SAMRUDHI MICROFINANCE

SOCIETY
Divya Boddu-007
Dhaval Parmar-025
Sachin Lakade-032
Raj Saxena-035
Shiraj Sherasia-039
Teena Deuri-043
Zahid Anwar-048
INTRODUCTION- A VERY SAD
SITUATION
 India is said to be the home of one third of the world’s poor. The World Bank
estimates that over 600 million people in India are below poverty line !!!
INTRODUCTION- THE BIRTH OF
SAMRUDHI

 To bridge this gap, SAMRUDHI set out its operations in

Gulbarga District, Karnataka , in the month of
May, 2007 by using a using a fast track model-drawn
upon the positive features of 'Grameen' methodology
'.

 SAMRUDHI is non profit organization registered under

the Karnataka Societies Registration Act, 1960.

Mr.Sanju Kumar, Founder & CEO

WHAT SAMRUDHI BELIEVES ?

SAMRUDHI believes that the “poor are

bankable”; they have “credit discipline”, and
they have potential to improve income and
productivity and can make profit. Access to
basic financial services can significantly
increase socio-economic opportunities for
poor families and in turn help improve their
standard of living"
Mission
“Our mission is to empower the poor and
underprivileged to become economically self-
reliant by providing cost effective and need
based financial services in a financially
sustainable manner”

Vision
“ SAMRUDHI's vision is to provide financial
services to 200,000 poor households in Indiaby
2013 and to become most preferred
developmental & livelihood service provider.”
CULTURE & CORE
VALUES
 Core values set the norms of behaviour for everybody
in the organization. The following Core Values are the
basis of competitive advantage, but not the reason for
just following them. Thus they need to be deeply held
beliefs and are meant to be expressed through day-to-
day behaviors of all.

 Professional (in management), Proactive (positive &

down to the business) & Prosperous (self-sustainable
flourishing organisation)

 Realistic (practical & down to earth), Receptive

(open for new ideas & innovations) & Responsible (for
what we do)
CONTD….
 Strategic (in every action), Simple
(uncomplicated operations) & Speedy action

 Transparent (in every action we perform),

Trustworthy (to all the stakeholders) &
Technology Savvy

 Cooperative (with all the stakeholders),

Competitive (in terms of products and
services) & Customer oriented (to achieve
satisfaction and delight)

 Innovative (in products and processes),

Instrumental (in implementation of objectives)
& Influential (in policies)
KEY OBJECTIVES
 To organize rural poor, Dalits, tribal women and
underprivileged groups for their development and
empowerment through community participation and
to create opportunities for socially disadvantaged,
distressed and economically poor to get livelihood
support.

 To offer cost-effective livelihood based financial

services to the rural and urban poor households.

 To become most preferred livelihood opportunity

provider in the operational area by establishing
SAMRUDHI Micro Fin Society as a highly professional &
suitable service organization.
GEOGRAPHICAL COVERAGE
 SAMRUDHI covers
eight district of
northern Karnataka
and expand into
other part of the
state and slowly
expand its
operation to the
part of AP and
Maharashtra & in
the first two year.

 SAMRUDHI has
initiated operations
through one branch
office in Gulbarga
town of Karnataka
ORGANIZATIONAL
STRUCTURE
ORGANIZATIONAL
STRUCTURE
Governance, Management and Financial
experience and operations
strategy

1 Well qualified and 1 Improvement in 1 Improvement in

experienced board the development of portfolio quality
more secure and
2 Innovative and flexible information 2 Productive
diversified products systems deployment of assets
and channels to suit in the loan portfolio
market needs 2 Good tracking
system for overdues 3 High yield to APR
3 Good strategic
change in terms of 3 Well developed
building the financial planning
organisational and control systems
structure
 GROWTH
 Samruddhi has had an interesting growth
pattern over the last three years.

 While the key indicators of scale – portfolio and

number of active clients – have shown
consistent growth, there has been a slight
decrease in the average loan size since the last
rating

 Growth in the portfolio can therefore be

attributed to an increasing number of clients
rather than an increase in the loan amounts
given to these clients.
STAFF PRODUCTIVITY
 By comparison, staff productivity in terms of
portfolio handled by the field staff, has
declined

 Due to a marked increase in the number of

CSAs recruited

 This increase in the number of CSAs was due

to new units being opened in Maharashtra
and AP.
 PORTFOLIO QUALITY
 There has been a marginal improvement in
the PAR ratio for Samruddhi

 Was mainly due to a rapid portfolio growth

 The subsequent improvement in the ratio by

about 0.5% is, therefore, a more realistic
indicator of delinquency management
WHAT SAMRUDHI DOES…
 SAMRUDHI uses the pioneering Grameen Bank
(Bangladesh) model to provide Micro-Loans , Micro-
Insurance to the poor.

 SAMRUDHI provides small & manageable loans to

the poor.

 Its main targets are rural & urban poor women

because they are the most marginalized and tend to
use resources more productively than men do.

 Women undertake small, manageable enterprises

rather than risky ventures that could bankrupt
families
OPERATIONAL METHODS
 SAMRUDHI adapted the pioneering Grameen
Bank (Bangladesh) approach to local
modification.
 It lends to five-member groups of women and
designates the group member the ultimate
guarantor of each of its members.
 If one member does not repay, no individual
in the group is eligible to receive another
loan.
 Default member’s loan has to be paid by
remaining members of the group.
CONTD….
 Social Collateral. The poorest do not have physical
assets that can be used as security. Instead,borrowers
organize themselves into groups that take collective
responsibility for repayment of one another's loans.

 Doorstep Banking. Providing financial services in

the villages enables the rural poor to collect thatday’s
wages and avoid the costs of travel to mainstream
banks. The illiterate poor are also unable to complete
loan applications, which often require several trips.
CUSTOMIZED PRODUCTS.
 SAMRUDHI designs loans with small, weekly
repayments corresponding to wage structures,
consumption and income generating loans to
prevent emergency “distress sales” and small
first loans to inculcate credit discipline and
collective responsibility. Interest and loan
repayments are made equal for easy
comprehension.

 Focus on Women. SAMRUDHI works exclusively

with women because they are the most
marginalized among the poor and because they
tend to invest the majority of their income into
the household and for their children. Women also
typically undertake small, manageable activities
CONTD….
Loan purposes

 − Farm loans
 − Non-farm loans
 − General purpose loans

Delivery channels

 − Direct to clients
 − Direct with Joint Liability Groups
 − Self-help groups
 − Through on-lenders
PRODUCTS AND SERVICES
IMPACT OF PRODUCTS AND
SERVICES TO THE POOR
INDUCTING MEMBERS IN THE
PROGRAM
CRITERIA TO JOIN THE GROUP
GROUP AND CENTRE STRUCTURE
PARTNER
Donor:-
Asha for Education:-
It is a non profit,volunteer-run Action group dedicated to
radical change in India by focusing on basic education ,in
belief that education is a critical requisite for socio-
economic change

Indians for Collective Action

It was founded in 1965 by Indian students
in Berkeley. Its objective is to support innovative ,
community-initiated development projects that empower
low income people in India.
 LENDER
Sharada MACS & Thrift Ltd.
Hyderabad based Sharada’s Women Association for
Weaker Sections (SWAWS) supported SAMRUDHI
through a Short-Term Loan of INR 0.7 millions
through Sharada Mutually Aided Cooperative
Society and Thrifts Ltd.

Initiatives for Development Foundation (IDF)

 Grassroot work for R&D
 IDF supported SAMRUDHI through

term loan of Rs.2.2 million .

ASSOCIATION
Mix Market:-
It is a global web-based MFI platform, which
provide information to various MFI network, public
& private fund that invest in microfinance.

Sa-Dhan:-
Sa-Dhan was designed and developed as that
platform to share, understand and learn the
different perspectives, competencies and
experiences, the source and legitimacy of the
microfinance in India.
TECHNOLOGY
 The heart of SAMRUDHI is in its Management
Information System (MIS) integrated with
accounts that enables the electronic capture
of all transaction such as, loan, repayment,
loan outstanding, credit history, trail
balances at field staff & management level.
KEY FEATURES OF SAMRUDHI'S
MIS
 Captures socio-economic information of a client
 Tracks loans and savings transactions at the field

 Generation of pre-computed and pre-calculated values

for expected transactions pertaining to a day
 Automated posting of vouchers into Accounts Module

 Configurable product, loan purpose, income and

poverty definitions
 Linkage to Performance Monitor

 Scalability – helps for rapid expansion

INFRASTRUCTURE

 Samruddhi has an adequate infrastructure

base of Rs 5.8 million as on 31 December
2009

 The fixed assets mostly include computers

and other such professional equipment and
some furniture and office equipment

 The utilisation of fixed assets is extremely

appropriate and efficient.
KEY FEATURES OF SAMRUDHI'S
ACCOUNTS MODULE
 
 Configurable Chart of Accounts
 Accounts can be defined at 3 levels

 Maintains day book, ledgers, cash book, bank

book etc
 Maintains financial statements like balance
sheet, income statement and trial balance
 Automated Year Closing and creates the
opening Trial Balance for the next financial
year
 Linkage to Performance Monitor

 
FINANCIAL PERFORMANCE
 Samruddhi’s credit performance is reasonable
with a cumulative repayment rate of 97.3%

 The PAR60 has also been improving, though not

adequately, over the previous ratings

 Samruddhi’s portfolio is reasonably well

diversified with about 48% of loans disbursed
during the year for a variety of non-farm
activities, 22% for cropping, another 22% in
animal husbandry and agri-allied and a small 8%
for housing and general purpose
MOBILISATION OF FUNDS
 Samruddhi has diversified its lender base

 Cash security, still continues to form an

important source of funds and has increased
to 8.9% of total liabilities and equity

 This could be due to an approximate 40%

increase in portfolio as well as the
introduction of a cash security component
across products
ASSET, LIABILITY AND EQUITY
COMPOSITION
 Samruddhi has utilised its assets well with
72% being deployed in loans and about 10%
in short term investments

 These investments have been made from the

unutilised equity funds and the focus is on
instruments that have minimum risk followed
by those which give good returns

 Due to their efficient investment policy, the

organisation has a low cash balance of
around 2%.
CONCLUSIONS
Organizational
Strengths Weaknesses

•Well qualified and Low depth of coverage in

experienced Board existing villages
• Innovative and diversified
products and channels to suit
market needs
• Good strategic change in
terms of building the
organisational structure
•
MANAGERIAL
Strengths Weaknesses

•Professionally trained and •Relatively relaxed system for

stable managerial cadre the appraisal of loan to SHG
• Improvement in the federations
development of more secure •The graduation of senior FXs to
and flexible information UHs has left the FX levels to
systems relatively new staff
• Good tracking system for
overdues
• Well developed financial
planning and control systems
FINANCIAL
Strengths Weaknesses

•Improvement in portfolio •Moderate portfolio quality and

quality continues to be weak in the
•Productive deployment of older areas
assets in the loan portfolio • Low ROA
• High yield to APR •
• Good equity mobilisation and
capital adequacy
•
SUCCESS STORIES
Name:-Devaki.
 Took loan from
SAMRUDHI to invest
in her vegetable
business.
 Now she earn 150-
200 every day
SUCCESS STORIES
 Name:- Shainaz Begum
 Availed Rs. 5000/- loan to
invest in seasonable
businesses, such as
mango, banana & grape
sales.
SUCCESS STORIES
 Name:-Gundamma
 Availed loan from
Samrudhi
 Earn 100-150 every
week
Thank You