towards a lifetime of progress -...
TRANSCRIPT
An
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Towards... A Lifetime of Progress
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Registered office
4-368/1, C. B. Road, Greamspet,
Chittoor, Andhra Pradesh-517002
Corporate office
#17/1, GRA Tower, Ambalipura Main Road,
Agara Post, Bangalore, Karnataka--560103
About FFSL Business History Board Products & Services Footprint 1 2 3 4 5
Chairman’s Message 5
View to the Future 21
Operational Highlights
Finance Operations Risk People Technology
12-17 6 7 8 9 11
18-19
10
6–11
Inclusive Development
Stakeholder Engagement
12
13
Pages
Page
Pages
Pages
Page
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5
Dear Stakeholders,
It is my great pleasure to welcome you to the
18th Annual General Meeting of your company.
Year 2013-14 has been an exhilarating one
for us- Fast paced, high growth and immensely satisfying.
With a focused business plan to double our business volumes,
we expanded to new geographies, launched new products,
undertook fresh initiatives, executed key hires in leadership roles
and set the course for a scalable and sustainable growth journey.
Your company registered a profit of over Rs. 8 Cr this fiscal and has built up a portfolio of
Rs. 219 Cr at the closing, with firm strides taken to increase disbursement volumes. We had a
breakthrough year in terms of funding as well, with fresh funding starting in full swing post our
CDR exit. I firmly believe, these are signs, that we are at the threshold of a tremendous growth
phase in our business.
Our industry has been predicted to continue its high growth path in FY’15. Regulations have
firmed up to a considerable extent. Funding to the industry is on a high with greater credibility
placed on the MFI borrowers due to the high repayment rates With the advent of these sector
realities in terms of regulations and funding availability, adding greater relevance to our product
offering has been a key driving strategy for our business this financial year. To this end, we have
launched segmented products aimed at addressing the larger lifecycle requirements of the BOP
households, providing financial support right from group based loans, to individual business loans,
to personal credit linked insurance, to retirement solutions. I’m confident that we are
contributing positively to enable a lifetime of progress for our customers through our products
and services.
FY’14 also saw us striving to provide our customers with the highest levels of service in
microfinance sector through technological innovations which have a direct impact; initiatives such
as mobile-based real-time loan management and process enhancements, reducing the lead time
for disbursements. This has significantly upped our cost efficiency leading to improved profit
margins. With strong financial capital and good opportunities for scale-up in all our business
verticals, we are well-positioned for growth at the close of FY’14. Thanks to committed
employees, experienced management, high level of technology and proven expertise in the
industry, we have affirmed our strong position as a company to look forward to in the MF space.
Let me present this report to you as a brief summary of our business this
fiscal. I’m also taking this opportunity to acknowledge the efforts of all
FFSL employees, the commitment of all its stakeholders and the
support of the regulator, bankers, funding institutions and other
partners in making this year a great one for us.
Chairman’s Message
Mr. G Dasaratha Reddy Chairman and Managing Director Future Financial Servicess Limited
6
Future Financial Servicess Limited (FFSL) is an NBFC-MFI registered with the
Reserve Bank of India (Registration Number: B 09.00311). FFSL caters to the
base-of-pyramid sector of customers through affordable financial services in the states of
Karnataka, Tamil Nadu, Andhra Pradesh and has also recently extended its operations to
the state of Gujarat in West India.
Entering active microfinance operations in the year 2007, FFSL has a
strong foundation in inclusive development sector.
Mr. Dasaratha Reddy, the promoter of the company, has been a
driving force in inclusive finance and community development
activities in Andhra Pradesh for over 29 years providing FFSL
with the right experience and customer connect.
Mr. Reddy, a fully committed and active promoter, and a pioneering stalwart in
developmental sector in India has a proven acumen in building successful social
enterprises. He has been instrumental in building the
business from a single state operation in AP to a
multistate one with presence in AP, TN and KA in it’s
initial 3 years of existence.
In October 2010, FFSL brought in an equity partner,
India Value Fund (IVF), to fuel its phenomenal growth.
The fund, managed by India Value Fund Advisors,
undertook the role of an involved business partner and
has been a key contributor to the growth of FFSL from then onwards. IVFA brought in
standardization of processes and operations across functions and geographies and
instituted best-in-class business practices, vastly aiding in the sustainability of the business
and scaling up of operations. IVFA manages its business interests in the base-of-pyramid
Financial Services sector through India Finserve Advisors Pvt Ltd (IFAPL), a central
management company (CMC), which adds management capital to the core business
functions in FFSL. Through IFAPL, FFSL has access to
one of the best management capital in
microfinance industry in India in the functions of
Finance & Treasury, Operations, Risk
Management, Information Technology and
People Operations.
Our business strategy is to build a
socially relevant and
commercially attractive entity at
the base of pyramid
by adopting
best-in-class practices.
Our goal is to build the
‘most admired company’ in
Base of Pyramid Financial
Services (BOP-FS) sector through
innovation and excellence in
processes, business practices,
technology,
people practices and
thought leadership.
FFSL has 7 years of
Focused Business
Expertise in
Microfinance.
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FFSL, adhering to its mission to provide affordable financial services to low income
households that are client focused and which enhance their well being , has evolved over
the years to adapt to the needs of its customers and the demands of a highly regulated
industry.
Traditionally into unsecured joint liability based group (JLG) loans for income generation,
FFSL, in recent past, has ventured into multiple product lines catering to the larger life
cycle needs of its customers with a clear objective of partnering in their journey of
progress. As on March 31st 2014, FFSL offers JLG based microloans, secured micro
enterprise loans, credit linked insurance and retirement solutions (through government of
India Pension product NPS-Lite) to its customers.
Thriving in a highly regulated industry, FFSL has leveraged
its high caliber management capital and focused business
acumen to build a highly efficient, transparent and
sustainable business entity that is maximizing value for
all its key internal and external stakeholders. Our
focused and data driven operational capabilities help us
maintain a highly scalable, sustainable and profitable BOP-FS business. Our people
practices help us build a high performance organization. Our streamlined, process driven
and centralized risk management ensures industry best portfolio quality. Our technological
innovations in operations and processes give us an edge over our competitors through
fantastic cost and control efficiencies. Our pioneering approach to all facets of BOP-FS
business and our active engagement with key partners of the industry makes us a thought
leader in the sector. These key business attributes of FFSL is validated by the various
industry accolades received by the company and its membership in some of the highly
respected industry associations.
As of 31st March,2014
FFSL operates through 102 branches
spread across 5610 villages in KA, TN, AP
and recently in GJ. Our financial products
provide financial independence and
economic security to over 1.9 lakh
base-of-pyramid households
at the close of FY’14.
FFSL also pursues an active community welfare agenda through dedicated activities, the
main focus areas being economic, social and environmental well being of the communities
where it operates.
Profile
About FFSL
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Start of Mr. Reddy’s journey in inclusive development with the launch of an NGO ‘Action for Community Services’ (ACTS) established for developmental activities in AP. The NGO undertakes watershed management activities in the local community.
1985
2007
1995
Desirous of extending the financial inclusion services to wider geographies, FFSL, an already existing NBFC -MFI, is acquired to further the microfinance activities to the neighboring states of Karnataka and Tamil Nadu.
First foray into inclusive finance and economic empowerment of women. Acts Mahila Mutually Aided Cooperative Thrift Society (AMMACTS) established to offer inclusive financial services to the BOP families in AP. This would become the root organization for FFSL.
2010
FFSL grows into a 245 Crs portfolio company with 85 branches in South India. To meet its capital requirements for further expansion, FFSL partners with India Value Fund (IVF), India’s first private equity fund with $ 1.3 billion in assets under management. IVFA undertakes the role of Business Partner and sets up India Finserve Advisors Pvt Ltd (IFAPL) as an advisory and management team. With the right management capital and focused business acumen FFSL sets forth on a phenomenal growth path.
In it’s 7 years of existence, your company has disbursed loans of over 1300 Cr for income generation activities
Striving to achieve its mission “to service low-income families, providing them access to financial services that are client focused, designed to enhance their well-being and delivered in a manner that is ethical, transparent, and cost effective”, FFSL has actively aided in the economic and social progress of this section of the society through it’s financial and social services.
2014
2013
-
2011
Building the ‘most admired company‘ in base of pyramid financial services sector
FFSL, at the close of FY’14, supports over 1.9 lakh customers through 102 branches with a product portfolio consisting of the flagship product, viz. JLG loans, along with secured microenterprise loans, credit linked insurance and retirement solutions through NPS -lite, with an employee strength of 478.
Period marked by build up of scale and sustainability, adoption of Industry best business practices, technology and process innovations, product line expansion and industry thought leadership position. At the close of FY’13, FFSL with an employee strength of 379 builds up a portfolio of Rs. 191 Cr, supporting over 1.25 lakh households in their journey to a lifetime of progress.
History
About FFSL
9
Ms. Susan Thomas, Independent Director
Ms. Susan Thomas is an Independent Director on the Board of Directors of FFSL since 2010 . She is a faculty at the Indira Gandhi Institute for Development Research, Mumbai & specializes in financial econometrics and aspects of market microstructure. Ms. Thomas serves on the Board of Directors at Benchmark Asset Management Company, Fame Cinemas, SBI Pension Fund Management Company, the Executive Committee for Futures and Options at the National Securities Clearing Corporation, India and the Expert Committee for the Government's program on hedging wheat imports. Ms. Thomas holds degrees in Civil Engineering and Economics from IIT, Mumbai and University of Southern California, Los Angeles, respectively.
Board
About FFSL
Mr. Mahesh Krishnamurthy, Director
Mr. Mahesh Krishnamurthy represents India Value Fund on the Board of Directors of FFSL since 2010. He is involved with investments in the logistics, IT/ITES, microfinance services and other sectors. His work experience includes 18 years in diverse industries in the US. Most recently, he developed the turnaround strategy and led an acquisition as the head of corporate development at Accelrys, a NASDAQ listed drug discovery software company. Prior to that, he was a General Partner at Idanta Partners, a San Diego based venture capital fund and at KT Venture Group, a corporate venture capital fund. His early years saw him working for McKinsey, AT&T and Honeywell. Mr. Krishnamurthy has a Bachelor's degree from IIT, a Master's from University of Wisconsin and a Master's degree in Business Administration from Stanford University.
G Dasaratha Reddy Managing Director
Mr. Dasaratha Reddy is a stalwart
in developmental field with over
29 years experience involved in
uplifting the rural poor and base of
pyramid families through various organizations like
Action for Community Services (ACTS, Est. 1985) and
Acts Mahila Mutually Aided Cooperative Thrift
Society (AMMACTS, Est. 1995). His activities through
ACTS were essentially welfare programs and
watershed management initiatives. AMMACTS,
registered under the APMACS act 1995 started
Microfinance activities aimed at empowering rural
women in V Kota Area of AP and then expanded to
other areas in Chittoor district. In March 2007 FFSL,
an already existing NBFC was acquired by
Mr. Dasaratha Reddy to expand his micro lending
activities outside Chittoor. The company, under his
leadership, has flourished and expanded its
operations through multiple states offering diverse
financial products to BOP sector.
Mr. Reddy holds a masters degree in Economics.
Mr. George Thomas* Independent Director
Mr. George Thomas is an Independent Director on the Board of Directors of Future Financial Services since 2012. Between 2002 and September 2011, he was a Partner at India Value Fund Advisors. Prior to this, Mr. George Thomas led BPL Soft Energy Limited since 2000, and Warner Lambert India since 1998. Mr. George Thomas started his career at HLL in 1982, where he spent 16 years in various capacities at its affiliates in India and the United Kingdom.
Mr. Thomas is a post-graduate in History from St. Stephen’s College, University of Delhi.
*Mr George Thomas is the Founder and Managing Director at CapAleph Advisors and the Investment Officer managing investments in companies that are engaged in Emerging Consumption Trends. During the financial year, Mr. Thomas exited from the board of directors of FFSL, to pursue opportunities in MicroHousing segment, a cause which he strongly espouses.
Mr. Pramod Kabra , Director
Mr. Pramod Kabra represents India Value Fund on the Board of Directors of FFSL since 2012. Mr. Kabra is closely involved in supporting and building IVFA companies in cable & ISP services, Logistics, Microfinance and Radio taxi services. Mr. Kabra has spent 23 years with Unilever. He has wide ranging global experience in strategy, finance, M&A, supply chain and innovations. He has held various leadership positions in Unilever including that of head of treasury for Asia and Africa region and Board member of Global Home Care Category Team. His strength lies in leading senior multicultural and multifunctional teams and managing talent Mr. Pramod Kabra holds a Bachelor’s degree in Commerce and is a qualified Chartered Accountant.
Mr. Satish Karambelkar, Nominee Director (SIDBI) Mr. Satish Karambelkar is a nominee director representing SIDBI in the board of FFSL since 2013. Mr. Karambelkar has over 30 years of experience in the banking field with stints in Industrial Development bank of India and Small Industries Development Bank of India. Mr. Satish is a graduate in science and is a Certified Associate of Indian Institute of Bankers.
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Credit Linked Insurance
Micro Enterprise Loans
Retirement Solutions
Micro Group Loans
An essential support during micro entrepreneurship is dependable risk coverage in case of unforeseen circumstances; natural or man made. FFSL offers this support to its borrowers during their loan lifecycle through premium based insurance coverage. The insurance cover, for the borrower and the co-borrower, activated through a one time premium payment by the member at the time of disbursement, covers him/her through the duration of the loan.
This insurance cover protects the member and family from the burden of loan in case of any unforeseen emergencies like death or natural disasters during the tenure of the loan.
In the next phase of borrower lifecycle as a micro entrepreneur with a stable credit history and repayment capabilities, a BOP segment borrower can benefit from Micro enterprise loans (MEL) from FFSL.
Micro Enterprise loans are business loans for capital needs with ticket size upto Rs. 5,00,000 with a monthly repayment schedule. Added risk mitigation for this loan product is through a collateral.
As on 31st March 2014, FFSL supports 59 micro entrepreneurs through this loan product.
For most of our borrowers who work in the unorganized sector, saving for old age is a luxury which many do not plan for or is not affordable. FFSL offers retirement solutions through NPS-Lite, a self contributory pension product from the Government of India. NPS-Lite addresses these issues with nominal contributions from members augmented by an equal contribution from the government to their pension fund.
FFSL aims to bring this product within the reach of all its borrowers through its distribution network, affording better financial security during old age.
As on 31st March 2014, 34361 base of pyramid households have been secured through this product by FFSL.
Addressing the Lifecycle Needs
of the Base Of Pyramid Sector
The flagship product of FFSL, micro group loans, provide affordable credit to borrowers in the BOP sector. This loan product aimed at the borrowers in the first phase of a borrower lifecycle utilizes joint liability based group lending model to finance any income generating activity. Loan amounts range from Rs. 10,000 to Rs. 35,000 with flexible repayment tenure. Group trainings are organized to educate the members, usually first time micro entrepreneurs, on efficient use of capital and for building group cohesion.
As on 31st march 2014, FFSL supports over 1.9 lakh BOP households through this loan product.
About FFSL
Products & Services
Microfinance loans
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Microfinance & MEL locations
MEL-only locations
Microfinance-only locations
(Data as on 31-03-2014)
About FFSL
Footprint
38 Locations
102 Branches 191158 Active clients
35284 Loan groups
GUJARAT
KARNATAKA
TAMIL NADU
ANDHRA PRADESH
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Increase in fresh funding by
244% in FY’14
Diversification
of funding sources
Term Loans Bilateral Securitisation
Multi Originator Securitisation Debentures
Multiple funding partnerships with banks and
financial institutions
T H R O U G H
Terms loans & securitization deals
of
162.78 Cr
NCDs of
10 Cr
Funding
partnerships
15
42.47
44.03
FY'13
FY'14
Income Growth
At the close of business on 31st March 2014, your company has registered a profit of Rs. 8.29 Cr exclusive of taxes through
financial services for the Base Of Pyramid including fee income to the tune of Rs. 2.03 Cr through multiple verticals.
Your company has written off Rs. 4.68 Cr from the 100% provision of 24.17 Cr provided last year for the AP impacted portfolio.
Your company is currently exploring re-entry into active operations in the state of AP. This financial year saw the company
making significant progress in one of the most challenging areas of base of pyramid business sector viz. funding. The company
raised fresh funding of Rs.172 Cr this year through diversified sources, a rise of over 244% compared to last year. Our
on-balance sheet borrowing outstanding, at the close of FY’14 stands
at Rs.135 Cr.
Many of the new initiatives introduced last year have shown significant
contribution to our business performance this year. Specific mention on new
business verticals; the collateralized business loan (MEL) and retirement
solutions (NPS-Lite) which added to our income to the tune of 3.12 Cr;
along with process oriented initiatives such as Standard Operating
Procedures implementation across geographies & functions and m-FIMO
mobile tool for sales force automation contributing to our bottom line
through cost efficiencies.
Highlights
Finance & Treasury
105
135
FY'13
FY'14
Borrowing O/S
90
172
FY'13
FY'14
Funding growthBorrowing O/s (Rs. Cr) Funding growth (Rs. Cr)
42.47 44.03
FY'13 FY'14
Income growth (Rs. Cr)
-115055895
8185620
FY-13 FY'14
PBT growth (Rs.)
13
NBFC-MFI certification: During the year, the Reserve Bank Of India classified FFSL as an NBFC-MFI clearly validating our efforts to build a sustainable, transparent and compliant microfinance institution for BOP sector. With this, FFSL has changed its status from NBFC-ND-SI to NBFC-MFI w.e.f 6-12-2013, reiterating its commitment to provide quality microfinance services to the BOP sector.
M2+ grading by ICRA: During the year, we were awarded M2+ grading by ICRA validating that FFSL’s ability to manage its microfinance activities in a sustainable manner is high. ICRA lists “strong investor profile and management capital, professional promoter group, prudent credit policies, strong MIS, good internal control and loan appraisal with adequate monitoring and collection mechanism along with the profitability registered by the company” as the key elements in its grading rationale.
Expansion of operating geographies: FFSL is considered one of the pioneering microfinance institutions in South India with a legacy of 29 years of successful operations in developmental sector in the south, predominantly in the state of AP and subsequently in Tamil Nadu and Karnataka. In FY’14, your company took the next step in its evolution and started operations in West India, with the launch of Micro Enterprise Loans on 7th Oct, 2013 in Mehsana and Himmatnagar in Gujarat. Carrying forward its DNA of deep connect with customers, your company, has disbursed over Rs.30 lacs in this new geography as on March 31st, 2014.
Project Shakthi: FFSL, by the very nature of its business, reaches out to the disadvantaged section of women in the society, empowering them against financial exclusion and dependence. Carrying this credo further, in Q4-FY’14, we launched Project Shakthi. Dedicated branches for microfinance loans were set-up with exclusively account based disbursals. The primary objective was to bring in savings culture in women with the sanctioned loan amount being directly credited to the account of the member. The first of these branches opened on March 26th, 2014 in Malavalli in Karnataka and more locations are in pipeline .Another key feature of this project is the centre meeting agenda, which is predominantly non-financial with emphasis on training in health and hygiene, environment protection and other community development agenda..
Other than these initiatives, our branch operations saw many new practices and processes inducted to add value to our employees and customers alike. A new visual tool, using flipcharts, was introduced for Customer training, vastly improving the delivery and comprehensiveness of the pre disbursement training for borrowers. New processes were introduced for tracking disbursements and for added documentation through mandatory photo capture and upload to loan management system (CAMS) during disbursements and maintenance of group file at the center locations.
Highlights
Operations
30580
35284
FY'13
FY'14
158377 191158
FY'13 FY'14
Borrower Groups (closing) Active clients (closing)
191 219
FY'13 FY'14
86
102
FY'13
FY'14
Portfolio O/S(Rs. Cr) Branch network
38 Regional offices
342 Field level employees
99.9% Collection Efficiency
176 Cr Disbursed in
FY’14
Plan 2X: Encouraged by the possibility of increased financial flexibility and scaled up funding, your company, in the second half of this financial year, formulated a plan to double the monthly disbursement capacity (2X) by Q1 FY-15. This initiative was expected to give a significant push to our AUM numbers and profitability. The initiative, named Plan 2X, called for scale up in terms of operating locations, infrastructure and staff strength in anticipation of increased business numbers and the project is under execution mode across the company. Geographical expansion has already been initiated and hiring the field force in right numbers is on. This is another hallmark of the strides our business is taking.
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As on March’14
320
158
Field Non Field
429
49
Male Female
High Performance
culture
4000+ training
man-days
Active people
engagement
GPTW score of 77
50+ Star
employees in FY’14
FFSL, with its commitment to become an admired financial services and distribution company serving clients at the base of the
pyramid, places key importance to active engagement and effective development of its human capital. We believe that the key
to customer satisfaction is a satisfied and committed employee. With a culture based on openness and meritocracy your
company has strived to improve and develop its human capital through various well appreciated initiatives this year.
Training and on-boarding:
An employee with the right tools and right attitude is an asset to any company looking to scale up and build a high
performance organization. With this goal in mind, FFSL regularly organizes functional and soft skill training programs for its
employees. In FY’14 the focus areas have been regular induction and on-boarding of the field force, SOP, e-FIMO and m-FIMO
and managerial skills. Over 4000 man-days of training covering 100% of supervisory and frontline employees were conducted
during the year. In addition, the company introduced e-based training modules through the in-house web portal ‘i-grow’, an
initiative aimed to inculcate self-initiated training and development in employees.
Employee Engagement:
In FY’14 FFSL furthered its employee engagement initiatives such as birthday and festival celebrations, Fun Fridays, employee
satisfaction surveys, employee meets, FFSL Future Cup cricket tournament etc which have positively impacted employee
satisfaction and led to greater cohesion in the team. An employee engagement day is conducted twice a month in every RO
with specific focus on field force morale, enabling better and regular connect with field employees for feedback and grievance
redressal. The company also organized an off-site outdoor program for its middle management team with activities for team
bonding and engagement.
R & R programs:
Your company launched Star Awards as a reward and recognition initiative to recognize outstanding work performance and
potential of our employees. Based on their functional role and hierarchy employees are given the title of Star Employee, Star
Manager and Star Leader. Over 50 employees were awarded in this financial year based on their work performance and
potential. In addition, various incentivized contests for field level employees generated much excitement and drive at the
front-end to improve business quality and volumes.
People Culture:
In an effort to benchmark its people culture, your company enrolled for Great Place To Work certification
survey this year garnering much needed insights into the aspirations and expectations of
our resources. Your company, commendably on its first attempt itself, has received
a score of 77, indicating that 77% of our workforce is satisfied with the work
culture and feels that the company is a great work place. The survey has enabled
us to review and revamp our Employee Value Proposition( EVP), both financial
and non-financial and further standardize our people practices. The company
shall continue to work towards benchmarking of its practices through this
survey.
Highlights
People
15
429
49
Male Female
Efficient risk mitigation and high process control is a mandatory requirement in the microfinance business where the loans are
collateral free and unsecured. The centralised Credit Back Office (CBO) of FFSL underwrites large number of small loans
sourced across its operating geographies and ensures error-free credit screening and compliant business processes.
In FY’13 the risk function of FFSL underwent significant process revamps resulting in improved portfolio quality and time
management. Significant among these changes was the introduction of end-to-end standardized operating procedures and
centralization of risk/credit/process/documentation functions through two centralized credit back offices. Centralization of
underwriting and documentation has helped the company in significantly reducing the per-application transaction cost and
achieving higher scalability through increased operational efficiency and faster transaction speeds. With the help of high end
technology applications, a centralized process ensures improvement in data assimilation, analysis and controls. On the
qualitative front, the centralized underwriting has also helped in unbiased and SOP driven underwriting.
In FY’14 our risk management maintained its high degree of control on portfolio quality and risk mitigation through efficient
and disciplined process adherence and centralized underwriting. We processed 118251 fresh loan applications this year with a
productivity average of 1713 applications per month per officer while maintaining a portfolio quality of 99.9% in all verticals.
The centralization of documentation and underwriting has positively impacted the productivity at field level too with the field
teams able to devote greater time and energy to the sourcing and servicing the customers.
Your company follows a risk based audit approach where the internal audit department along with the
risk management department identifies and monitors the most important operational risks of the company and periodically
reports on the internal control framework to the Management, Audit Committee and Board of Directors. In addition to
ongoing Internal audit with a quarterly reporting schedule, your company is subject to the annual statutory audit, tax audit
and financial audit which monitors its degree of compliance and risk mitigation.
With these measures, your company, continued its high rating on
innovative underwriting processes and robust compliance across the sector, in
FY’14 as well.
Highlights
Risk & Audit
7349 7159
3046
6857
4141
8360
12748
9204
11714
14882 15151
17640
Total applications processed (month on month)
100% technology
enabled
Centralized Loan application
assessment and
Centralized Documentation
16
FFSL prides itself on a state of the art IT-infrastructure which helps us in managing our operations in an efficient and cost
effective manner.
Loan Management:
In FY’14, with introduction of new product verticals your company remodeled its IT ecosystem to seamlessly integrate the new
verticals into the loan management system adding scale and process efficiencies.
Your company manages its loan process through 3 distinct technology systems during each phase of loan sourcing and
origination, processing and post-disbursal.
CAMS– Loan origination and documentation system for automation of loan processing & credit check to approval phase.
Financial Accounting & Management Information System(e-FIMO)- Web based technology solution for process and
operations management adding to the operational efficiencies and improving our bottom-line.
Mobile based field force automation system (m-FIMO)- In FY’13 the company initiated and completed 100% field force
automation by integrating m-FIMO, a mobile phone based field force automation system into its business automation
platform, completing the fully integrated work flow automation process at the company. The primary objective for this
initiative was to remove manual accounting for payments and make the process more efficient and error-free. Loan
transactions are now automated through an mFIMO-enabled mobile phone integrated with a bluetooth printer used for
generating and issuing instant loan repayment receipts to the customer. In addition to this, details of center and group
meeting start time & end time, member attendance, exceptional transactions like advance, OD collections, pre-payments
etc. are also captured using this device. We now pride ourselves on a fully integrated technology platform enhancing our
operations and processes enabling greater control on the sales, collections and credit processes.
During FY’14 your company saw m-FIMO emerge as one of the main efficiency-enabler in the field process and as the main
differentiator for your company vis-à-vis other microfinance players.
Oracle Business Intelligence Tool:
In addition to the core loan management systems, your company also uses a business intelligence tool for data
mining and informed decision making. The BI-tool helps mine data, converts raw data to useful information and is set to
become a strong catalyst in helping capture new market and new product opportunities, which the organization is aspiring for.
Cloud Server:
In FY’14, your company moved its data from on-ground hard drive based server to
cloud-based highly secure Data Center. This was another IT initiative which
showcased our state-of-the-art tech platform this FY. The cloud server with
industry grade fire-wall protection with added anti-phishing & spy features
and on-site and off-site backup is a dynamic and highly scalable infrastructure
which is highly accessible and provides significant cost efficiencies to the
company.
Mobile based field force
automation through
m-FIMO
Web based Loan process
automation through
e-FIMO
Cloud based
data server
Automated loan origination &
documentation through CAMS
Highlights
Technology
17
Your company considers stakeholder engagement as a vital area of strategic importance and as such engages in continuous and transparent dialogue with key stakeholders through integrated communication initiatives. In FY’14 FFSL furthered its stakeholder engagement through constructive communications addressing stakeholder needs and also the company’s outreach requirements.
Highlights
Stakeholder Engagement
Internal and External communication: Your company maintains regular dialogue with its external stakeholders, esp. funders and industry associations, with yearly, quarterly and monthly business update newsletters capturing business highlights and periodic information and outlining the advantages and achievements of the company. In addition to this, messaging based on our social impact and the key role played in financial inclusion is achieved through a greetings campaign to external stakeholders on all national holidays like Independence Day, Republic Day etc. In FY’14, multiple newsletters and greeting messages were sent to the target audience with this intent. The company also maintains steady communication with its employees through organizational mailers, product and process communications etc building connect between geographically separated locations leading to a sense of cohesion and awareness parity. This year your company also released a comprehensive annual report for FY’13, recording the year’s business performance and detailing the various initiatives of the company aimed at select end users, which has worked as an effective marketing tool for the company
Your company has been consistently engaging it’s stakeholders through regular and effective messaging, consistent and clear positioning and efficient message delivery throughout FY’14 and has been able to generate visibility and greater brand name recall for the company.
Brand and Product Communication: Your company, with an effective fair practice code and code of conduct governing its operations, prides itself on communicating transparently with its business stakeholders with multiple product and process communications released throughout the year. A key initiative in FY’14 was the release of a visual tool for customer education, in three vernacular languages of Telugu, Kannada and Tamil, to be used in CGT/GRT, explaining the loan process end-to-end. This tool has helped in streamlining and standardizing training delivery across locations and has achieved significant success in message permeation and concept clarity among employees and borrowers both.
Thought Leadership: Your company has adopted thought leadership as one of its key operating pillars. As such your company is actively involved in industry forums like MFIN and has been consistently contributing to the cumulative thought platform of the industry. Every year your company, in association with IFAPL, organizes a BOP conclave which is one of the well-attended events of the industry. The 3rd edition of the conclave was conducted on 5th March, 2014 and was attended by CXO level representatives from regulator, Bankers, rating agencies, Industry practitioners etc and proved to be a holistic platform for discussion on microfinance.
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Your company is incorporated as a ‘for profit’ microfinance institution with the objective of bringing affordable financial services within the reach of the base of pyramid households in India. Following the credo of a commercially viable business with a social DNA, your company conducts its business by balancing the interests of its stakeholders including investors, funders, employees on one side and financially excluded households on the other. We firmly believe that our business has a wider purpose than profit viz. one of social and economic up-liftment of the financially excluded masses that it serves. As part of our social focus we devote our efforts on areas directly related to our client welfare philosophy - promoting livelihood development and community welfare activities leading to improvement in the quality of life of our customers. In FY’14 FFSL directly benefitted over 18,630 households through developmental activities aimed at community welfare in the areas that we operate in. Your company’s social impact was felt in 5885 villages in India through financial literacy and advisory camps, livelihood skills training camps, sanitation camps, pest control activities, safe water campaigns, greening activities, health and hygiene camps, livestock protection and immunization camps, education initiatives etc.
Inclusive Development
O u r C l i e n t W e l fa r e P h i lo s o p h y Reach out to target customers through livelihood development and community welfare activities to achieve Social Performance goals
Health Camps
Ophthalmology camps
Distribution of medicines/first aid kits
Veterinary camps
Free inoculations
Livestock maintenance education
Village cleaning
Tree plantation and sapling distribution
Chlorination
Water Tank cleaning
Water Taps maintenance
Pest control activities
Mosquito repellant distribution
Educational Video Shows
Chart Demos
Livelihood Training
CSR Focus Areas
Health and hygiene
Nutrition awareness
Water safety
Veterinary care
Greening initiatives
Environment protection
Financial literacy
Education campaigns
Client Welfare focus areas
Health & Hygiene Nutrition awareness
Water Safety Veterinary Care
Greening Initiatives Environment protection
Financial literacy Livelihood training
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FFSL, with its focused commitment to
efficiency in business operations and social
impact in the sector, is looking forward to
high growth FY’15 ensuring sustainability,
profitability and competitiveness in
operations.
The opening up of multiple funding channels
is a great opportunity for your company to
benefit more BOP households through
effective channelization of funds as affordable
credit to our borrower base. Your company
proposes to lay primary focus on this
opportunity to scale up business volumes
while maintaining its core philosophy of
operational excellence and social impact. Our
secured loan vertical has supported over 59
micro enterprises to meet their business capital
requirement in FY’14. Your company sees this
product as an opportunity to uplift more micro
enterprises into financial self sufficiency and
intends to explore substantial scale-up of this
vertical.
Focus Areas– FY’15
Maintaining quality portfolio
Strengthen and further innovate in all
aspects of business
Impacting the social bottom line
with dedicated social agenda
Continued Focus On:
Key Focus Areas
Increase business volumes while
maintaining operational excellence
Scale up of new product verticals
Actively explore non-credit product
needs of BOP sector
With its close connect to the BOP segment, your company has, over the years, recognized
the need of this target segment for non-financial products that directly impact their social
well-being. In FY’14 your company will actively explore this need of the borrower base and
endeavor to fill this need-gap with a viable product offering that will contribute
to their social welfare in a meaningful way.
Your company, over the years, has built best-in-class systems in operations, risk mitigation,
technology and human resources leading to a robust infrastructure and operational
acumen ideal for pursuing further growth. Your company
intends to build on this foundation of excellence and
further innovate in all aspects of functioning and
continue its journey of thought leadership and
measurable impact in society generating value for all
its stakeholders.
View to the Future
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Rooted in 29 years of Developmental Work