133,259
Groups 1,198 3,628 6,760 8,495
Branches 12 43 65 66
Staff 62 228 320 364
Assets under
Management
(Rs.in Millions) 84.25 421.26 1169.85
1637.90
On time
Recovery Rate 99.98% 99.98% 99.91%
99.03
Loan Liability
(Rs. in Millions) 29.16 86.46 479.68
990.76
13
Particulars
Earning Before
Taxes(EBT)/Revenue%
Return on Average
Assets (ROAA)%
Return on Average
Equity(ROAE)%
Portfolio at
Risk (PAR)>90
days %
2013-14 Audited 49.77% 7.78% 10.65% 0.17%
2014-15 Audited 35.92% 4.91% 8.35% 0.03%
2015-16 Audited 34.21% 6.03% 18.52% 0.10%
2016-17 Audited 30.33% 5.42% 25.44% 0.91%
Particulars March 2014 March 2015 March 20116
March 2017
State 1 2 3 3
District 13 14 18 20
Active Loans (Rs.in
Millions) 83,652 76,574 115,482
133,259
Portfolio at risk > 90 day 0.16 0.04 0.10
0.79
14
Outreach:
We are presently operating in the 13 Districts of West Bengal, 4 Districts of Bihar &
3 Districts of Assam. The geographical outreach can be summarized is presented hereunder
West Bengal: Assam
Bihar:
15
Product and Services:
Our present Loan product Details of Sarala Development & Microfinance Pvt. Ltd
Parameters Product 1 Product 2
Name of Product New Bi-weekly BC- Weekly
Effective status 01.04.17 To Till Date Since inception to till date
Rate of Interest 23.50% p.a. 23% p.a.
Moratorium 14 Days To 27 days 7 Days
Repayment
Frequency 14 Days (Fortnightly) Weekly
Loan Amount Rs. 15000, 18000, Rs.20000 Rs.15000, 18000, Rs.20000,
Rs.25000
Processing Fees 1% Nil
Service Tax[1]
As per Rate applicable- On Processing
Fees Nil
Insurance Fees 0.5% (coverage for borrower and
guarantor/nominee)
0.5% (coverage for borrower and
guarantor/nominee)
Interest
Calculation Diminishing method
Purpose Income generation Activities
Customer Service & Governance:
Being one of the growing Microfinance Institution, Sarala has always believed in client protection and fair
lending practices. Hence we have invested significantly on financial literacy programs, customer
awareness on fair practices code, education on ill effects of multiple borrowing, avoidance of order-
indebtedness, importance of maintaining a healthy credit history, issues relating to ghost lending and
safety of customer information. We have also trained all our frontline staff on fair practices code,
transparency, respectful treatment of customers, and grievance redressal mechanism, Sarala follows all
guidelines issued by Reserve Bank of India (RBI) on Fair Practices Code for NBFC-MFIs and has also
adopted Industry Code of Conduct developed by MFIN (Microfinance Institution Network).
Customer Retention Programs
Sarala has been maintaining a satisfactory customer retention rate and observed an increase of 5% in
2016-17 compared to the previous year despite adverse impact on our operations due to demonetization
and increased credit bureau rejection rates.
Year
Overall Retention Rate
(%)
2014 94
2015 90
2016 86
16
Customer Grievance Redressal
Sarala has adopted a well-structured Customer Grievance Redressal Mechanism and provides customers
reliable and easily accessible interface for timely and fair resolution of enquires & complaints. Our Board
approved policy on customer grievance redressal aims to minimize the instances of customer complaints
through proper service delivery and review mechanism.
Customer Helpline No.
Customer Helpline No is one of the important way of solving enquiries and grievances. The help desk
ensures that all complaints are tracked, resolved and if required, escalated on a timely basis.
Grievance Redressal Officer
The Board has appointed a Grievance Redressal Officer who is responsible for ensuring timely resolution
of all complaints received through helpline no.
Customer Enquiries and Complaints received & resolved during the year 2016-2017 in different
quarters are specified below:
Financial Year 2016-17
(Quarter wise details)
Total Complaints Received Complains Resolved till March
31, 2017
April – June (Q1) 129 129
July – September ( Q2) 40 40
October – December (Q3) 216 180
January – March (Q4) 86 50
2017 91
17
Our Assessments:
For the financial year 2016-17 CARE rating had
assigned the long term credit rating to the
Company as BBB- for Rs. 100 Crores Portfolio.
The Management is hopeful that the ratings will
improve in near future and the Company would
be able to access resources at a more
competitive prices. Further, Sarala has obtained
"BWR MF3" grading from Brickwork indicating
the MFI's ability to manage its operations in a
sustainable manner. Your Company has also
undergone the Code of Conduct Assessment
(COCA) grading exercise by ICRA obtaining “C3”
as its Code of Conduct Assessment Grade which
signifies average performance on COCA criteria.
Internal Audit:
The concept of Internal Audit has drastically
changed from a system of merely checking the
arithmetical accuracy of accounting data to a
system of appraisal of the effectiveness of risk
appraisal, operations, accounting, financial
management, human resources and controls as
an aid to management towards achieving its
goals.
The main purpose of having an Internal Audit
System in Sarala is to verify and review the
activities of all branches so as to assist them in
seeing that, the operations are being done
effectively, that current transactions are
promptly and completely recorded, the assets of
the business are properly protected and
accounted for and that the business, portfolio, is
adequately protected against waste, fraud and
loss. The purpose of this form of control is to
ensure early detection and rectification of errors
and to minimize recurrence in future. It ensures
that various rules and circulars laid down by the
Management are actually followed and acted
upon by all the Branches.
Sarala has developed a comprehensive Audit Process to cover each department processes and risk component in preparing audit processes at branch/Region/Division/Head Office. Based on the operations and monitoring parameters of Sarala, audit shall be done for following entities: Branch Office, Regional Office and Head Office
Scope of Audit
Sarala’s Internal audit broadly covers the
following:
Financial reports and records: receipts,
vouchers, cashbooks, ledgers, client passbook,
bank passbooks, cash balances.
Loan document: Loan applications, promissory
notes and other documents required as per
policy related data entered in Excel
spreadsheets or software.
18
Client visits: check meeting discipline – timing,
conduct, staff and client discipline, check
passbooks interact with clients can also check
loan utilization.
Other observation: Staff disciplines, hygiene,
file arrangements and cataloguing
1.1 Independence
The Internal Audit Department of Sarala reports
functionally to The Board through its Audit
Committee and administratively to the
Managing Director/Chief Executive Officer.
Head-Internal Audit also has direct access to the
Chairman of the Audit Committee. To permit
the rendering of impartial and unbiased
judgment essential to the proper conduct of
audits, internal auditors will be independent of
the activities they audit.
1.2 Internal Audit Role in Risk Management:
Internal Audit function of Sarala focuses on the
following Risk Management perspectives during
the execution of the Internal Audit activity.
✓ Organizational objectives support and align with the organization’s mission;
✓ Significant risks are identified and assessed;
✓ Appropriate risk responses are selected that align risks with the organization’s risk appetite; and
✓ Relevant risk information is captured and communicated in a timely manner across the organization, enabling staff, management, and the board to carry out their responsibilities.
Our Status Report for Internal Audit on March 31, 2017 is highlighted below:
Sl. No. Parameters FY 2016-17
1 Total No. of Audit planned
i Branch 246
ii Head Office 8
2 No. of branches Audited
3 No. of Audits
i Regular Audit 187
ii Snap Audit 10
iii Special Audit 1
iv HO Department Audit 3
4 Audit Report Status
i No. of Audit Report Finalised/sent 178
Ii Report yet to be finalised/sent 9
Risk Management
To build a robust risk management framework
for its operations, the Board of Sarala has set up
an independent risk management committee of
the board as an effective step of mitigating
different risks, involved in the business. The
Committee has framed a risk management policy
which has been approved by the board recently.
The committee would be addressing inherent
risks and developing controls for Sarala’s
existing line of business as an MFI. The
committee has reviewed risk management
policies in relation to various risks including
portfolio, liquidity, interest rate and operational
risks, Investment policies and strategies,
regulatory and compliance issues in relation
thereto are also reviewed by the Committee.
Reporting and MIS:
19
Our Information systems (IT systems) in place at
the moment comprising “SMART” and
“ERECON” provide updated information on
RE/EE and will be able to extract reports as
required by Blue Orchard for our RE/EE Loan
portfolio. These reports can be customized as
required for reporting. The Central Database is
maintained at our headquarters in Kolkata with
suitable back up.
Human Resource
At Sarala, we believe in Employee Power &
‘Employee First’ is our motto. Sarala has a
culture based on a set of core values of Integrity,
Transparency, Respect, Professionalism and
team work tied together amidst diversity. For us
it has been a journey of striving to work for the
development of our customers.
At Sarala you will see all employees share a
unified vision & purpose – the HR team has been
successfully enabling this through its initiatives.
Compensation Policy
Sarala has believed in paying its employees in an
equitable and fair manner. We endeavor to link
our rewards package to the individual’s profile,
performance and role in the organization.
Note on Demonetisation Background On
November 8, 2016 :
The Government demonetized the then existing
500 and 1000 rupee notes, effectively taking
over 80% of cash out of circulation. The new
bills were in short supply leading to restrictions
on cash withdrawal and creating a cash crunch
for the ensuing months. This had significant
impact on the microfinance sector which deals
with a borrower base that predominantly earn
their wages/incomes in cash.
Impact on the MFI Industry: The first impact has
been on the collections for the MFI Industry
which dipped to 86% from its standard
collection rate of around 99%. Consequently the
collection discipline has been derailed resulting
in higher Par & Provisions. As MFI’s were not
allowed to collect the repayments through old
notes and deposit the same in banks, this
further impacted the collections. The RBI
dispensation on classification of NPA (allowing a
further 90 days over the 90 days overdue norm
for classification as an NPA) has been
misconstrued and deemed as repayment
holidays, adding woes to the already affected
situation.
Since cash limits were common for financial
institutions and retail, no cash disbursements
were possible to a large section of MFI
Borrowers, especially new borrowers, leading to
a tremendous impact on business during the
last two month.
Impact on Sarala:
Challenges faced:
a. Demonetization led to a slow-down of
business momentum in Q3 and Q4, political
interference and rumors of loan waiver
disturbed the credit discipline among our
customers, affecting collections. Paucity of
currency necessitated reduction in business
volumes. New customer acquisition for both
group lending and individual lending business
was suspended during the period. The Company
made cash disbursements to select repeat
customers with good credit track record to
smooth their cash flow.
b. Minority concentrated area hit the most.
c. Small Businesses and Wage earners struggling
to repay
d. Political interference in Assam and Bihar
e. Small businesses and Labourers impacted due
to cash crunch in Bihar, Jharkhand and West
Bengal
20
f. Loan waiver rumors in few areas of West
Bengal.
g. Impact on Business volumes: Impact on
portfolio quality. Our NPA levels saw a
significant rise due to demonetization related
over dues. Collections saw a dip and Cumulative
Repayment Rate decreased from November,
however recovered later to some extent.
The Effects of the Demonetization on
Repayment Rates from November, 2016-March
31, 2017
Cumulative Repayment Rate during
Demonetisation:
Month
Cumulative Repayment
Rate (%)
November
83
December 88
January 91
February 94
March 97
RBI dispensation on Asset Classification of over
dues originating was not considered by the
Company whereby a short-term deferment of
60/90 days could be applied to dues payable
between November 1, 2016 to December 31,
2016 for the purpose of classification of loan
accounts as sub-standard and as a result, the
provision for the year is higher by INR 1.42
Million. Excellent recovery efforts in Mar-17
increased the Repayment Rate to 97% in Q4.
Collection efficiency is likely to improve
gradually over the next few months since
external interventions have reduced & many
customers have started making repayments.
Impact of Demonetization will spill over into the
next financial year with increased credit costs.
Sarala shall follow a cautious approach towards
business in the stressed clusters to contain the
credit quality for the first two quarters of the
next year.
Initiatives taken:
i. The Company has sensitized its staff on
non-coercive collections and offered
extended repayment time for
customers, continuing a healthy
relationship with them during such
testing times.
ii. The Company offered continued service
to good customers by providing
them with repeat loans, largely in
cash wherever possible, enabling
them smoothen their cash flow.
iii. Focus on Collections: The Collections
Team focused on repayment
collections across difficult areas,
providing the much needed support
to staff. The Company distributed a
set of relevant documents with all
Field staff to enable them to
convince customers and family
members about the false rumors
and importance of repayment.
Branch wise based Action plans
were put in place, providing fulltime
support for collections while
mentoring of the branches.
iv. Focus on Cashless collections: The
Company encouraged its customers
to use the cashless payment options
such as Cheque, POS and NEFT.
21
Health Care Initiative :
Since 2008, Sarala provides primary care facility to its poor clients and their entire families through its
associate concern “Sarala Healthcare Pvt Ltd.” which provides services toward the weaker section of the
society through its mobile health clinics, distribution of low-cost generic medicines, MBBS, MD, Doctors
treat the patients. Doctors move to the group sitting locations to give door –step service to the poor
women. A health card is provided to every woman, against which the clients and her family members can
visit doctor innumerable times through the period of microfinance loan provided by Sarala. They can also
come for sugar test, ECG test etc.
Village Level Entrepreneur, program was started in the month of December 2016. The objective
is to enhance the Livelihood through Core Business Support. Here Sarala is trying to help the VLEs to
make them self-employed and building entrepreneurship. Besides that Sarala is trying to increase their
income level through this program by providing them few saleable products, like Induction, Mixer
Grinder, Frying Pan, Kadai, Dish wash, Hand wash, Soap etc. which they can sell and made a little profit
from it and in future they can become small entrepreneurs. Sarala provides awareness to our VLEs, how
to save energy or the use of nonconventional energy products. We gave them product demonstration. We
distribute leaflets (product brochures), demonstration of the products, arrange seminars, training free of
cost.
22
Managing Director’s deliberation with the Village Level Entrepreneur at the Head Office
Success Stories :
Self-drive from sadness to joy
Pratima Barman is a borrower of Sarala. She
and her husband Pritu Barman live with their
two children in a village called Pathan Para,
Cooch Behar District of West Bengal. Their
occupation was daily wage labourers.
“I am glad that, I came across Sarala, because
now I have my own business, and my kids are
getting a good education.”
“We were daily wage labourers. During the
seasonal time of work, we could manage
somehow our daily expenses; but during off
season there was no work for us. It was very
difficult for us to have two meals daily. We were
unable to give good education to our children.
My situation was getting worse. Those were the
most poverty stricken days in our life; I was
helpless and worried about my children’s
education and upbringing. The times when we
need help the most, are the times when you see
the real pain of not having the help you need.
During one such time, Sarala was providing
support to my nearest village, and I heard about
the support they were providing. I came to Sarala
office, and spoke to the Branch Manager, about
what I heard regarding Sarala and enquired on
how it works. Then I applied for a loan of
Rs.20000/- to open a grocery (Mudikhana) shop.
My loan was approved from Salara Haldibari
branch on 25/02/2015. By that loan, I started a
Grocery shop, and now I am very stable. Now I
don’t go for daily wage labour anymore. My
elder daughter is studying in class six and my
younger son is studying in class four. I want to
take more loans to start a big shop and increase
my business. It is because of Sarala today; I can
feed my children and take better care of my
family by trying to give them a better life.”
23
AKHIRA BIBI’S STORY
Akhira Bibi is a borrower of Bethuadahari
branch. She lives with her husband and with her
two kids, one daughter and one son in Tetulberia
village. She is our borrower since past four
years.- Nadia, West Bengal.
“I have one prayer to Sarala, that when I was in
need, helpless and suffering from poverty and
distress, there was no one to help us, Sarala has
freed us from all of that grief and made me
financially stable and independent so that I can
take better care of my family. There are many
people who suffer from the same pain every day,
especially the women folk in the village like us,
please do come forward and do the same for
them.”
“Some time ago, one of Sarala's Employee, came
to visit our Home, and asked me, what did you
do with the loan which Sarala has given to you?
When I heard that, I swooned for a moment, and
I remembered the very first time when I heard
about Sarala. It was one evening; I was standing
with my neighbours, to take water. During that
time two strangers came forward and asked me
and my neighbours – can we talk with you? I
was feeling shy, like others village women, and
spoke to them and came to know about Sarala
and its work.”
“Due to poverty and needs, without any
hesitation, I told them to come the very next day
in the evening. Poverty was the only friend at
that time, the thoughts which reeled in my head
were-have to repay the loan, which I took from
Mahajan or the money lender, have to educate
my children, have to fix the house, thinking all
those circumstances, I could not sleep that night.
Next day I spoke to 12-15 women about Sarala's
work, and I told them to come, to my home. In
24
the evening we all spoke to Sarala's Employee,
and decided that 10 of us will take a loan.”
“Within 15 days we got a loan of Rs.8000/-.
Then I started my work with great passion.
Infact, I started to work more and after that, I
repaid the load which I got from the Mahajon or
the money lender, and then I bought books for
my kids. At first, I had only one Ttat (one type of
machine for stitching saree) now I have 4 Ttat
and two workers who are working for me. Now
my kids are going to school, with books and
good clothes, I have rebuilt my house, and all
this I did with the help of Sarala in four year
time. It is because of Sarala we are now
financially stable.”
KULSAN BIBI
Kulsan Bibi has been with Sarala for the past six years. She is from Faridpur, Murshidabad and belongs to Dalia group. She has two sons and five daughters. Her businessis of Brooms. She and her husband EmanSk, work togetherin this business for the last four years. In the beginning, she and her husband were working alone to make all those brooms. After the birth of their children, the financial needs were increased. Then they wanted to expand the same business and to educate her children and get them married. They were very worried during that time due to some financial crisis. So she asked one of her neighbour, whom to go and where to go. There she came to know about Sarala and its work. She went to Rejinagar branch of Sarala. There she applied for the loan of
Rs.8000/-.From Sarala, she received a loan and increased her capital for business. At first she took a loan of Rs.8000/- thereafter, she took Rs.9000/-, after that she took an instalment of Rs.120000/- & 15000/-. And she repaid her loans. Now she has taken a loan of Rs.20000/-. She does business like, buying coconut wood, at the price of Rs.3200/- per 100kg.With this 100kg coconut wood, she makes 250 brooms. To make those brooms it takes almost 12 days. She and her husband work together for this. Then she sells those brooms of Rs.250/- per piece. Among her five daughters, three are married, other children are studying. Her dream was to educate her children, get them married, see them well settled and enlarge her business. Today, she is financially stable enough to fulfil all her needs and take good care of her family.
25
Energy Lending Initiative :
Sarala Solar Program –
One of our important initiatives has been in the
field of renewable energy. Sarala has been an
early entrant and a successful player in financing
the acquisition of Solar Lamps. For this Sarala
was recognized as a success story by USAID
under a program known as PACE-D. This
initiative has set us apart from most other
Microfinance organizations in India.
Sarala commenced its Solar Program in June
2015. A total of 66 Branches are covered in the
program over 13 districts (counties) in West
Bengal and 3 each in Assam and Bihar. As of
March 2017, we had cumulatively sold 130,907
units, with a total value of INR 237 million. Of
this, our cumulative financing was for a total
amount of INR 153 million. As of March 31
2015, the outstanding solar portfolio stands at
INR 10.7 million covering 11,105 borrowers.
Sarala plans to expand its number of Branches
to over 300 in 5 years all of which are expected
to be part of our RE/EE program. Here is the
summary:
Credit/Loan Process:
1. As aforesaid, Solar Products are being
provided to customers in cash or
through Credit / Loan.
2. Solar Product Loans are interest-free
with no other costs included.
3. To get a Solar Loan, a prospective client
must be a client of Sarala MFI with a
Microfinance Loan
4. Once a client avails a Microfinance Loan
(Income Generation Loan), there is no
26
exclusive credit appraisal and
sanctioning process required to avail
this loan, since, the client already was
appraised for her bigger income
generation loan followed by approval
and sanction of the same by the Branch
Manager.
5. There is a Loan Application form which
needs to be filled up followed by
approval of the concerned Field officers
and Branch Managers.
6. The Delivery takes place at Client
doorstep, or at Branch office as
convenient for the customer.
7. However, for Cash sales, the Buyer
needs not to be a client of Sarala MFI.
8. There is a separate database for Solar
Program with Loan tracking system,
Client details, Disbursement and
collection of solar loans, delinquency
management of the loans and inventory
control.
9. Each of the products being facilitated
are with 2 years replacement
guarantee.
10. Each Client can avail a maximum of one
Solar Loan at a time.
Sl.No Product
Partner
Model Number of
Customer
2016 2017
1 D.light S320 44,409 14,828
2 D.light M350 1,752 761
3 D.light S20 26,911
4 D.light S100 13,676
5 Greenlight
planet
Sunking
pro 2
15713 11,801
6 Barefoot Barefoot
go (with
stand)
924
Some of our Solar Initiatives at the branches :
Educating Borrowers of the usefulness of Solar Energy:
27
Statutory Reports &
Financials:
1. Directors’ Report
2. Independent Auditors’ Report and Balance Sheet.
28