equitas microfinance
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EQUITAS MICRO FINANCE INDIA P LTD
Equitas… the story so far…
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Version 1 Presentation by Murali
First Assignment given to me…
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To develop an unique culture for the Organization.
I jotted down few points on a piece of paper
We debated and finally agreed on “Trustworthiness”
Equitas – a Latin word – translates as equitable which is being “fair and transparent”.
These words were incorporated into our mission statement.
Our mission statement not only focuses on right results but also on right reasons (our intent) and the right way (our culture)
Equitas Micro Finance India P Ltd
Mission of Equitas…
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(1)To improve quality of life (2)by increasing total
household asset value (3)of those who are not
effectively serviced by the formal financial sector (4)by
providing transparent and trustworthy access (5)to
financial and other relevant products and services
(6)by deploying cutting edge technology (7)and forming
partnerships and alliances
Equitas Micro Finance India P Ltd
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Not effectively
serviced by formal
financial sector
Increase total
household assets
value
Improve
Quality of Life
Transparent and Trustworthy access
Financial & other relevant products & services
Cutting edge technology
Partnership alliances
Mission of Equitas…
Responsible Microfinance – The Equitas Model
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Responsible Microfinance
Fairness & Transparency
Governance
Efficient Operations &
Risk Management
Pricing philosophy
Employee engagement
Fairness & Transparency
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• Clear communication
of all-inclusive
reducing balance IRR
interest rate
• Admin fee for term
life insurance cover
published in passbook
Governance
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Reputed board of directors
• Independent directors constitute 1/3rd of the board
• Strong governance processes
• Clause 49 of Listed companies being followed
• Corporate Governance Rating of 3 from CRISIL – 8th Corporate
Clear articulation of mission focus & product philosophy
• Minimum 25% scale ratio
• All services consumed by members to be provided on not-for-profit basis
• No credit for purchase of consumer durables
Voluntary caps on RoE & Executive Pay
• RoE capped at 25% (authored by Equitas); benchmarked against Government Banks
• Min-Max Staff pay ratio capped at 1:40
Efficient Operations & Risk Management
Centralized back-office
Real-time collections monitoring
Pre-printed repayment
stickers
Automated forms
processing
Risk Management
Consistently good quality
service
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Operations Philosophy
At Branches, client-facing activities only will be conducted by field
staff. All other activities will either be outsourced or centralized
No reports required from branches, if they can be generated by HO
Pricing philosophy
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Lending rate
linked to RoE
High Efficiency
Lowest lending
rate
Lending rate to be calculated based on steady-state operating cost; instead
of current operating cost
The cost of expansion to be borne by investors, rather than initial
customers
Even at the time of its launch in 2007, Equitas charged all-inclusive
reducing balance interest rate of 25.5% based on a steady-state target op-
ex of 7.5% rather than Equitas‟ then op-ex of 21%
Right from launch till date, Equitas‟ interest rate continues to be the
lowest among MFIs in India
Equitas – Taking Responsible Microfinance to the next level
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MFI
Responsible MFI
Equitas – Responsible MFI + Ecosystem of services
The Equitas Ecosystem
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Improving quality of members‟ lives
Skill development
•Over 100,000 trained so far
Food Security
•19 Stores running
•6% cost benefit to clients
School education
•49 Tuition Centres
•Two Schools
Healthcare
•Over quarter million families benefited
Financial commitments
5% of profits to EDIT
15% of networth for
purchase of land &
construction of building
for Gurukul
Rs 2000 per month
per branch & 1 CSR rep
for 10 branches for
health-camps
MISSION – TEAM HR
Acquire, align, assess and retain ‘Trustworthy’
employees.
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What do we mean by Trustworthy Employees?
(Personal and Organizational)
Character
Integrity
Integrated – no gap between
intent and behavior
Maturity
Balance between courage and
consideration
Abundance Mentality
Belief that there is “enough
for everyone
Competence
Technical
Knowledge and skill to achieve
the agree-upon results
Conceptual
Ability to see the big picture, to
examine the assumptions and
shift perspectives
Interdependent
Ability to interact effectively
with others – listen,
communicate, get to third
alternatives, create win-win
agreements, and work towards
synergistic solutions
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Society
Lenders
Regulators
Investors
Supervisor
Customers
Trustworthy
Employees
Why do we develop „Trustworthy‟ Employees?
Loyalty
Referrals
Confidence
Productivity
Confidence
Valuation
Confidence
Lesser controls
Confidence
Rates
Goodwill
Support
Engagement
Performance
Management
System
Training
Recruitment
Trustworthy
Employees
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How do we develop „Trustworthy‟ Employees? Acquire
Align
Assess
Retain
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On Recruitment…
80% of staff come through employee referral.
Employee referral scheme has been fine-tuned to encourage quality
references.
Two levels and the HR have to clear the candidate.
Candidates are sent for field visit to help them get right perspective
about the organization and their role.
“Know Your Candidate‟s Family Well” process to improve alignment:
To understand the cultural aspects of the family.
To help family get the right perspective about the organization
and the role their family member is going to perform.
To reach out to the family in emergency situations.
Reference checks done for 100% of candidates prior to offer.
Voluntary “No poach policy” in place.
Candidates posted very close to their residence.
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On Training…
Focus is on “Unity & Uniformity” across all regions.
2 weeks centralized induction program for all field staff at
Regional Training Centers:
2 days Induction (common for all staff).
1 day preliminary field visit to understand the field process.
2 days of intense process training – what, why & how.
3 days of role-related field visits
2 days of certification process.
New Region Start-up Process:
Leadership team put through 2 weeks of intense training.
Additional training on recruitment, infrastructure creation
and statutory compliance.
Ongoing training
Back to Basics
Behavioral aspects
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On Performance Management System…
Role Descriptions & candidate profiles are in place.
Win: win agreements…
Desired results – measurable goals
Guidelines – process adherence & cultural adherence
Resources – physical, financial, people, organizational.
Accountability – frequency of review & with whom.
Consequences – rewards, recognition, etc.
Performance Review done twice a year.
Normalization done area-wise & role-wise.
Transparent method of computing Performance increments and
promotion increments.
Revision letters rolled out on 1st April 2011.
Career Enhancement Policy
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On Employee Engagement…
Guiding principle… “Treat your employees the way you want them to treat
your best customers”
We strive to improve “Quality of Life” of our employees…
“Quality of life” may be enhanced by addressing 4 key aspects of the
“Whole” person:
Physical – need to maintain a certain standard of living.
Mental – need to learn and grow.
Emotional – need to be loved, cared and recognized.
Spiritual – need to do meaningful work and contribute.
All our people practices are centered around these key aspects.
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On Employee Engagement…
People Practices Physical Mental Emotional Spiritual
Sessions to connect with Mission
Health Insurance cover for Total family
Personal Accident cover for self
Two-wheeler Loan
Emergency Loan
Festival Loan
Financial assistance for higher
education
Employee friendly Leave Policy
Buffer positions
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On Employee Engagement…
People Practices Physical Mental Emotional Spiritual
Succession Plan
Career Enhancement Program
Employee satisfaction surveys
Open House Sessions
Branch Award Scheme
Spot Recognition Scheme
Equitas Day out
Employee Stock Option Scheme
Monthly Communication meetings
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On Employee Engagement…
People Practices Physical Mental Emotional Spiritual
Regular Audio Conferences
Monthly Hotline with Group President
A day in the life of… program
Snack Allowance for field staff
Ecosystem access to all employees
Birthday celebrations
Wedding Anniversary celebrations
Grievance Redress System
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Thank you!!!