earnings update q4fy17 - bfil.co.in up… · earnings update q4fy17 bharat financial inclusion...

EARNINGS UPDATE Q4FY17

BHARAT FINANCIAL INCLUSION LIMITED(Formerly known as ‘SKS Microfinance Limited’)BSE: 533228 ● NSE: BHARATFIN

Corporate Identity No. L65999MH2003PLC250504

www.bfil.co.in

This presentation is solely for viewing. No part of it may be circulated, quoted, or reproduced for distribution without prior written approval from BHARAT Financial Inclusion Limited.

MAY 2017

CONTENTS

Particulars Slide No.

Executive Summary 3

Investment Hypothesis 5

Company Overview 8

Clarity on Major Uncertainties Post AP MFI Crisis 13

Growth Anatomy 18

Future Strategy 27

Pilot on Retail Distribution And Service Points (RDSP) 33

Update on Cashless and E-KYC 37

Loans for Housing Improvement & Two-Wheeler (Pilot) 41

Q4FY17 Performance Highlights 45

Update On Demonetisation 51

Review of Financials 60

Financial Architecture 71

Risk Management 76

Capital Structure 78

Annexures 81

Figures rounded off to the nearest digit across the presentation. Figures and ratios have been regrouped wherever necessary.

2

EXECUTIVE SUMMARY

3

4

136

244

377

641

848

184 178

FY13 FY14 FY15 FY16 FY17 Q4FY16Q4FY17

2,016 2,837

4,171

7,677 9,150

Mar-13 Mar-14 Mar-15 Mar-16 Mar-17

Overview AUM Growth (Non-AP portfolio) Growing Net Interest Income

Attractive Financial Metrics Balanced Geographical mix Diversified Shareholding

Marginal cost of borrowing# 8.8%

Cost to income 50.0%

Return on Equity^ 13.6%

Return on Asset*^ 2.7%

EXECUTIVE SUMMARY

• Second largest microfinance company

in India with gross loan portfolio of INR

9,150 Cr., 67 Lakhs members in Non-

AP states and 1,399 branches

• Lowest lending rate (19.75%) among

NBFC-MFIs

• Company’s non-AP Portfolio grew by

19% (YoY) to INR 9,150 Crs. as of Mar

31, 2017

• Profit for FY17 of Rs. 290^ Crs

Note: Shareholding as of Mar 31, 2017

Net worth (INR Cr.) 2,447

Capital Adequacy 33.5%

Cash & Cash equivalent

(INR Cr.)

2,505

Note: Portfolio as of Mar 31, 2017

Strong Balance sheet and liquidity

Efficiency and Profitability

INR Cr.INR Cr.

NII = Interest income on Portfolio loans + Excess interest

spread on securitization/Income from Assignment + BC

Fee – Financial Cost

Note: Above Data for FY17 except Marginal Cost of Borrowing

Non-AP = excluding states of AP and Telangana

# includes on and off b/s borrowings (excluding processing fees) for Q4FY17

*includes securitized, assigned and managed loans

^Includes MAT Credit of Rs. 109 Crs for FY17 and unrecognized MAT credit of

Rs. 97 crs as on 31st March,2016.

Odisha18%

Bihar15%

West Bengal13%

Karnataka12%

Maharashtra11%

Uttar Pradesh

7%

Kerala6%

Rajasthan5%

Jharkhand4%

Madhya Pradesh

4%

Others6%

2.2%

2.2%

2.2%

2.6%

2.8%

2.8%

3.4%

3.6%

3.9%

6.7%

Vanguard

IDFC Mutual Fund

Wellington

Matthews India

Tree Line

William Blair

East Bridge Capital

Morgan Stanley Investment Management

Amansa Capital PTE Limited

Morgan Stanley Mauritius

Top 10 Shareholders

Figures rounded off to the nearest digit across the presentation

5

INVESTMENT HYPOTHESIS

5

INVESTMENT HYPOTHESIS

BFIL is the most efficient and lowest cost lender among NBFC-MFIs

Impeccable track record of meeting financial obligations in a timely manner even during the black swan event of AP-MFI Crisis

Diversified earnings stream with cross-sell / Non-Loan revenue contributing 17% to Profit* for FY17.

Pan-India presence with no unbalanced geographic sectoral exposure

Strong solvency (Capital Adequacy of 33.5% as on 31st Mar 2017) and sufficient liquidity

Steady state RoA of 4% is the highest among financial services play

Favorable Macros

Unmatched leadership

There is a huge demand/ supply gap for microfinance

Entry barriers and supervisory standards are significantly enhanced thwarting future competition

No credible alternative for microfinance emerges even after 6.3 years of AP MFI Act

Regulatory Clarity

RBI’s comprehensive regulatory framework mitigates political and regulatory risks

RBI and MoF acknowledge microfinance as a key component of financial inclusion

PSL requirement of banks to enhance funding availability and value of the franchise

6* Calculated as Gross Fees less incentives to Profit Before Tax for FY17.

7

Segment -1

70 mn households in India

with some assets (INR

90/day PPP)

Segment -2 (BPL)

80 mn households in India

with no assets (INR 55/day

PPP)

THERE IS A HUGE UNMET DEMAND FOR MICROFINANCE

Assumptions

• Target households: 150 mn

•Basis: World Bank poverty statistics, India

• Avg. credit requirement: per household Rs. 45,000 (2015), adjusted with inflation on per

household Rs 20,000 (Year 2005)

•Basis: EDA Rural Systems, World Bank, Access to Finance

• Adjustment for service difficulties: 20%

•Basis: adjustment made to reflect inaccessible poor in rural areas (~7%) and half of

underserved urban poor (0.5 x 26% = 13%)

Source: World Bank; Sa-Dhan Bharat Microfinance reports

38,558 59,860 72,345

24,017

27,582 37,286

FY14 FY15 FY16

MFIs SHG

Micro-Credit Demand In India

covered in part by

moneylenders and

informal sources,

but largely untapped

*Disbursement in INR Crs.Demand

Rs. 2,40,000 Crs.

* *

Rs.87,442 crs

Rs.62,575 crs

Rs. 5,40,000 Crs.

Year 2005

Year 2015

*

Rs.1,09,631 crs

8

COMPANY OVERVIEW

8

9

Survey a village Recruit members

Deliver doorstep service Provide training

BFIL USES GRAMEEN MODEL TO PROVIDE UNSECURED CREDIT AT THE

DOORSTEP OF LOW INCOME RURAL WOMEN

Put loan

officers pic

1,484

2,875

3,503

FY 12 FY 13 FY 14

Drawdowns

AP exposure of Rs. 1,360

crore written off

Q3FY11 Q4FY14 Var.

Branches 2,403 1,255 -48%

Other Opex (INR crore)

51 21 -60%

Headcount 25,735 8,932 -65%

Personnel Cost (INR crore)

89 43 -52%

3,526

1,185

2,837

Q3FY11 Q3FY12 Q4FY14

Non–AP Gross Loan Portfolio

(13.6) (3.0)

70

FY12 FY13 FY14

Return To Profitability

Bn Bn

INR crore

BUILDING BLOCKS OF TURNAROUND POST AP MFI CRISIS

Balance Sheet Cleansed Supply-side Shock Managed Credit Growth Resumed

Cost Structure Optimization

10

12.6% 11.9%10.2%

8.9%

FY14 FY15 FY16 Q4FY17

Marginal Cost of Borrowing#

74.5%

61.1%

48.3% 50.0%

FY14 FY15 FY16 FY17

Cost to Income

2000 2014 -152012Yrs

14%

8%1,229

Oct’10 June’12 Dec’16

28,300

14,600

Non-AP Portfolio Outstanding

3,945

BFIL

Others

INR Crs.

▪ Net worth - Rs. 2,447 crs

▪ CAR - 33.5% (RBI Requirement

15%)

# On and Off balance sheet borrowings (excl. Managed

Loans) including processing fees 2015 -16

BFIL

Disbursement

share 24%* in

Q3FY17

* Industry

disbursements for

Q3FY17 is Rs.

12,424 crs.

Sep-16 data as per MFIN; (excludes data for Bandhan bank and Equitas)

15%8,531

56,634

DURABLE FOUNDATION FOR SUSTAINABLE GROWTH (1/2)

Market Share Regained

Technology Upgraded

Capital Reinforced

Efficiency Gains

Installed Computers at all branches with In-House lending system

All branch connectivity with daily data receipt (1,215 remote locations)

Refactoring of In-house lending system

Equipped Loan Officers with tablets

Mobile/ digital/ cashless transactions

2016 -17 11

29.25%

24.55%23.55%

22.00%20.75%

19.75%

Oct-10 Jan-11 Oct-14 Jul-15 Oct-15 Dec-15

4.8% reduction since Oct’14

GLP: Gross Loan PortfolioTerm loan and cash credit facilities

Interest rate on income generation loans

74%

37%

Mar-13 Mar-17

Share of borrowing from top 5 banks

53%

46%

Sep-10 Mar-17

Top three states share in GLP

Political Risk Mitigation through interest rate reduction

Reduced Borrowing Dependence Lower State Concentration

DURABLE FOUNDATION FOR SUSTAINABLE GROWTH (2/2)

12

CLARITY ON MAJOR UNCERTAINTIES

POST AP MFI CRISIS

13

WHAT DOESN’T KILL YOU, MAKES YOU STRONGER - POSITIVE DEVELOPMENTS POST AP MFI CRISIS

Will there be multiple

regulators?

▪ Regulatory clarity – RBI to be the sole regulator

Funding uncertainty?

▪ Priority sector status continues

▪ MFIs are the only indirect priority sector dispensation

Will there be contagion?

▪ No contagion

▪ Since past 6.3 years no other state has followed suit

Has the operating model

been challenged?

▪ Collection efficiency maintained despite disbursements being a fraction

of collections during the wind-down mode i.e. Oct’2010 to June’2012.

▪ No alternative credit delivery model has gained currency.

What will be the economics

under regulated interest

rate regime?

▪ RoA of 3-4% on a steady-state basis

Concerns Clarity

14

OPERATING MODEL VAILIDITY ESTABLISHED

3,942 3,526

2,706

2,101

1,635

1,185 1,320 1,229

Q2FY11 Q3FY11 Q4FY11 Q1FY12 Q2FY12 Q3FY12 Q4FY12 Q1FY13

Collection efficiency of 97% during wind-down mode dispels ever greening myth

Non-AP

Loan

Portfolio

No. of non-AP borrowers who repaid on-time

during this period5.2

No. of non-AP members who availed loans

during this period3.3

No. of non-AP members who didn’t

receive any incremental credit from BFIL

during this period

1.9

in Millions

1.9 million borrowers repaid loans

without incremental lending

INR crs

Internal generation -- and not incremental debt --

aids prompt repayment

MFI Industry non- AP Portfolio Outstanding (Rs Cr)

Oct’10 28,300

June’12 14,600

15

Sector outstanding

Non-AP Portfolio

Oct ’10 – 28,300

Mar’14 – 24,615

Mar’15- 40,138

Mar’16- 53,155

Dec’16- 56,634#

Market Share Dynamics

2nd, 3rd, 4th and 5th

largest MFI playerswith 40% Non-APmarket share areunder CDR.

Institutional Infrastructure

Credit Bureaus-

- Equifax & Highmarkare functional

- 95% of MFIs now use CB reports for disbursements

COMPETITIVE LANDSCAPE CHANGES TO BFILS’ ADVANTAGE

INR crore

• No. of loan records - 23.6 Crore

• No. of borrower records – 7.3 Crore

• No. of loan records (live) – 6.3 Crore

• No. of borrower records (live) – 3.8 Crore

• No. of MFIs reporting – 141

Snapshot of Equifax Credit Bureau*:

* Source: Equifax (as on Jan 2017), Excluding A.P and Telangana

# Dec-16 data as per MFIN; excludes data for Bandhan bank, Equitas;

16

7.5

6.5

1.01.6

5.0

1.9

19.75

STEADY-STATE ROA OF 4% CAN BE TARGETED

Processing fee

Interest rate

RevenueProfitTaxesProv. &

Write-off

Operating

cost

Financial cost

▪ Marginal Cost of

borrowings: 9.4%.

▪ Portfolio funded by debt:

80%

21.6

*interest rate charged is 19.75% for new loans effective from 7th Dec’15

#Processing fee is calculated based on weighted average portfolio mix of 50% IGL (1 Yr. loan) , 25% LTL (2 Yr. loan) and 25% MTL

(1.5 Yr. loan)

*

#

Minimum Alternate Tax @ 21%

17

GROWTH ANATOMY

18

3,942

1,185 1,320

2,016

2,837

4,171

6,177

7,677

8,531

Sep'10Dec'11 Mar'12 Mar'13 Mar'14 Mar'15 Dec'15 Mar'16 Dec'16

BFIL GLP*

28,300

14,600 16,740

24,499

38,386 36,912

55,266 56,634

-3,000

7,000

17,000

27,000

37,000

47,000

57,000

67,000

77,000

87,000

Oct'10 Jun'12 Mar'13 Mar'14 Mar'15 Dec'15 Mar'16 Dec'16

Industry GLP*

6.3 YEAR CAGR FOR THE SECTOR AND BFIL ARE 12% AND 13% RESPECTIVELY

* Non-AP GLP (Gross Loan Portfolio), Industry GLP data excludes Bandhan (Dec’15, Mar’16,Dec’16) and Equitas data for (Dec’15, Dec16)

Source: MFIN Micrometer (Mar’13,Mar’14, Mar’15, Dec’15, Mar’16,Dec’16 data)

19

Top 10 States by

GLP*

Industry Bharat Financial Inclusion Ltd.

GLP Q3FY17

(Rs. Cr.)YoY growth

GLP Q3FY17

(Rs. Cr.)

YoY

growth

Karnataka 8,081 40% 1,130 26%

Tamil Nadu 7,039 4% - -

Maharashtra 6,495 30% 1,058 36%

Uttar Pradesh 5,962 31% 697 20%

Bihar 3,975 75% 1,114 71%

Madhya Pradesh 3,946 20% 362 7%

West Bengal 3,499 43% 975 74%

Odisha 3,151 24% 1,481 33%

Kerala 3,009 62% 461 25%

Gujarat 2,113 34% - -

Overall 56,634 34% 8,531 38%

WE GREW SLOWER THAN THE SECTOR IN 7 OUT OF TOP 10 STATES

*Q3FY17 excludes Equitas data

Source: Micrometer

Growth > Industry

Growth < Industry

20

Top 10 growth

States*

Industry Bharat Financial Inclusion Ltd.

GLP

Increase

Q3FY17

(Rs. Cr.)

Contribution

to growth

GLP Increase

Q3FY17

(Rs. Cr.)

Contribution to

growth

Karnataka 2,290 16% 235 10%

Bihar 1,703 12% 463 20%

Maharashtra 1,488 10% 281 12%

Uttar Pradesh 1,401 10% 114 5%

Kerala 1,156 8% 93 4%

West Bengal 1,057 7% 414 18%

Jharkhand 663 5% 125 5%

Madhya Pradesh 661 5% 24 1%

Haryana 645 5% 56 2%

Odisha 607 4% 370 -

Other States 2,632 18% 178 8%

Overall 14,303 100% 2,353 100%

OUR GROWTH PATTERN IS DIFFERENT FROM THE SECTOR (CONT..)

*Q3FY17 data excludes Equitas data

Source: Micrometer

Growth > Industry

Growth < Industry

21

21%

53%

33%

79%

47%

67%

0% 20% 40% 60% 80% 100%

BFIL- Mar'17

MFI Industry -Dec'16*

MFI Industry-Mar'13^

Urban Rural

……INDUSTRY GROWTH SKEWED TOWARDS URBAN, WHEREAS WE REMAIN RURAL FOCUSED

Industry growth skewed

towards urban

We are rural

focused

Source: ^Sa-Dhan Report 2013,*MFIN Micrometer

22

20% 14% 7% 46%

AUM GROWTH IS PRIMARILY DRIVEN BY CUSTOMER ACQUISTION

Increase in

No. of

Borrowers

Increase in

Ticket sizeChange in Loan

duration^ AUM growth

27% 22% 18% 84%FY16

12% 6% 24% 47%FY15

26% 4% 8% 41%FY14

Notes:

^ Due to the impact of long term loans ( 2 years duration), which was piloted in FY14 and rolled out in FY15.

CAGR last

4 yrs.

23

15% 24% -16% 19%FY17

21,90921,201

18,38415,426 14,738

-7,500

2,500

12,500

22,500

32,500

MFI 1 MFI 5 MFI 3 BFIL (MFI 2) MFI 4

OUR OUTSTANDING PER BORROWER CONTINUE TO BE LOWER

MFI 1 – 5 are ranked in the order of Gross Loan Portfolio Source: Q3FY17 Micrometer

AVERAGE LOAN OUTSTANDING PER BORROWER

INR Figures for Q3FY17

24

OUR FOCUS ON AADHAAR ENHANCES CREDIT QUERY EFFICIENCY

* Primary KYC has to be Aadhaar or Voter ID

• Internal CAP of Rs. 60,000 for total indebtness of the

borrower, including loans from other MFIs..

CB REJECTIONS TREND

Rejection Reasons* - Q4FY17 % Mix

*Note: Rejections are done based on data inputs from Credit

bureau

9% 8% 9% 8% 9%

14%15%

21%24%23%

18%20%19%19%21%

23%23%

28%29%

22%24%22%23%25%25%25%24%25%25%26%26%25%25%24%24%25%

CB Rejection %57% of credit

enquiry with

Aadhaar as

primary KYC

99.6% of credit

enquiry with

Aadhaar as primary

KYC

Mandatory

submission

of 2 KYCs *

Reasons All Products LTL

Loans from=>2MFIs 54% 53%

=>2MFIs and Default History 13% 9%

=>2MFIs and Outstanding Balance >60K 11% 12%

Default History 9% 6%

Outstanding Balance>60K 6% 11%

Eligibility< Min Ticket Size 4% 6%

=>2MFIs,Outstanding Balance>60K and

Default History3% 2%

Default History and Outstanding Balance >60K 0.4% 0.4%

Total 100% 100%

25

State SHG Exposure* BFIL Exposure*

Andhra Pradesh 30% -

Telangana 17% -

Karnataka 13% 12%

Tamil Nadu 11% -

West Bengal 7% 13%

Kerala 4% 6%

Odisha 3% 18%

Maharashtra 3% 11%

Uttar Pradesh 3% 7%

Bihar 2% 15%

Madhya Pradesh 2% 4%

Assam 1% -

Rajasthan 1% 5%

Jharkhand 0.6% 4%

Gujarat 0.5% -

Chhattisgarh 0.5% 2%

Haryana 0.4% 2%

Punjab 0.3% 2%

Tripura 0.2% -

Himachal Pradesh 0.2% 0.1%

Others 0.6% 0.7%

BFIL HAS NIL EXPOSURE IN SHG CONCENTRATED STATES

SHG Exposure <4%

SHG Concentrated

States

*SHG Data (Source: NABARD Status of Microfinance in India-2016), BFIL data as on Mar’1726

FUTURE STRATEGY

27

OPPORTUNITIES CHALLENGES

A COMPARATIVE STUDY OF STRUCTURAL OPPORTUNITIES & CHALLENGES

✓ Access to low cost funds/deposits

✓ Bank accounts to customers

✓ Political risk mitigation

× CASA can be competitive only in the long

term

× CRR and SLR drag

× No PSL benefit on bank borrowings

× Interbank borrowings capped at 3x Net

Worth

× Cannot act as Business Correspondent

(BC) to other banks

× Investment in technology, infrastructure

and functional capabilities for banking

SFB

✓ Generate Agri-allied/ PSL for banks

✓ Leverage Business Correspondent (BC)

model to offer bank accounts and saving

products to customers without CRR and

SLR drag

× Political risk beyond a size

× Cannot access deposits

NBFC-MFI

28

528

381

804

20-Jul-15 18-Sep-15(RBI announcement on SFB in-principle license on 16 Sept'15)

28-Apr-17

BFIL Share Price

Political Risk mitigation Sub-20% interest rate mitigates political risk

• BFIL is the lowest cost lender with 19.75% interest rate amongst

NBFC-MFIs1

Access to refinance Access to refinance is now available to NBFCs also

• BFIL has accessed Rs.200 Cr refinance from MUDRA2

Bank accounts for customers

▪ Migration to cashless regime to

reduce opex

• Seed Jan-Dhan accounts of members

• Open bank accounts for members as BC for other banks3

Downward adjustment of risk

premium to reduce cost of

borrowings

• Lowest borrowing cost in the sector

• Highest safety Short-term rating at (A1+) and Long-term rating at

(A+)

• Strong Balance Sheet : Strong solvency and sufficient liquidity

• Relationship premium from credit grantors

4

SFB - MISSED OPPORTUNITY BUT NOT A SETBACK

MARKET ENDORSEMENT

Rationale for SFB application Mitigants / Counter Strategies

29

UNMATCHED LEADERSHIP

Unique

Operating Model

Extensive

Reach*

Lowest Cost

Producer

External

endorsements

Parameter

▪ Interest rate

▪ No. of districts

▪ No. of customers

▪ Group Lending

▪ Rural customer base

▪ Rating/Grading

Status

▪ 100%

▪ ~79%

▪ Lowest interest rate of

19.75% amongst NBFC-

MFI

▪ 322

▪ 6.7 Mn

▪ Highest Code of Conduct

Assessment Grading “C1”

▪ Corporate Governance rating at

“CGR2”

▪ Highest safety Short-term rating at

“A1+”

30

THE MOST EFFICIENT MFI IN THE GLOBE

10

Metric

▪ Sub-20

Interest

Rate to

Borrower

▪ Cost to

Income

Ratio

▪ Balance sheet

strength

▪ Stellar

repayment

record

▪ Judicious

sources mix

▪ Technology

initiatives

▪ Scale

▪ AUM

growth

▪ Operating

leverage

▪ Non-Loan

revenue

Drivers

▪ Marginal

cost of

Borrowing

▪ Cumulative

next 2

years salary

increase to

field staff

Target %

▪ Annualised

earnings

growth

Medium Term Strategic Priorities:

20 30 40 50

▪ Low marginal

cost of borrowing

▪ Scale &

Efficiency

▪ Productivity &

Efficiency

Status –

FY179.4* 19.75 15 50 -4#

*on and off b/s loans (including processing fees)# YoY% Profit Growth, including MAT credit of Rs. 109 Crs for FY17 and unrecognized MAT credit of Rs. 97 Crs as on 31st March,2016

31

CREATIVE DISTURBANCE TO ASSET-REVENUE-EARNING CORRELATION

10%

90%

Revenues

5%

95%

Assets*

15%

85%

Earnings

*Note: Core microfinance will continue to be more than 95% of credit assets

Medium-Term Targets

MFI

Non - MFI

Non-MFI Actuals – FY17

17.2%*

2.5%

0.4%

32* Calculated as Gross Fees less incentives to Profit Before Tax for FY17.

PILOT ON RETAIL DISTRIBUTION

AND SERVICE POINTS (RDSP)

33

WE MEET OUR BORROWERS 52 TIMES A YEAR

Door Step Delivery

During Center Meeting Hours, At any moment: 8,500+ Center Meetings take place & more than 2.6

lakh borrowers are met across the country

Center Meeting

Unique Distribution Channel

Convenient Day:

Monday to Friday

Convenient Timings:

Between 7 AM to 11 AM

Providing Financial &

Non-Financial Products

…AND WE UTILISED THIS CHANNEL FOR FACILITATION OF MULTIPLE FINANCIAL AND NON

FINANCIAL PRODUCTS.

34

DIGITAL AND PROCESS INITIATIVES HAVE HELPED REDUCE CENTER MEETING DURATION

EARLIER CENTER MEETINGDURATION

45 mins

WITH TAB AND PAPERLESS

35 mins

WITH CASHLESS AND RDSP

20 mins

• More time for value added activities at center meeting

• More center meetings per SM per day

RDSP CREATES A PARADIGM SHIFT IN CLIENT CONNECT…

35

FROM

TO

CENTER MEETINGS2 lakhs

• Once a week

• Limited and fixed time

• Cash points at a distance

• Along with 29 other members, limited

Sangam Manager bandwidth

Center meeting duration: 45 Mins

Customer

Avg. Distance:• Bank: 2 -5 KM• ATM: 1-3 Km

Dist <0.5 KM

Friendly Neighborhood

Bank

RDSP

• Cashless center meetings

• Alternative to members for services out

of center meeting as well

• Local and perpetual presence

• On demand accessibility

• Products on display

• Co-branding of banking partner and BFIL

• E-commerce feasibility

CENTER MEETINGS2 lakhs

RDSP2 lakhs+

Bank / ATM

Center meeting duration: 20 Mins

…AND PRODUCES MULTITUDE OF OPPORTUNITIES

36

Leveraging distribution

strength

Last mile for leading retailers

~₹80 Cr per day

~₹60 Cr per day

0.002

0.01

0.4

0.7

1.7

2.1

17

23

0 5 10 15 20 25

Two wheelers

Mixer grinders

Water purifiers

Cooking stove

Cycles

Sewing machines

Solar Lamps

Mobile Phones

U N I T S I N L A K H S

THE MODEL IS PROVEN THROUGH CENTER MEETINGS

IMMENSE E-COMMERCE POTENTIAL WITH RDSP IN PLACE EXISTING PARTNERS POTENTIAL BUSINESS OPPORTUNITY

OVER 45 LAKH NON FINANCIAL

UNITS FACILITATED*

*Cumulative units facilitated of non financial products as of Mar’17

RDSP

• E Commerce

• Railway ticketing

• OTC insurance

UPDATE ON CASHLESS AND E-KYC

37

E-KYC, E-SIGN AND INSTANT CB ROLLED OUT ACROSS ALL BRANCHES

• E-KYC, E-Sign and instant CB rolled out in all the branches by 16th Mar’17

• Completed training and handholding by IT, PTC and process team

38

Status

e-KYC, e-sign

Benefits

•Digitized Loan Application

•Saves CM by reducing signature on Loan Application

•Step Forward to Paper Less

•Minimize the risk of theft and robbery.

•Minimize the risk of high volume cash carrying and transactions

•Instant Approval.

•Reduced Loan Processing TAT

• Increased Business Volume

•Immediate member authentication

•Eliminates risk of fake borrowers

E-KYC Instant CB

E-signCashless Disbursement

• Time saving in center

meeting and at the

back office.

• Better competitive

advantage.

CASHLESS DISBURSMENTS ROLLED OUT IN ALL BRANCHES, 75% CASHLESS DISBURSEMENTS IN APR’17

39

12% 12%

25%

75%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Jan'17 Feb'17 Mar'17 1st to 24 Apr'17

Cashless Disbursement as % of Total Disbursement

CASHLESS PROCESS

CASHLESS DISBURSEMENT PROCESS

Center

meeting

Proposal on

TABE- KYC Instant Credit

Bureau

ABPS based

Loan

disbursal

Confirmati

on to

Customer

Customer

Consent

40

Sangam

Manager

checks the

willingness for

a new loan in

the center

meeting

Loan details

are recorded

in the proposal

screen on the

tab

Customer

consent is

taken and the

biometric

details are

captured

E-KYC is done

using online

UID data

check. This

happens

instantly in the

center meeting

Parallel CB

check

happens and

the customers

eligibility for

the loan and

the loan

amount gets

determined

Loan amount

is approved

and loan

proposal is e-

signed

Disbursement

is done on the

same day in

the Aadhar

linked bank

account

through ABPS

Customer gets

the

disbursement

confirmation

through an

SMS

E-sign

Status

CASHLESS DISBURSEMENT ACTIVATED IN ALL BRANCHES ACROSS THE COUNTRY

• 23.48 lakh bank accounts sourced through UID

• 15.20 lakh additional NEFT accounts sourced

• Cashless disbursement training and roll out completed in all the branches

LOANS FOR HOUSING IMPROVEMENT

& TWO-WHEELER (PILOT)

41

Assumptions

• Rural households: 166 mn

•Basis: Census 2011

• Adjustment : 46 mn

• For service difficulties: 20%

• For rented houses: 5% (source:

NSSO survey)

• For HHs with no house: 4 mn

(Source: NSSO survey)

• Addressable HH: 120 mn

• Annual no. of HH : 14 mn

• % of HHs having spent on

construction in last 1 yr (Source

NSSO survey): 12%

• Avg. credit requirement: Rs 100,000

per household

42

HUGE UNMET DEMAND FOR RURAL HOME IMPROVEMENT/EXTENSION LOANS

*FY15 disbursement of PSBs Rs.5,231 crs and HFCs Rs.3,146 crs (< Rs.5 lacs ticket size)

Source:(NHB Report on Trend & Progress of Housing in India 2015 )

Dollar Exchange rate for 27th April 2017 Rs. 64/-

Annual Disbursement Annual Demand

Gap filled by:

Own funds - 66%;

Family, Friends &

Money Lenders - 34%.

Rs. 1,40,000 Crs. ($22bn)

Rs. 8,377 Crores ($1.3 bn) *

NO FORMAL LENDER DUE TO OPERATING

CHALLENGES IN THIS SPACE

43

Easier, larger

opportunity in urban,

semi-urban

Lacks Rural Presence

Lack of title deeds

High Transaction

costs

Metro Urban Semi Urban Rural

Salaried Very High High Moderate No Competition

Professionals High Moderate Low No Competition

Self Employed Moderate Low Very Low No Competition

No Rural Focused Player

Operating Challenges in Rural

Purpose Home improvement and

extension

Eligibility Criteria • Should have completed at

least 3 IGL loan cycles

• Age between (18 to 55 years)

Ticket size Rs. 1,00,000 to Rs. 5,00,000

Loan Tenure 3 to 5 years

LTV (Loan to

Value Ratio)

Up to 75% of property value

Repayment

Frequency

Monthly

Our Product Offering

PILOT DETAILS

LOANS FOR TWO WHEELER

Product Details

Purpose Purchase of Two Wheeler

Eligibility ▪ Member of Joint Liability Group

▪ Minimum Two IGL Loan cycle completed

▪ Should not have availed IGL/MTL/LTL in last 12

weeks

▪ Exposure to borrower capped to Rs. 75,000 –

(within BFIL) and Rs. 1 Lacs across the MFIs

Ticket Size Rs. 33,000, Rs. 38,775 and Rs. 42,915

Loan Tenure 104 Weeks

Loan To Value 80% of On-road price of the vehicle (subject to a

maximum amount of Rs. 42,915

Repayment Frequency Weekly

44

Note: Portfolio outstanding for Two wheeler loans as on 31st Mar’17 Rs. 0.51 Crs

Q4FY17

PERFORMANCE HIGHLIGHTS

45

HIGHLIGHTS OF Q4FY17

▪ Networth of Rs.2,447 Crs. and Capital adequacy at 33.5% as of Mar 31, 2017.

▪ Incremental drawdowns of Rs.2,576 Crs.(growth of 146% QoQ) in Q4FY17 and Rs. 6,900 Crs. in FY17 (Rs.

7,317 Crs. in FY16) excluding origination under managed loans. BFIL also originated Rs.184 Crs. in Q4FY17

and Rs. 1,018 Crs. in FY17 (Rs. 1,064 Crs. in FY16) loans under managed portfolio.

▪ Loan disbursement of Rs. 3,902 Crs. (growth of 31% QoQ ) in Q4FY17 and Rs. 14,667 Crs. in FY17 (Rs. 12,088

Crs in FY16).

▪ Non-AP Portfolio grew by 19% YoY and 7% QoQ to Rs.9,150 Crs. as of Mar 31, 2017.

▪ Marginal cost of Borrowings* reduced to 8.8% in Q4FY17 from 9.9% in Q3FY17.

▪ Weighted avg. cost of borrowing(On-B/S - daily average)** reduced to 10.6% in Q4FY17 from 10.8% in Q3FY17.

▪ MAT Credit of Rs. 16 Crs. has been recognised on the balance sheet in Q4FY17,with this accumulated MAT

credit is Rs. 206 Crs. as on Mar 31,2017.

▪ The un-availed deferred tax benefit of Rs.281 Crs. will be available to offset tax on future taxable income.

▪ Loss for the period of Rs. 235 Crs. ( Pre-Provision Profit of Rs. 100 Crs) in Q4FY17 and Profit of Rs. 290# Crs

for FY17

▪ Cash & Cash equivalent^ of Rs.2,505 Crs as of Mar 31,2017.

▪ Code of Conduct Assessment Grading “C1” (Highest) by ICRA – Highest among MFIs.

▪ Disbursement to Bank Accounts (cashless disbursements) rolled out across all branches, 75% cashless

disbursement in the month of April (1st to 24th April).Note:

* Includes on and off balance sheet borrowings and excluding processing fees.

**Including processing fees.# Including MAT Credit of Rs. 97 Crs as on 31st March, 2016

^ Excluding security deposit.

Figures rounded off to the nearest digit across the presentation. Figures and ratios have been regrouped wherever necessary.46

OPERATIONAL HIGHLIGHTSParticulars Mar-16 Mar-17 YoY% Dec-16 QoQ%

Branches 1,324 1,399 6% 1,391 1%

Centers (Sangam) 2,46,647 2,79,252 13% 2,74,773 2%

- Centers in non-AP States 1,75,774 2,30,367 31% 2,25,888 2%

Employees (i) + (ii) + (iii) + (iv) + (v) + (vi)+(vii) 11,991 14,755 23% 14,823 -

▪ Field Staff (i) + (ii) + (iii) + (iv) + (v) 11,689 14,030 20% 14,146 -1%

– Sangam Managers* (i) 6,884 9,157 33% 9,422 -3%

– Sangam Manager Trainees(ii) 1,008 616 -39% 450 37%

– Branch Management Staff (iii) 2,576 2,853 11% 2,866 -

– Area Managers (iv) 155 234 51% 237 -1%

– Regional Office Staff (v) 1,066 1,170 10% 1,171 -

▪ Central Processing Unit and Member helpline (vi) 99 404 - 338 20%

▪ Head Office Staff (vii) 203 321 58% 339 -5%

Members in non-AP States (in '000) 5,566 6,700 20% 6,585 2%

− Members added (in the quarter) (in ‘000) 806 325 -60% 444 -27%

Active borrowers in non-AP States (in '000) 4,637 5,324 15% 5,530 -4%

− Active borrowers added (in the quarter) (in ‘000) 845 421 -50% 469 -10%

No. of loans disbursed (in '000) 2,386 1,758 -26% 1,583 11%

Disbursements (for the quarter) (INR Crs.) 4,066 3,902 -4% 2,981 31%

Gross loan portfolio – Non-AP (INR Crs.) (A+B+C+D) 7,677 9,150 19% 8,531 7%

• Loans outstanding (A) 4,965 7,176 45% 6,891 4%

• Securitized (B) 1,707 754 -56% 857 -12%

• Assigned (C) 316 536 69% 60 -

• Managed loans (D) 688 684 -1% 723 -5%

Operational Efficiency – Non-AP :

Off-take Avg (Disbursements/ No of Loans disbursed) (INR) 17,049 22,194 30% 18,828 18%

Off-take Avg Excluding Cross Sell 20,578 23,263 13% 22,287 4%

Gross loan portfolio/ Active Borrowers (INR) 16,557 17,187 4% 15,426 11%

Gross loan portfolio/ No. of Sangam Managers (Rs. '000) 12,141 10,574 -13% 9,569 11%

Active borrowers / No. of Branches 3,893 4,205 8% 4,396 -4%

Active borrowers / No. of Sangam Managers 733 615 -16% 620 -1%

*Sangam Managers (SMs) are our loan officers who manage our centers (also called Sangams). As of Mar’17, we had 8,653 SMs in Non-AP States 47

IMPROVING FINANCIAL EFFICIENCY

Best before

AP MFI crisis

Worst during

AP MFI crisisFY14 FY15 FY16 Q1 FY17 Q2 FY17 Q3 FY17 Q4FY17 FY17

Productivity – Non-AP:

Borrowers/ SM 489* 287 721 787 733 690 626 620 615 615

Gross Loan Portfolio/ SM ('000) 3,640* 1,320 6,275 8,994 12,141 11,469 10,297 9,569 10,574 10,574

Offtake Avg. 10,299* 9,237 11,849 12,273 15,024 16,758 17,744 18,828 22,194 18,676

Offtake Avg. (Excl Cross-sell) 10,383* 11,021 12,277 14,149 18,102 19,986 20,834 22,287 23,263 21,491

Cost Efficiency:

Financial Cost %** 6.6% 9.8% 8.3% 8.3% 8.5% 6.7% 7.2% 7.5% 7.4% 7.3%

On B/S daily Wt. Avg. Cost of

borrowings % (excl. processing

fees & other charges)

9.7%^ 12.9%^ 13.0% 12.8% 11.7% 11.0% 10.8% 10.6% 10.4% 10.7%

On B/s daily Wt. Avg. Cost of

borrowings %10.3%^ 16.0%^ 13.9%# 13.5%# 12.0%# 11.2%# 11.0%# 10.8%# 10.6% 10.9%

Opex/ Gross Loan Portfolio % 10.4% 21.7% 9.6% 9.5% 7.1% 6.3% 6.3% 6.6% 6.6% 6.5%

Cost to Income Ratio 52.4% 275% 74.5% 61.1% 48.3% 45.7% 47.0% 49.5% 59.3%## 50.0%##

Credit Quality - Non-AP:

Gross NPA% 0.20%* 5.5% 0.1% 0.1% 0.1% 0.1% 0.1% 0.06% 6.0%^^ 6.0%^^

Net NPA% 0.16%* 2.9% 0.1% 0.1% 0.04% 0.03% 0.04% 0.03% 2.7% 2.7%

*Enterprise figures includes figures from AP state

** Financial expenses to Avg. Gross Loan Portfolio

^Cost of borrowing for Best before AP MFI crisis and Worst during AP MFI crisis calculated on monthly averages and Includes processing fee for on and off balance sheet

# Includes processing fee for on b/s funding only, for FY 14 Rs. 13 Crs, FY15 Rs. 14.3 Crs. FY16 Rs.10.5 Crs. ,FY17 Rs. 10.4 Crs, Q1FY17 Rs. 1.7 Cr, Q2FY17 Rs. 2.3 Cr,

Q3FY17 Rs. 3.3 Crs, Q4FY17 Rs.3.1 Crs.

##Cost to income reduces to 55.0% and 49.2% for Q4FY17 and FY17 respectively , after adjusting interest reversal of Rs. 19 Crs on account of NPA in Q4FY17.

^^Rs. 4.3 Crs portfolio has been considered standard assets due to RBI dispensation .48

PORTFOLIO MIX CONCENTRATION NORMS

Metric % Cap on Disbursement* POS % Cap of Networth*

State

▪ <15%

▪ (20% for Karnataka &

Odisha)

▪ 75%

▪ (100% for the state of

Odisha, Karnataka and

Maharashtra)

District

▪ <3 %

▪ (4% for Karnataka &

Odisha)

▪ 5%

▪ (Only 5% of total operating

districts can go up to 10% of

Networth)

Branch

▪ <1 %

▪ (1.25 % for Karnataka &

Odisha)

▪ 1%

▪ (Only 5% of the total

operating branches can go

up to 2% of Networth )

NPA▪ No disbursement to a

branch with NPA > 1 %

Collection

efficiency

▪ No disbursement to a

branch with on-

time collection efficiency of

< 95%

15% Cap on portfolio outstanding for each state (20% for Karnataka and

Odisha)

*Subject to tolerance of 10%

Note: Portfolio percentage are based on proportion of

gross loan portfolio of respective states.

State %

0.1%

0.1%

1.1%

1.6%

1.3%

1.8%

5.3%

4.0%

4.8%

5.8%

9.4%

12.2%

14.2%

9.6%

11.1%

17.7%

0.1%

0.1%

0.6%

1.5%

1.6%

1.8%

3.8%

4.4%

4.5%

5.7%

6.7%

11.1%

12.4%

12.6%

14.9%

18.2%

Himachal Pradesh

Delhi

Uttarakhand

Punjab

Chattisgarh

Haryana

Madhya Pradesh

Jharkhand

Rajasthan

Kerala

Uttar Pradesh

Maharashtra

Karnataka

West Bengal

Bihar

Odisha

GLP Q4FY17

GLP Q4FY16

49

As of March 2017

VINTAGE OF NON-AP BRANCHES IS 7.4 YEARS PORTFOLIO OUTSTANDING BY ECONOMIC ACTIVITY

StateNo. of

Branches

Wt. Avg. Vintage

(in Yrs.)*

Karnataka 176 8.8

Odisha 163 8.1

Bihar 159 6.8

Uttar Pradesh 147 6.5

Maharashtra 135 7.6

West Bengal 130 8.0

Madhya Pradesh 73 8.2

Rajasthan 67 7.5

Kerala 58 5.8

Jharkhand 54 6.5

Chhattisgarh 38 5.2

Haryana 30 4.5

Punjab 18 7.6

Uttarakhand 12 6.5

Himachal Pradesh 3 2.3

Delhi 2 4.3

Non-AP 1,265 7.4

Purpose % Mix

Livestock 33%

Agriculture 14%

Grocery stores and other retail outlets 10%

Tailoring, Cloth weaving 9%

Trading of Vegetable & fruits 7%

Masonry, Painting, Plumbing,

Electrician, Carpenter and related6%

Vehicle repairs 5%

Eateries 4%

Trading of Agri-commodities 3%

Garments & Footwear retailing 3%

Trading of Utensils, Plastic items 1%

Bangles Shop 1%

Scrap Business 1%

Other income generating activities 6%

50

UPDATE ON DEMONETISATION

51

CREDIT BUREAU DATA ON (31-179 DPD) MFI INDUSTRY PORTFOLIO SIGNIFIES THE STRENGTH OF JLGLENDING MODEL, WEEKLY REPAYMENT FREQUENCY AND NON-URBAN GEOGRAPHIES

*JLG – Joint liability group lending model

14.5%13.1%

4.6%

Monthly Fortnightly Weekly

Repayment Frequency^ (31-179 DPD)

Urban Vs. Non-Urban (31-179 DPD)

JLG* Vs. Non-JLG model (31-179 DPD)

BFIL has 100% of

its loans in

Weekly

repayment format

52

17.0%

7.5%

Non-JLG JLG

BFIL has 100% of

its loans in JLG

format

17.3%

8.9%

Urban Non-Urban

^ The above data excludes 7% of Industry’s portfolio, which has

been categorized as “others” in repayment frequency.

# MFI portfolio in Top 50 Cities (by Population) of India are taken as

Urban portfolio

Source – Industry report by Equifax on Microfinance database as on Feb’17. This also includes data reported by Banks under Microfinance database.

91.0%

96.8%97.9% 98.2%

98.4% 98.5%

88.8%

93.5%94.9%

95.7% 95.9%

88.5%

92.4%

94.0%94.6%

89.2%

92.6%

93.6%

91.3%

93.2%

91.6%

As on 30th Nov'16 As on 31st Dec'16 As on 31st Jan'17 As on 28th Feb'17 As on 31st Mar'17 As on 25th Apri'17

11 to 30-Nov dues Dec'16 dues Jan'17 dues Feb'17 dues Mar'17 dues 1 to 25-Apr dues

GROSS COLLECTION EFFICIENCY FOR APR’17 HAS IMPROVED TO 96.7%

53

COLLECTION EFFICIENCY%

91.0%

92.5%

94.2%

95.5%

96.6% 96.7%

11 to 30-Nov-16 Dec'16 Jan'17 Feb'17 Mar'17 1st to 25-Apr-17

COLLECTION%*

* Collections for the Period/Dues for the Period Note: Cumulative Collection Efficiency for the period 11th Nov to 25th Apr is 94.5%

1,188

350

546

898 905

1,358

1,639

91%

67% 68% 71% 72%

122% 125%

-30%

-10%

10%

30%

50%

70%

90%

110%

-150

50

250

450

650

850

1,050

1,250

1,450

1,650

1,850

Oct'16 1 to 10-Nov 14 to 30-Nov Dec'16 Jan'17 Feb'17 Mar'17

Disbursements Disbursements as % of Collections

DISBURSEMENTS BACK TO PRE-DEMONETISATION LEVELS

54

INR Crores

Note :

Condition for disbursement in Partial Collection Centers– effective from12th Jan

• Min 2 groups in the centers have paid 100% of their dues*.

• No disbursements to arrear groups.

*For partial collection centers, Max Ticket size limit of Rs.21,184

Collections includes both principal and interest

(10 days)

(17 days)

ON BALANCE SHEET PORTFOLIO AGEING ANALYSIS

55

Date On B/S Portfolio Ageing

Total

Portfolio

(A+B+C

+D)

Curren

t (A)

1- 4

weeks

(B)

4-8

weeks

(C)

8-25

weeks (D)

>25

weeks

(E)

> 8 weeks

Expired

Contracts

(F)

Total

Overdue

Portfolio

(B+C+D+E+F)

31-Dec-16 6,891 5,822 716 341 13 - - 1,069

31-Jan-17 6,352 5,434 397 266 239 - 16 918

28 -Feb-17 6,879 6,075 258 163 353 - 30 804

31 -Mar-17 (E) 7,176 6,464 167 112 371 5 56 712

Portfolio of customers

who repaid once in last

two weeks (F)

- 6,464 157 90 92 - 9 -

Net (E-F) - - 10 22 279 5 47 363

Net % of Mar’17 Portfolio

(Rs. 7,176 Crs)- - 0.1% 0.3% 3.9% 0.1% 0.7% 5.0%

Asset Classification Total Standard Assets

Sub-

Standard

Assets

Loss Assets

Current1-4

weeks

4-8

weeks

8-25

weeks>25 weeks

> 8 weeks

Expired

Contracts

31-Mar-17 (G) 7,176 6,464 167 116* 371 5 52*

Provisions (H) 310 67 (1%) 185 (50%) 5 (100%) 52 (100%)

Net Loan Portfolio (G-H) 6,866 6,680 185 - -

INR Crs

* Rs. 4.3 Crs portfolio has been considered standard assets as per RBI dispensation

Note: Please refer slide 49 for company’s provisioning policy

OFF BALANCE SHEET COLLECTIONS ANALYSIS

56

Jan’17 Feb’17 Mar’17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19

Due (A)* 130 112 115 273 225 171 92 17 3 1 -

Collections (B)* 122 105 111 - - - - - - - -

Shortfall (A-B) 8 7 4 - - - - - - - -

Collections %(A/B)^ 93.7% 94.3% 96.4% - - - - - - - -

Securitisation

Managed Loans

Jan’17 Feb’17 Mar’17

Due (A)* 108 94 103

Collections (B)* 85 76 86

Shortfall (A-B) 23 18 17

Cumulative Shortfall 57 75 92

Collections %(A/B)^ 78.7% 81.2% 83.4%

*Includes both interest and principal

^Gross collections for the period/Dues for the period

Note 1: Credit enhancement for securitisation portfolio is upto 15% of portfolio securitised and

Note 2 : Maximum credit guarantee for managed loans is 15% and 10% of disbursement tranche for disbursements before Feb’16 and from Feb’16 and

At overall program level 15% and 10% of total managed loan portfolio outstanding originated before Feb’16 and from Feb’16 respectively at any point in time,

INR Crs

1. Managed Loans instalments overdue of Rs. 92 Crs as

on 31st Mar,2017

2. Maximum credit guarantee is Rs. 72 Crs as on 31st

March, 2017. (Refer Note 2)

a. Booked loss of Rs. 6.6 Crs as on 31st March,

2017 (Rs. 5.8 Crs in Q4FY17)

b. Created provisions of Rs. 65.4 Crs as on 31st

March, 2017.(Rs. 57.9 Crs in Q4FY17)

OUR PROVISIONING POLICY

RBI norms for NBFC-

MFIs

BFIL compliance

Asset

Classification

Standard Assets 0-90 days 0- 8 weeks

Sub-Standard Assets 91-180 days >8-25 weeks

Loss Assets>180 days

>25 weeks and

expired contracts> 8 weeks

Provisioning

Norms

Standard Assets

1% of overall Portfolio reduced by

Provision for NPA (If provision for

NPA < 1% of overall Portfolio)

0.35-1% depending on NPA or as

stipulated by RBI, whichever is

higher

Sub-Standard Assets 50% of instalments overdue* 50% of outstanding principal*

Loss Assets 100% of instalments overdue* 100% of outstanding principal/

write-off*

Provisioning

Norms for

Securitised &

Managed loans

-

As per the Company’s

provisioning policy for on-balance

sheet loans net of losses, subject

to the maximum guarantee given

in respect of these arrangements.

* The aggregate loan provision will be maintained at higher of 1% of overall portfolio or as per company’s provisioning policy.

* RBI dispensation on account of demonetization:

Additional 90 days for asset downgrade from standard to substandard for loans < 1 crore

A) In respect of dues during Nov & Dec-16

B) All standard assets as of 1st Nov that slipped for any reason upto Dec-16 57

Q4FY17 COMPANY’S PROVISIONS AND WRITE-OFFS BREAKUP VIS-À-VIS REGULATORY PROVISIONING NORMS

58

As on

31-Dec-16

(A)

As on

31-Mar-17

(B)

(C)Q4FY17 Impact

(B-A+C)

On Balance Sheet

Standard asset provisions 67.0 67.5 - 0.5

Sub-Standard asset provisions 1.9 185.3 - 183.4

Loss asset Provisions 0.3 57.4 - 57.1

Write-offs - - 0.2 0.2

Off Balance Sheet-ManagedProvisions 7.5 65.4 - 57.9

Losses* - - 5.8 5.8

Off Balance Sheet-SecuritisedProvisions 7.6 17.6 - 10.0

Losses^ - - 19.7 19.7

Total 84.3 393.2 25.7 334.6

* Losses for managed portfolio are due to settlement done for arrear loans with more than 135 Days

Past Due (DPD).

^ Losses for securitised portfolio are incurred due to short fall in collections in Q4FY17.

As on

31-Mar-17 (with

RBI

dispensation)

On Balance Sheet

Standard asset provisions 70.5

Sub-Standard asset

provisions1.3

Off Balance Sheet-Managed Provisions -

Off Balance Sheet-

SecuritisedProvisions -

Total 71.8

BFIL PROVISIONS AND WRITE-OFFs

RBI PROVISIONING NORMS

Company made excess provisions of

Rs. 321.4 Crs = (393.2 – 71.8)

over and above regulatory provisions.

Following RBI provisioning norms,

Company could have made

Provision reversal in Q4FY17 of

Rs (12.5 Crs) = (71.8 -84.3)

PROFIT FOR Q4FY17 WOULD BE RS. 105.4 CRS WITH RBI PROVISIONING NORMS AND DISPENSATION

59

*NPA calculation is in respect of on balance sheet portfolio only

INR Crs

Particulars

BFIL Policy

+With RBI

dispensation

(A)

BFIL Policy+

Without RBI

dispensation

(B)

RBI Policy+

Dispensation

(C)

Net Impact

(B-A)

Net Impact

(C-A)Remarks

Interest income for Q4FY17 286.7 286.6 305.6 (0.04) 18.9 Interest reversal on account of

difference in NPA recognition

Provision for standard assets 0.47 0.43 3.5 (0.04) 3.0

Difference due to provisioning

policy (Refer Slides 49,50)Provision for NPA* 240.5 244.8 (0.9) 4.3 (241.4)

Provision and Loss on

securitized / managed portfolio 93.3 93.3 10.4 - (82.9)

Difference due to provisioning

policy (Refer Slide 49,50)

Write-Offs 0.2 0.2 0.2 - -

Provisions/Loss/Write-offs for

Q4FY17 334.6 339.0 13.2 4.3 (321.4)

Profit/Loss before tax for

Q4FY17(234.9) (239.2) 105.4 (4.2) 340.3

REVIEW OF FINANCIALS

60

STRONG SOLVENCY AND SUFFICIENT LIQUIDITY

INR Crs.

Capital AdequacyNetworth

Cash and Cash Equivalent^Drawdowns*

^ Excluding security deposit - Rs. 366 Crs in Q4FY17

15.0%

33.5%

RBI Requirement

Q4FY17

3,224

1,048

2,576


1,383

2,671 2,447


*Excluding Managed Loans – Rs. 184 Crs in Q4FY17

1,660

1,824

2,505


61

84

143

(235)

303 290

Q4FY16 Q3FY17 Q4FY17 FY16 FY17

112 144 145

404

553


29%

YoY

37%

YoY

DISBURSEMENTS GREW BY 31% QoQ AND 21% YoY

62

PATOperating CostNet Interest Income*

* Net interest income (excluding loan processing fees) = Interest income on Portfolio loans +

Excess interest spread on securitization/Income from assignment + BC Fee – Financial Cost

Disbursements Non-AP Gross Loan Portfolio Gross Revenue

INR Crs.

4,066 2,981

3,902

12,088

14,667


21%

YoY

31%

QoQ7,677

8,531

9,150


19%

YoY7%Y

QoQ

370 455 409

1,321

1,728


184 221

178

641

848


32%

YoY

Ta

x E

xp

:Rs. 26

Crs

- - Rs. 91

Crs

Rs.-97

Crs

11%

YoY

^PAT including MAT credit of Rs.97 Crs as on Mar 31, 2016

^

31%

YoY

PROFIT & LOSS STATEMENT (1/4 )

Particulars Q4FY16 Q4FY17 YoY%

Q4FY17

As % of Total

Revenue

Q3FY17 QoQ%

Income from Operations

Interest income on Portfolio loans 239 287 20% 70% 346 -17%

Excess interest spread on securitization / Assignment 61 42 -31% 10% 22 92%

Loan processing fees 23 32 40% 8% 34 -5%

Other Income

Income on investments 12 30 149% 7% 25 21%

Recovery against loans written off 3 1 -64% 0.2% 1 66%

Facilitation fees from Cross-sell 15 3 -78% 1% 10 -68%

BC fees 18 14 -20% 3% 17 -17%

Other miscellaneous income 0.2 0.5 155% 0.1% 0.3 90%

Total Revenue 370 409 11% 100% 455 -10%

Financial expenses 134 165 23% 40% 164 0.2%

Personnel expenses 80 105 32% 26% 106 -1%

Operating and other expenses 29 36 22% 9% 34 2%

Depreciation and amortization 3 4 46% 1% 3 20%

Total Operating Cost 112 145 29% 35% 144 0.8%

Provision & Write-offs 14 335 - 82% 4 -

Total Expenditure 260 644 148% 157% 312 106%

Profit before Tax 110 (235) - -57% 143 -

Tax expense 26 16 -39% 4% 29 -47%

MAT Credit Entitlement * - (16) - -50% (29) -47%

Profit after Tax 84 (235) - -57% 143 -

Profit for the period 84 (235) - -57% 143 -

INR Crs.

*Q3 FY17 , Q4FY17- MAT credit entitlement comprises tax expenses of Rs. 29 Crs and Rs. 16 Crs respectively. 63

PROFIT & LOSS STATEMENT (2/4)

64

Particulars Q3FY17 Q4FY17 Variance Comments

Int. on portfolio 346 287 (59)

Below factors lead to fall in interest income on portfolio

1. Yield Reduction (Q4FY17 = 17.6% , Q3FY17 = 19.6%)

(Due to interest reversals on account of NPA,

Higher overdue portfolio and

Securitisation/assignment transactions in Q4FY17)

2. Avg. Daily On B/S portfolio reduction due to securitisation/assignment transactions in

Q4FY17. Q3FY17 = Rs. 7,010 Crs ,Q4FY17 = Rs. 6,594 Crs

3. Lesser number of days interest recognition

92 days in Q3Y17, 90 days in Q4FY17

1. (Rs. 32 Crs)= 2.0%* Rs. 6,594 Crs* 90/365 impact on account of yield reduction

2. (Rs. 20 Crs)=(Rs. 7,010 Crs - Rs. 6,594 Crs)*19.75%*90/365 impact on account of

reduction in on-balance sheet Daily Avg. portfolio

3. (Rs. 7 Crs)= (Rs. 6,594 Crs *19.75%*2/365) impact on account of 92 days interest

recognition in Q3FY17 and 90 days in Q4FY17.

Income from Securitisation 20 24 4 ▪ Primarily driven by net recovery against earlier shortfalls.

Income from Assignment2 18 16 ▪ Incremental revenue on account of 3 Assignment transactions in Q4FY17

Loan Processing fees 34 32 (2)▪ LPF is amortised over the loan tenure

(~42% of Q4FY17 disbursements in Mar’17)

BC Fees 17 14 (3)

▪ Impact of (Rs. 1 Cr )- Daily Avg Managed loans for Q4FY17 decline by 6% (Rs. 704

Crs in Q4FY17 and Rs. 747 Crs in Q3FY17)

▪ Impact of ( Rs. 0.7) Crs - Loss of BC Fees of Rs. 2.4 Crs in Q4FY17 vs Rs. 1.7 Crs

in Q3FY17

Facilitation fees from Cross-sell 10 3 (7) ▪ Facilitated 89,000 units in Q4FY17 vs 2,74,000 units in Q3FY17

Income from Investments 25 30 5▪ Daily Avg. interest yielding assets up by 31%

(Rs. 1,950 Crs in Q4FY17 vs Rs. 1,492 Crs in Q3FY17)

Recovery from write-offs 0.5 0.9

Misc. 0.3 0.5 Note : Figures rounded-off to nearest digit.

Total 455 409 (46)

INR Crs.

65

Particulars Q3FY17 Q4FY17 Variance Comments

Finance costs 164 165 0.3

1.Avg daily borrowings increased QoQ by 3% in Q4FY17 i.e.

Rs 6,153 Crs. vs Rs. 5,974 Crs in Q3FY17.

2.Wt. Avg Cost of borrowings (Incl. Processing fees) has reduced

by 20 bps i.e. 10.6% in Q4FY17 vs 10.8% in Q3FY17.

3.Finance costs recognised for 90 days in Q4FY17 vs 92 days in

Q3FY17.

Total impact = ((1+.03)*(1-0.2%)*90/92 = 1)

Personnel expenses 106 105 (0.7) Employee count flat QoQ.

Other Operating expenses 38 40 2

Write-offs/Loss (A+B+C) 10.1 25.7 15.6

Write-offs -(A) 4.2 0.2 (4.0)

Loss on Securitised Portfolio- (B) 5.6 19.7 14.1 Rs. 19.7 Crs Loss on short collections against securitised portfolio

Loss on Managed Loans- (C) 0.3 5.8 5.5 Rs. 5.8 Crs shortfall settlement against managed Loans

Provisions (D+E+F+G) (6.3) 308.9 315.2

NPA Provisions On B/S Portfolio -(D) (1.1) 240.5 241.6 Please refer slide no : 14

Provisions on Managed Loans -(E) (0.5) 57.9 58.4Rs. 57.9 Crs incremental provisions based on company’s

provisioning policy subject to maximum performance security.

Provisions on Securitised Portfolio – (F) (5.3) 10.0 15.3Rs. 10 Crs incremental provisions on securitised portfolio based on

company’s provisioning policy

Provisions on Standard assets - (G) 0.6 0.5 (0.1)

Total Provisions/Loss/Write-offs 3.8 334.6 330.8

INR Crs.PROFIT & LOSS STATEMENT (3/4)

PROFIT & LOSS STATEMENT FOR FY17 (4/4)

Particulars FY16 FY17 YoY%

FY17

As % of Total

Revenue

Income from Operations

Interest income on Portfolio loans 954 1,228 29% 71%

Excess interest spread on securitization / Assignment 110 172 56% 10%

Loan processing fees 73 124 71% 7%

Other Income

Income on investments 56 85 51% 5%

Recovery against loans written off 15 4 -73% 0.2%

Facilitation fees from Cross-sell 50 43 -14% 2%

BC fees 62 71 15% 4%

Other miscellaneous income 2 1 -18% 0.1%

Total Revenue 1,321 1,728 31% 100%

Financial expenses 485 622 28% 36%

Personnel expenses 292 406 39% 24%

Operating and other expenses 103 134 31% 8%

Depreciation and amortization 8 13 53% 1%

Total Operating Cost 404 553 37% 32%

Provision & Write-offs 39 359 - 21%

Total Expenditure 927 1,535 66% 89%

Profit before Tax 394 193 -51% 11%

Tax expense 91 109 20% 6%

MAT Credit Entitlement * - (206) - -12%

Profit after Tax 303 290 -4% 17%

Profit for the period 303 193 -36% 11%

INR Crs.

*MAT credit is recognized from Q1FY17. MAT credit entitlement comprises tax expenses of Rs. 109 Crs for FY17, Unrecognised MAT credit of Rs. 97 Crs as on 31st March, 2016 66

STRONG CAPITAL BASE AND ROBUST LIQUIDITY DRIVE BFIL BALANCE SHEETParticulars Q4FY16 Q4FY17 YoY% Q3FY17 QoQ%

Equity Share Capital 127 138 8% 138 0%

Stock Options Outstanding 25 34 37% 26 32%

Reserves And Surplus 1,231 2,275 85% 2,508 -9%

Capital & Reserves 1,383 2,447 77% 2,671 -8%

Loan Funds 5,130 7,125 39% 6,295 13%

Payable Towards Assignment/Securitisation 247 204 -17% 136 50%

Expenses & Other Payables 44 29 -34% 28 5%

Provision For Taxation 2 1 -18% 9 -85%

Unamortised Loan Processing Fees 64 76 19% 70 8%

Employee Benefits Payable 24 31 27% 29 5%

Interest Accrued But Not Due On Borrowings 38 37 -1% 49 -25%

Provision For Leave Benefits & Gratuity 21 28 34% 27 5%

Statutory Dues Payable 4 5 37% 6 -10%

Unrealised Gain On Securitisation Transactions 124 41 -67% 49 -17%

Provision For Standard And NPA - Non-AP 74 393 - 84 -

Provision For Standard And NPA - AP 0.1 - - - -

Liabilities 5,771 7,971 38% 6,783 18%

Total Liabilities 7,154 10,418 46% 9,454 10%

Fixed Assets 11 17 49% 17 -2%

Intangible Assets 5 5 2% 6 -9%

Investment 0.2 0.2 - 0.2 -

Cash And Bank Balances (Incl. Security Deposits) 1,942 2,871 48% 2,169 32%

Trade Receivable 6 11 72% 0.3 -

Interest Accrued And Due On Loans 0 4 - 13 -70%

Interest Accrued But Not Due On Loans 10 11 6% 15 -27%

Interest Accrued But Not Due On Deposits With Banks 12 25 107% 26 -2%

Interest Strip On Securitization Transactions 124 41 -67% 49 -17%

Portfolio Loans -- Non-AP 4,806 7,083 47% 6,817 4%

Portfolio Loans -- AP 11 - - 0.1 -

Loans Placed As Collateral 160 92 -42% 75 24%

Security Deposits For Rent And Other Utilities 4 4 -10% 4 -2%

Advances For Loan Cover Insurance 1 1 -3% 1 -12%

Loans To BFIL Employee Benefit Trust 3 2 -22% 2 -

Advance Income Tax 16 16 4% 16 3%

Prepaid expenses 4 6 37% 9 -35%

MAT credit entitlement - 206 - 191 8%

Other Advances / Other Assets 39 22 -42% 45 -51%

Total Assets 7,154 10,418 46% 9,454 10%

Note:1 Non-AP Securitized/Managed/Assigned Portfolio 2,711 1,974 -27% 1,639 20%

2. Non-AP Gross Loan Portfolio 7,677 9,150 19% 8,531 7%

INR Crs.

67

RATIOSParticulars Q4 FY16 Q3 FY17 Q4 FY17

Spread Analysis (as % of Avg. Quarterly Gross Loan Portfolio)

Gross Yield (I) 21.3% 20.7% 18.5%

Portfolio Yield* (a) 18.3% 17.5% 15.5%

Financial Cost (b) 7.7% 7.5% 7.4%

NIM on portfolio (a-b) 10.6% 10.1% 8.1%

Operating Cost (c) 6.5% 6.6% 6.6%

Provision and Write-offs (d) 0.8% 0.2% 15.1%

Taxes# (e) 1.5% 1.3% 0.7%

Total Expense II = (b+c+d+e) 16.5% 15.5% 29.9%

Return on Avg. Gross Loan Portfolio (I) - (II) 4.9% 5.2% -11.3%

Efficiency:

Cost to Income 47.5% 49.5% 59.3%

Asset Quality – Non-AP:

Gross NPA 0.08% 0.06% 6.0%^^

Net NPA 0.04% 0.03% 2.7%

Gross NPA (INR Crs.) 4.1 4.1 428.1^^

Net NPA (INR Crs.) 1.9 1.9 185.3

Leverage:

Debt : Equity 3.7 2.4 2.9

Debt : Equity (Incl. Securitised, Assigned & Managed Loans) 5.9 3.0 3.8

Capital Adequacy: 23.1% 36.2% 33.5%

Profitability:

Return on Quarterly. Avg. Assets (Incl. Securitised, Assigned & Managed Loans) (Excl. MAT Credit)^ 3.9% 4.0% -8.5%

ROE (Quarterly Avg.) (Excl. MAT Credit)^ 25.3% 17.5% -39.2%

Return on Quarterly Avg. Assets (Incl. Securitised, Assigned & Managed Loans) (Incl. MAT Credit)^ 3.9% 5.1% -8.0%

ROE (Quarterly Avg.) (Incl. MAT credit)^ 25.3% 22.0% -36.7%

EPS - Diluted (INR) (Not Annualized) 6.6 10.3 -17.0

Book Value (INR) 108.6 193.7 177.3

*Portfolio Yield = (Int. income on portfolio loans + Excess interest spread on securitization and Asset Assignment + BC Fee ) /Avg. GLP

# Tax calculated excluding MAT credit entitlement of Rs.29 Crs for Q3FY17 and Rs. 16 Crs for Q4FY17

^ Rs. 29 Crs and Rs. 16 Crs MAT Credit for Q3FY17 and Q4FY17 resp.

^^ Rs. 4.3 Crs portfolio has been considered standard assets due to RBI dispensation.68

RATIOSParticulars FY16 FY17

Spread Analysis (as % of Avg. Quarterly Gross Loan Portfolio)

Gross Yield (I) 23.3% 20.1%

Portfolio Yield* (a) 19.9% 17.1%

Financial Cost (b) 8.5% 7.3%

NIM on portfolio (a-b) 11.3% 9.9%

Operating Cost (c) 7.1% 6.5%

Provision and Write-offs (d) 0.7% 4.2%

Taxes# (e) 1.6% 1.3%

Total Expense II = (b+c+d+e) 17.9% 19.2%

Return on Avg. Gross Loan Portfolio (I) - (II) 5.3% 1.0%

Efficiency:

Cost to Income 48.3% 50.0%

Asset Quality – Non-AP:

Gross NPA 0.08% 6.0%^^

Net NPA 0.04% 2.7%

Gross NPA (INR Crs.) 4.1 428.1^^

Net NPA (INR Crs.) 1.9 185.3

Leverage:

Debt : Equity 3.7 2.9

Debt : Equity (Incl. Securitised, Assigned & Managed Loans) 5.9 3.8

Capital Adequacy: 23.1% 33.5%

Profitability:

Return on Quarterly. Avg. Assets (Incl. Securitised, Assigned & Managed Loans) (Excl. MAT Credit)^ 4.2% 0.8%

ROE (Quarterly Avg.) (Excl. MAT Credit)^ 25.1% 3.9%

Return on Quarterly Avg. Assets (Incl. Securitised, Assigned & Managed Loans) (Incl. MAT Credit)^ 4.2% 2.7%

ROE (Quarterly Avg.) (Incl. MAT credit)^ 25.1% 13.6%

EPS - Diluted (INR) 23.6 21.6

Book Value (INR) 108.6 177.3

*Portfolio Yield = (Int. income on portfolio loans + Excess interest spread on securitization and Asset Assignment + BC Fee ) /Avg. GLP

# Tax excluding MAT credit entitlement of Rs.206 Crs for FY17

^MAT credit of Rs. 109 crs for FY17, Rs. 97 crs as on 31st March,2016.

^^ Rs. 4.3 Crs portfolio has been considered standard assets due to RBI dispensation. 69

GUIDANCE FOR FY18

70

INR Crs.

FY17 FY18

Actual Guidance

Incremental debt requirement 7,918 14,500

Non-AP Disbursement 14,667 19,500

Non-AP Gross Loan Portfolio 9,150 13,500

PBT 193 435

PAT (Incl. MAT Credit) 290* 435

* Including Rs. 97 Crs of MAT credit as on 31st March, 2016.

FINANCIAL ARCHITECTURE

71

On Balance Sheet* Q4FY16 Q3FY17 Q4FY17

State Bank Group 13% 10% 9%

Yes Bank 10% 7% 8%

SIDBI 8% 5% 7%

Bank of India 2% 8% 7%

IDBI Bank 7% 6% 7%

Kotak Mahindra Bank 3% 6% 6%

ICICI Bank 5% 6% 6%

Dena Bank 12% 6% 5%

IDFC Bank 8% 7% 5%

Bank of Maharashtra 4% 6% 5%

Standard Chartered Bank 4% 3% 4%

HSBC Bank 3% 3% 4%

RBL Bank 2% 5% 4%

Union Bank of India 1% 4% 4%

HDFC Bank 5% 2% 3%

Mudra 2% 1% 3%

Citi Bank 1% 2% 2%

Andhra Bank 3% 1% 2%

Axis Bank 1% 3% 2%

South Indian Bank 2% 2% 2%

Barclays Bank PLC 2% 2% 2%

Bajaj Finance Limited - 1% 1%

Others 4% 3% 3%

Total 4,440 5,429 6,018

FINANCIAL ARCHITECTURE

Diversified Source MixLenders Mix (On B/S) Devoid Of Dependence Risk

* Includes Term loan and cash credit facilities

Q4FY

16% Mix

Q3FY

17% Mix

Q4FY

17% Mix

Term Loans 4,307 53% 5,378 67% 5,939 64%

Securitisation 1,886 23% 958 12% 823 9%

CP 290 4% 466 6% 707 8%

Managed

Loans708 9% 728 9% 692 7%

Assignment 367 5% 69 1% 628 7%

NCD 400 5% 400 5% 400 4%

CC 133 2% 51 1% 78 1%

Total 8,091 100% 8,051 100% 9,268 100%

Securitised / Assigned Q4FY16 Q4FY17

State Bank Group - 29%

IDBI Bank 22% 20%

Yes Bank 32% 16%

Bank of India 16% 14%

HDFC Bank 8% 9%

Kotak Mahindra Bank 9% 5%

DCB Bank - 3%

ICICI Bank 11% 3%

RBL Bank 2% -

Total 100% 100%

Investor Mix (Off B/S) Broad-based

INR Crs.

72

SUB 9% MARGINAL COST OF BORROWING

* processing fees is amortized for marginal cost calculation.# Excluding Managed Loans, Expenses towards loan processing fees are recognized upfront whereas loan processing fees received from borrowers are

amortized over the period of contract.

Metric FY14 FY15 FY16 Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 FY17

Marginal Cost

of Borrowings

on and off b/s loans

(excluding processing

fees)

12.2% 11.7% 10.1% 9.2% 9.9% 9.4% 9.9% 8.8% 9.4%


(including processing

fees)*

12.6% 11.9% 10.2% 9.3% 10.0% 9.5% 10.0% 8.9% 9.4%

on b/s loans (excluding

processing fees)12.9% 12.3% 11.0% 10.3% 10.4% 9.9% 9.9% 9.2% 9.8%

on b/s loans (including

processing fees)*13.6% 12.6% 11.1% 10.3% 10.5% 10.0% 10.0% 9.3% 9.9%

Daily

Average

Wt. avg. cost

of borrowing#



fees)

12.7% 12.3% 11.4% 10.8% 10.3% 10.3% 10.2% 10.1% 10.2%



fees)

13.6% 13.0% 11.6% 11.0% 10.4% 10.4% 10.4% 10.2% 10.4%


processing fees)13.0% 12.8% 11.7% 11.3% 11.0% 10.8% 10.6% 10.4% 10.7%


processing fees)13.9% 13.5% 12.0% 11.5% 11.2% 11.0% 10.8% 10.6% 10.9%

Monthly

Average

Wt. avg. cost

of borrowing#



fees)

12.2% 11.6% 10.9% 10.4% 10.0% 10.2% 10.0% 9.7% 10.0%



fees)

13.0% 12.2% 11.1% 10.7% 10.1% 10.3% 10.2% 9.9% 10.1%


processing fees and other

charges)

12.8% 12.2% 11.4% 10.9% 10.6% 10.7% 10.4% 10.0% 10.5%


processing fees)13.7% 12.8% 11.6% 11.1% 10.8% 10.8% 10.7% 10.2% 10.7%

Loan Processing Fees (INR Crs.) 17.3 16.9 11.6 2.5 1.7 2.3 3.3 3.1 10.4

Drawdowns (INR Crs.) 3,503 5,020 7,317 3,224 1,096 2,180 1,048 2,576 6,900

Financial Cost^ 8.3% 8.3% 8.5% 7.7% 6.7% 7.2% 7.5% 7.4% 7.3%

Funding Cost Analysis

^ Financial expenses to quarterly Avg. Gross Loan Portfolio.

73

POSITIVE ALM MISMATCH BENEFIT CONTINUES

56%39%

57% 46% 57% 48% 46%

44%61%

43%54%

43% 52% 54%

FY14 FY15 FY16 FY17 Q4FY16 Q3FY17 Q4FY17

Floating Fixed

* Excludes managed loans

ALM data includes Securitized/ Assigned loans

ALM

4.9 5.7 6.2 6.3 6.2 5.8 6.3 6.3

9.2 10.2

9.6 10.2 10.0 9.6

FY14 FY15 FY16 FY17 Q4FY16 Q3FY17 Q4FY17

Avg maturity of assets

Avg maturity of liabilities

No. of months

Interest Rate Mix of Borrowings*

74

EXTERNAL ASSESMENT

75

Rating Instrument Rating/Grading Rating Agency

Rating Amount Limits

(Rs. Crs.)

Q3FY17 Q4FY17

Code of Conduct Assessment C1 ICRA Limited N/A N/A

Corporate Governance Rating CGR2 ICRA Limited N/A N/A

Bank Loan Rating (Long-term facilities) CARE A+ CARE Ratings

5,500 5,500

Bank Loan Rating (Short-term facilities) CARE A1+ CARE Ratings

Long-term Debt (NCD) CARE A+ CARE Ratings 400 400

Short-term Debt (CP/NCD) CARE A1+ CARE Ratings 200 200

Long-term Debt [ICRA] A+ ICRA Limited

750^ 750^

Short-term Debt [ICRA] A1+ ICRA Limited

Securitisation Pool

CARE AA (SO) CARE Ratings 1,839 1,979*

ICRA AAA (SO), AA

+ (SO), AA (SO)#ICRA Limited 1,333 1,333*

^Subject to Long-term borrowings limit of Rs. 300 Crs

*Amount aggregates to 6 transactions rated by CARE Ratings and 4 transactions rated by ICRA

# Two transactions are rated as AA(SO) and the remaining two transactions rated as AA+(SO) and AAA(SO) respectively

RISK MANAGEMENT

76

KEY RISKS AND MANAGEMENT STRATEGIES

Management

Strategy

Key Risks

Risk Management

Political Risk

Responsible lending and fair

pricing

Concentration Risk

Geographic & dependence

norms

Operational Risk

Cash management system and

process controls

Liquidity Risk

Liquidity metrics

o Low cost lender

o Voluntary Cap on

RoA from core

lending

o Robust Customer

grievance redressal

(CGR) Mechanism

with Ombudsman

o Calibrated Growth

o Geographic

concentration

norms

- Disbursement

Related Caps

- Portfolio

Outstanding

Related Caps

o Borrowing

dependence norms

- Cap on borrowing

from any single

credit grantor (15%

of funding

requirement)

o Integrated cash

management system

o Product and process

Design

o ISO Certified Internal

audit

o Well defined metrics

for

- Cash burn

- Business continuity

- Growth

77

CAPITAL STRUCTURE

78

CAPITAL STRUCTURE AS ON 31st MARCH 2017

Excludes no. of Outstanding ESOPs 0.4 Crs.

Note: The Investment under different accounts by a fund are clubbed

under their respective names

SHAREHOLDING PATTERN

38.7%

1.1%

1.1%

1.1%

1.1%

1.1%

1.2%

1.2%

1.3%

1.3%

1.3%

1.4%

1.5%

1.6%

1.7%

1.7%

1.7%

1.7%

1.8%

2.1%

2.1%

2.2%

2.2%

2.2%

2.6%

2.8%

2.8%

3.4%

3.6%

3.9%

6.7%

Others

CIMB Bank Berhad

SIDBI

Matthews Asia

Citigroup Global Markets Mauritius Pvt. Ltd.

ICICI Prudential Mutual Fund

Morgan Stanley SG PTE

Societe Generale

Birla Sun Life Mutual Fund

Macquarie Emerging Markets Asia Trading…

Swiss Finance Corporation (Mauritus) Ltd.

Kismet SKS II

BNP Paribas Arbitrage

OHM Stock Broker Pvt Ltd.

Kismet Microfinance

Alliancebernstein

Sandstone

Goldman Sachs Asset Management

Credit Suisse Singapore

Goldman Sachs P Note

Vinod Khosla

Vanguard

IDFC Mutual Fund

Wellington

Matthews India

Tree Line

William Blair

East Bridge Capital

Morgan Stanley Investment Management

Amansa Capital PTE Limited

Morgan Stanley Mauritius

No. of shares -13.8 Crs.

FII, 24.3%

Domestic MFs,

Insurance co's & FIs ,

12.5%

Foreign Corporates,

5.8%

FPI, 40.7%

Domestic Individuals,

9.3%

NRI, 3.5%

Domestic Corporates,

3.9%

79

ADJUSTED PRICE TO BOOK COMPUTATION

80

Mar-17

Book value per share (A) 177

Present value of DTA per share (B)^ 19

Book value per share – Including PV of DTA (A+B) 196

Adjusted Price to Book Ratio (times) 4.1

Note:

^ Estimated Present Value of Deferred Tax Assets(DTA).

DTA as on Mar 31, 2017 is Rs. 281 Crs.

Discount rate assumed at 10.2% and applied over next 2 years’ estimated profit.

BFIL Market Price as of Apr 28, 2017 – Rs. 804

INR

ANNEXURES

81

ANNEXURES - OPERATIONS

82

GROUP UNDERWRITING AT WORK

53%45%

31%35% 33%

43% 43%40% 40%

21%

37%34%

34%

31% 30%33%

36%17%

15% 12% 11%12%

10% 11% 11%10%

IGL - 2 IGL - 3 IGL - 4 IGL - 5 IGL - 6 IGL - 7 IGL - 8 IGL - 9 IGL - 10

Conversion from IGL to IGL Conversion from IGL to LTL Conversion from IGL to MTL

LOAN CONVERSION TO NEXT CYCLE

70%

81% 81%79%

84% 84% 84% 87%81%

Active IGL loans disbursed during Jul’15 to Sep’15 have been considered as base and loans disbursed in subsequent cycles over the next 1.5 yrs i.e. till Mar’17 have been taken and cycle wise conversion has been arrived. Only the next first loan taken by customer is taken into consideration for conversion. 83

JLG MODEL ENSURES EFFECTIVE CONTROL ON AVERAGE INDIVIDUAL EXPOSURE, IRRESPECTIVE OF ACTUAL LOAN ELIGIBILITY

20,010

29,565 29,565 29,565 29,565 29,565 29,565 29,565 29,565 29,565

38,635

49,785 49,785

19,382

25,790 24,939 24,013 23,798 23,861 22,987 22,956 23,277 23,595

36,905

41,791 41,619

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

Cycle 1 Cycle 2 Cycle 3 Cycle 4 Cycle 5 Cycle 6 Cycle 7 Cycle 8 Cycle 9 Cycle 10 Cycle 1 Cycle 2 Cycle 3

Income Generating Loan

Eligibility Amount (INR) Avg. Offtake Long Term Loan

Q4F

Y17

12,000

24,000

36,000

42,000

50,000 50,000 50,000 50,000 50,000 50,000

10,200

15,120 16,920 18,060 18,500 19,000 19,500 21,000 22,000 21,000

Cycle 1 Cycle 2 Cycle 3 Cycle 4 Cycle 5 Cycle 6 Cycle 7 Cycle 8 Cycle 9 Cycle 10

^ Note: Maximum Offtake eligibility for IGL (1 year Tenure) : June-11 to Dec’15 – Rs. 15,000; Post Dec’15 – IGL 1 Rs.20,000 , IGL 2 Rs.30,000

Q2

FY

11

(P

RE

-CR

ISIS

)

^

^

84

CYCLE WISE NON-AP LOAN BORROWERS

Cycle Wise Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17

IGL 1 42% 44% 45% 43% 38%

IGL 2 14% 15% 15% 15% 19%

IGL 3 5% 6% 6% 6% 6%

IGL 4 1% 1% 1% 1% 2%

IGL 5 1% 1% 1% 0.5% 1%

IGL 6 3% 2% 2% 1% 1%

IGL 7 2% 2% 2% 1% 1%

IGL 8 1% 1% 1% 1% 1%

IGL 9 0.3% 0.2% 0.3% 0.3% 0%

Total IGL Borrowers 69% 71% 72% 70% 68%

LTL 1 22% 22% 20% 20% 20%

LTL 2 0.2% 0.4% 0.7% 1% 2%

Total LTL Borrowers 22% 22% 21% 21% 22%

MTL 1 5% 4% 4% 6% 6%

MTL 2 2% 2% 2% 2% 2%

MTL 3 1% 0.4% 0.4% 0.6% 0.7%

MTL 4 0% 0.2% 0.2% 0.3% 0.4%

MTL 5 0.2% 0.1% 0.1% 0.2% 0.2%

MTL 6 0.1% 0.1% 0.1% 0.1% 0.1%

Total MTL Borrowers 8% 7% 7% 9% 10%

Cross Sell 0.3% 0.3% 0.2% 0.3% 0.2%

Total IGL + LTL + MTL

+ Cross Sell100% 100% 100% 100% 100%

Note:

▪ Customers having IGL & MTL loans, have been grouped under respective IGL loan cycle

▪ Customers having LTL & MTL loans, have been grouped under respective LTL loan cycle

▪ MTL clients represents borrowers with only MTL loans

▪ Cross-sell clients represents borrowers with only cross-sell loans85

DIFFERENCES IN LENDING MODEL BETWEEN SHG & JLG

SHG JLG (BFIL)

ModelSavings led (Members collectively save

money for 6 months to avail credit)

Credit led (No savings required, members have

an access to the finance as per the requirement)

Borrowers Segment Women/Men Women

Lending Methodology Group (Size 10-20 members) Group (5 members)

Loan Processing time 4 Months 1 week

Repayment frequency Monthly Weekly

Credit DecisionGroup leader decides the quantum of

loan for the member

Entire group and the center decides the quantum

of loan

Credit Bureaus Reporting

Not much information available (RBI

mandated the SHGs to share data from

July 2016)

Weekly sharing of the data with CICs

Top 5 States % Mix in Portfolio (Mar-16) Portfolio O/S (Mar-16) INR Crs.

Andhra Pradesh 30% 17,221

Telangana 17% 9,863

Karnataka 13% 7,475

Tamil Nadu 11% 6,359

West Bengal 7% 3,779

Others 22% 12,422

Total 100% 57,119

SHG Concentration:

Source: NABARD86

IGL MTL LTL

Other product

offerings^^

Loan portfolio (INR

Crs) / (% Mix)4,059 (44%) 3,113 (34%) 1,945 (21%) 32 (0.4%)#

Ticket size rangeINR 7,050 to

INR 29,565

INR 7,500 to

INR 25,421^

INR 30,915 to

INR 49,785

INR 1,310 to

INR 5,001

Avg. Ticket Size (INR)

For Q4FY1723,416 20,976 38,491 2,147

Eligibility*

▪ Completion of CGT /

GRT

▪ Age limit 18 years to

58 years

▪ Maximum limit of

INR. 20,010 for

IGL 1

▪ With IGL - Between

19th to 44th week

▪ With LTL – Between

19th to 94th week

▪ Maximum limit of

INR. 21,184 for MTL1

▪ Minimum Two IGL

Loan cycle completed

▪ Maximum limit of INR.

38,635 for

LTL 1

▪ With IGL – Between

4th to 44th week

▪ With LTL – Between

4th to 94th week

▪ With MTL – Between

4th to 71st week

Tenure 50 weeks 75 weeks^ 104 weeks 25 weeks

Annual effective

interest rate

19.75%

(w.e.f 7th Dec’15 for new loans) ▪ 19.60% - 19.70%

Processing fee (Incl.

Service Tax)1.15% ▪ 0.94% -1.14%

* Eligibility criteria over and above the criteria prescribed by the RBI

^^Loans for Mobile Phones, Solar lamps, Sewing Machines, Bicycle , Bio-Mass Stove, Water-purifier(Excluding Two wheeler loans pilot).# Portfolio Including Two wheeler loans pilot of Rs.0.51 Crs .

^w.e.f Aug, 2016 Tenure has been changed from 50 weeks to 75 weeks and ticket sizes are changed.

PRODUCT OFFERINGS

87

PRODUCT WISE - DISBURSEMENT, PORTFOLIO OUTSTANDING AND TICKET SIZE

88

IGL LTL MTL Others* Total

Q4FY16

No. of Loans Disbursed in '000 1,201 168 553 463 2,386

% Mix 50% 7% 23% 19% 100%

Amount of Loan Disbursed (In Crs.) 2,516 619 818 112 4,066

% Mix 62% 15% 20% 3% 100%

Portfolio Outstanding (In Crs.) 3,713 2,259 1,593 122 7,688

% Mix 48% 29% 21% 2% 100%

Avg. Ticket Size INR 20,951 36,812 14,783 2,422 17,041

Q3FY17

No. of Loans Disbursed in '000 692 69 547 275 1,583

% Mix 44% 4% 35% 17% 100%

Amount of Loan Disbursed (In Crs.) 1,519 264 1,133 64 2,981

% Mix 51% 9% 38% 2% 100%


% Mix 48% 24% 28% 1% 100%


Q4FY17

No. of Loans Disbursed in '000 824 103 742 89 1,758

% Mix 47% 6% 42% 5% 100%

Amount of Loan Disbursed (In Crs.) 1,930 397 1,556 19 3,902

% Mix 49% 10% 40% 0.5% 100%


% Mix 44% 21% 34% 0.4% 100%


*Cross sell products

LEVERAGING THE DISTRIBUTION STRENGTH

FY15 FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 FY17

Total Total Total Total TotalMobile

phone

Solar

lamp

Sewing

MachineCycle Total

Mobile

phone

Solar

lamp

Sewing

MachineCycle Others^ Total

No. of Units

Facilitated (in

Lacs)

8.4 15.6 4.2 3.8 2.7 0.2 0.7 0.05 - 0.9 4.0 6.2 0.7 0.6 0.1 11.6

Gross Fees (after

service tax) INR

Crs.

28.3 49.7 14.8 14.3 10.3 0.5 2.6 0.1 - 3.3 14.5 23.6 2.3 1.9 0.3 42.7

Less: Incentives

INR Crs.4.6 13.8 3.6 3.4 2.6 - - - - - 3.3 5.1 0.6 0.5 0.1 9.6

Net Fees INR

Crs.*23.7 28.3 8.8 8.6 6.0 0.4 2.0 0.1 - 2.6 8.9 14.6 1.3 1.1 0.2 26.0

Loan Portfolio

INR Crs.58.3 101.9 112.8

99.171.0 8.5 18.4 3.8 1.1 32.4 8.5 18.4 3.8 1.1 0.6 32.4

Net Fee Income

as % of PAT**12.6% 9.3% 6.3% 5.9% 4.2%

-

0.2%

-

0.8%

-

0.04%-

-

1.0%4.6% 7.6% 0.7% 0.6% 0.1% 13.5%

Loan Portfolio Mix 1.4% 1.3% 1.3% 1.1% 0.8% 0.1% 0.2% 0.04% 0.01% 0.4% 0.1% 0.2% 0.04% 0.01% 0.01% 0.4%

*Net fee post the incentive payout and sans transfer pricing of other operating cost and Post MAT adjustment

^Loans for Bio-Mass Stove, Water-purifier etc.

** Q1FY17- Profit for the period before MAT credit entitlement of Rs.97 Crs as on 31st March,2016, Q2FY17, Q3FY17 and Q4FY17,FY17 - Profit for the period

Cumulative Cross-sell Penetration % among our existing Non-AP Member base of 6.7 mn for last 4 years is 37%

Frequency of

Loans (for the

period)

FY14 FY15 FY16 FY17Cumulative

past 4 years

#1 2.6% 8.8% 15.9% 15.6% 27.5%

#2 0.1% 0.8% 2.2% 0.8% 6.9%

#3 - 0.01% 0.2% 0.02% 2.1%

#4 - - 0.02% - 0.6%

#5 - - - - 0.2%

Total 2.7% 9.6% 18.3% 16.4% 37.4%

Penetration Based On Total No. Of Loans Frequency of Loans Based On Current Member Base

FY14 FY15 FY16 FY17Cumulative past

4 years

Mobile Phone 1.8% 6.6% 10.6% 5.8% 24.8%

Solar Lamp 1.1% 5.8% 7.9% 9.1% 23.9%

Sewing Machine - 0.2% 1.9% 1.1% 3.2%

Bicycle - 0.0% 1.6% 1.0% 2.6%

Bio-mass stove - 0.2% 0.7% 0.05% 1.0%

Water Purifier - 0.0% 0.5% 0.1% 0.6%

Others - - - 0.02% 0.02%

Total 2.9% 12.8% 23.1% 17.2% 56.0%

89

CREDIT BUREAU DATA

15%

23%25% 25% 26% 25%

FY-15 FY-16 Q1-FY17 Q2-FY17 Q3-FY17 Q4-FY17

Major Initiatives Impacting Credit Bureau Decision:

▪ 99.7% of credit enquiry with Aadhaar as primary KYC (Mar’17).

▪ Internal CAP of Rs. 60,000 for total indebtness of the borrower for JLG loans, including loans from other MFIs.

29%

38%

47%

41% 41%

29%


Rejection rate for Long Term loansRejection rate for All Products

87%

83%85%

86%87%

97%


FY-15 FY-16

Hit rate^ for all products ^ Hit rate = % of

loan applications

with matching

record in credit

bureau

Rejection Reasons – Q4FY17 % Mix

*Note: Rejections are

done based on data

inputs from Credit

bureau

90

Reasons All

ProductsLTL

Loans from=>2MFIs 54% 53%

=>2MFIs and Default History 13% 9%

=>2MFIs and Outstanding Balance

>60K11% 12%

Default History 9% 6%

Outstanding Balance>60K 6% 11%

Eligibility< Min Ticket Size 4% 6%

=>2MFIs,Outstanding Balance>60K

and Default History3% 2%

Default History and Outstanding

Balance >60K0.4% 0.4%

Total 100% 100%

BFIL FINANCIAL INCLUSION COVERAGE…

Doorstep Service Financial literacy Dedicated customer service

Doorstep delivery (i.e. at Center

meetings)

2 day process consisting of hour-long

sessions designed to educate clients

on BFIL processes and credit

discipline.

Toll-free helpline number with seven

different vernacular languages

Strong reach in under-banked areas Weaker & Minority section coverage

68% of BFIL branches are in RBI

under-banked district list

BFIL covers 68% of below average &

low financial districts identified by

CRISIL

20096 175

SKS 296 districts RBI 375 districts*

68%

68% of SKS branches are in RBI under-banked districts list SKS covers 68% of below average & low financial inclusion districts identified by Crisil

CRISIL level of financial inclusion

SKS Coverage of thosedistricts

High 18%

Above average 15%

Below average 51%

Low 16%

Grand Total 100%

68%

Weaker & Minority section coverage

16%

71%

100%

Minority

Economically Weakersection

Women

…. IS SUPPORTED BY ROBUST CUSTOMER CENTRIC PRACTISES

* Source: RBI under-banked districts data

[1] Source: CRISIL Inclusix: An index to measure India’s progress on Financial Inclusion, June 2013

91

WHAT ARE CLIENTS DOING POST THE ANDHRA PRADESH MFI CRISIS?

Interest rates charged by informal sources (in the

absence of MFIs)

Willingness to repay

Data relates to Andhra Pradesh & Telangana

Source: “What are Clients doing post the Andhra Pradesh MFI Crisis?”, MicroSave, 2011

59%

37%

22%

12%

29%

0%

10%

20%

30%

40%

50%

60%

70%

Money Lender SHG Pawn Broker Bank DFC

Sources of Credit (in the absence of MFI Loans) Reasons for not repaying MFI loans

92

ANNEXURES - FINANCIALS

93

CASH AND CASH EQUIVALENT BALANCES

INR Crs.

Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17

Interest Yielding^ 860 255 581 427 568 464 1,150 1,606

Non Interest

Yielding^^176 184 208 254 240 280 278 335

Total 1,036 439 789 681 808 744 1,428 1,941

^fixed deposits, excluding margin money deposits.

^^Includes current account and cash balances

Note: Daily Average figures

94

ANNEXURES - TECHNOLOGY

95

Initiatives SolutionTechnology Partner Benefits

New Lending

Management Software

TABLETS’ - Hand held

device for field staff

Migrated from on-

premises email system

to hosted exchange

Data Centre– Migration

to Cloud

Network protection

ERP Implementation

In-House Team SKS SMART

Enterprise Mobility

Office 365

Data Centre Hosting

Enterprise Web and

Network Security

ERP

▪ Enhances Productivity of SMs- Reduced time

spent at both center meeting and back office

▪ Paper less transaction - Pre-printed loan

application form.

▪ Enhanced email security, 99.99% uptime, On

mobile office 365 access.

▪ Additional products such as One-Drive,

Enterprise Skype etc. for easy access of data

and better communication.

▪ On-demand capacity scale-up.

▪ Business Continuity Plan.

▪ Improved performance and reliability of network

infrastructure and applications.

▪ A robust framework that encompasses

workflow/reporting and analytic engines

▪ Works in online/offline mode to mitigate

connectivity challenges.

▪ ERP - Automation of financial accounting/

investment management, procurement and

payment process.

TECH ADVANCEMENTS DRIVEN BY INDUSTRY LEADING PARTNERSHIPS

96

ANNEXURES – HR

97

Avg. Vintage (Yrs.)

Senior Management 8.3

Middle Management 8.8

Branch Management* 7.3

Sangam Managers 2.5 (3.8^)

Vintage of SMs Exited %Mix

< 6 Months 56%

6 Months - 1 Yr. 20%

1 -2 Yrs. 14%

2- 3 Yrs. 3%

> 3 Yrs. 7%

Who?

When?

Sangam

Manager

Attrition %

Why?

Retention

Strategy

▪ 33% (Annualised) for FY17

▪ Sangam managers who earn lesser

average monthly performance incentive

i.e. ~Rs. 3,600 vis-à-vis ~Rs. 7,000 for

other Sangam Managers .

▪ ~56% of staff who leave the job, decides

to leave within 6 Months from joining

date.

▪ Work conditions such as :

− Average distance travelled per day is

~30 kms.

− Work location is different from home

location

− Branch Reporting time at 6:30 AM

▪ 2ND Best paying job (~Rs.15,000 pm) in

the local milieu (1st – Govt. Job)

▪ High growth career path – No lateral

recruitments till 4 levels above loan

officer.

ATTRITION RATE AT SANGAM MANAGER LEVEL IS LARGELY CONTRIBUTED BY NEW JOINEES. EXCLUDING NEW JOINEES, THE AVG. VINTAGE IS 4.3 YEARS

* Includes Promoted Sangam Mangers

^ Avg Vintage of Sangam Managers

(Excl. who joined in last one year i.e.

57% of Sangam Managers) is 3.8 Yrs.

98

ANNEXURES - COMPLIANCE

99

COMPLIANCE WITH RBI NBFC-MFI REGULATORY FRAMEWORK (1/2)

RBI norms for NBFC-MFIs BFIL compliance

NBFC–MFIs

▪ Qualifying assets to constitute not less than 85% of its

total assets (excluding cash and bank balances)

▪ At least 50% of loans for income generation activities

▪ Qualifying assets - 95%

▪ Income generation loans 99.6%

Pricing Guidelines

Income of

Borrower’s Family

▪ Rural : <=Rs.100,000

▪ Non-Rural : <=Rs. 1,60,000 ✓

Ticket Size▪ <= 60,000 – 1st cycle

▪ <= Rs.100,000 – Subsequent cycle ✓

Indebtedness▪ <= Rs. 100,000

✓<= Rs. 60,000

Tenure▪ If loan amt. > Rs.30,000, then >= 24 months

✓

Collateral▪ Without collateral

✓

Repayment Model▪ Weekly, Fortnightly and Monthly

✓100

COMPLIANCE WITH RBI NBFC-MFI REGULATORY FRAMEWORK (2/2)

RBI norms for NBFC-MFIs BFIL compliance

Pricing Guidelines

Interest Rate^

▪ A. Margin cap – 10% above cost of borrowings

▪ B. Avg. base rate of top 5 commercial banks X 2.75

▪ Lower of the A and B.✓

Margin: 8.2% for FY17

Interest rate 19.75% w.e.f

7th December’15 for new

loans

Processing Fees▪ <= 1% of loan amt.

✓

Insurance

Premium

▪ Actual cost of insurance can be recovered from

borrower and spouse

▪ Administrative charges can be recovered as per IRDA

guidelines

✓

Penalty▪ No penalty for delayed payment

✓

Security Deposit

▪ No security deposit/ margin to be taken

✓BFIL has never taken

security deposit/ margin

101^ W.E.F April 1, 2017 - Quarterly Margin Cap will be followed- Average interest rate on loans sanctioned during a quarter shouldn’t exceed the

Avg borrowing cost during the preceding quarter plus margin cap.

BFIL does not levy any

administrative charges.

Note:

* Banks are also directed to ensure overall direct lending to non-corporate farmers does not fall below the system wide average of last

three years achievement, which is notified as 11.70% as per RBI notification dated 1st September 2016. They should also continue to

maintain all efforts to reach the level of 13.5% direct lending to beneficiaries..

Refer Slide no.42 for details on purpose wise loan portfolio outstanding.

RBI BFIL

S.no. Sector Category Target for Banks %Qualifying

Portfolio of BFIL %Explanation

1

Agriculture Target 18%

47% Livestock, Agri & Allied- Direct Agriculture* Sub-target ~13.5%*

- Direct Small &

Marginal farmers*Sub-target

7% (Mar’16)

8% (Mar’17)

2 Weaker Target 10% 100%

100% Loans are to women

beneficiaries (with less than

Rs.1 lac).

Further, Minority communities

constitute 16% and

economically weaker sections

71% of loan portfolio.

3 Micro-enterprises Target7% (Mar’16)

100%Loans to MFIs for on-lending to

microenterprises. 7.5% (Mar’17)

BFIL LOAN PORTFOLIO QUALIFIES FOR OVERALL PSL TARGET OF 40% AND ALL SUB-TARGETS UNDER NEW PSL NORMS

102

ANNEXURES – INTERNAL AUDIT

103

INTERNAL AUDIT PLAYS A CRITICAL ROLE IN ASSESSING PROCESS CONTROLS

Note:

* Approximately 30% of the clients are covered by Internal Audit in an year during the branch audits. Clients visited on a sample basis to check for

Loan confirmations, Loan utilization (LUC) , arrears and awareness on Client Protection Principles (CPP)

^ Fixed Assets are verified on Annual basis

• 211 strong headcount

• ISO 9001:2008 certified process

• All branches are inspected monthly based on a 4 tier grading system

• Grading linked to incentives/appraisals of field staff

• Head Office audit by KPMG

Strength

• Branches 1,399

• Branches per Internal Audit staff 7

• Regional Offices 28Scope

Scope of Audit

Audit area Frequency

Client

Acqui

sition

Center

Meeting

Proces

s

Document

verification

(KYC, Loan

utilization check

etc.)

Monitoring

process by

supervisor

s

Adheren

ce to

Process

/

Policies

Statutory

Requirement

s

(Credit

bureau, Fair

practices

etc.)

Client

Visits

*

High

Risk

items

(Fraud

s etc.)

Fixed

Assets

verific

ation^

IGL Branches Monthly √ √ √ √ √ √ √ √ √

Regional

Offices

Once in a

quarter,

distributed

monthly

- - - - √ √ - √ √

Head office Quarterly - - - - √ √ - - √

104

For any investor relations queries, please email to [email protected]

THANK YOU

105

earnings update q4fy17 - bfil.co.in up… · earnings update q4fy17 bharat financial inclusion...

Documents