WELCOME

spandana sphoorty financial limited

What is Microfinance

• “Microfinance is the provision of financial services to low-income clients or solidarity lending groups including consumers and the self-employed, who traditionally lack access to banking and related services.”

Features of Microfinance:• Borrowers are from the low income group• Loans are of small amount – micro loans• Short duration loans• Loans are offered without collaterals• High frequency of repayment• Loans are generally taken for income

generation purpose

NAME MEANING• Spandana stands for

‘responsiveness’. Spandana started as a response to a need and an opportunity

• Sphoorty stands for ‘inspiration’ – this exemplifies the growth of Spandana in provision of larger bouquet of financial services to larger client base.

SPANDANA VALUESTRICS exemplifies our core values - • Transparency - Maintaining simplicity and clarity in

all activities and operations, so that high standards of fairness can be established in all the dealings.

• Responsiveness-Constantly working to identify the changing needs of clients and potential clients, and developing suitable products and services to address these needs thus keeping Spandana ahead of its competitors.

• Integrity -Maintaining high standards of conduct, truthfulness and honesty in all dealings, in order to honour the commitment made to our clients and organisation.

• Commitment -Performing all activities and tasks with professionalism and enthusiasm in order to give the highest level of client satisfaction and optimal efficiency.

• Team Spirit-Working together as to create synergy that results in exponential growth.

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SPANDANA HISTORY1997, Guntur Town, Andhra Pradesh, India. During a hot summer afternoon, when most of the women would prefer a siesta, Mrs. Padmaja Reddy saw a rag-picker woman on the street buying household reject items on a push cart. Her entrepreneurship made her curious.

Speaking to her, Mrs. Padmaja Reddy realized that the lady was working very hard but not getting commensurate returns. Despite her efforts, she was able to provide only one meal to her family. This was mainly because the lady was paying an exploitative daily rent for the cart that cumulatively far exceeded the cost of buying scores of such carts. The lack of access to affordable and serviceable capital was leaving little alternative options for her. While a bank would never provide credit to her on many accounts, the money-lender was far too exploitative.

Mrs. Padmaja Reddy decided to lend her a little money, enough to buy the cart. The money was given with a promise of timely and reasonable repayments. The hard working woman started using her new self-owned push cart, she could save on the rent cost and repaid the money conveniently from her increased returns. Now this women could afford better meals for herself and her children. She also spread the word that there was an organization which was helping economically active women with loans. It seemed to strike the right chord with several low-income people, and soon there were many waiting to get such loans at the doorstep.

Missionwe want to be one of the top 2 global Micro

finance Organization by 2012, offering a range of financial and non financial products and services to low income households and individuals to improve the quality of life. we

constantly Endeavour's to deliver quality services to our customers and remunerative

returns to our investors by maintaining highest levels of transparency and integrity. We strive to be the most preferred employer

in the industry."

Mission specifies • Women • Clients living in rural areas • Clients living in urban areas

Development Goals• Increased access to financial services • Poverty reduction • Employment generation • Growth of existing businesses • Development of start-up enterprises • Gender equality and women's empowerment • Improvement of adult education • Health improvement • Children's schooling • Housing • Youth opportunities

Poverty Target• Very poor clients • Poor clients • Low income clients

Range of Products and Services• Financial products and services credit products offered:• Microcredit loans for microenterprises • Microcredit for household needs/consumption • Loans for agriculture • Loans for education

Voluntary Insurance product offered• Voluntary credit life insurance

Lending Banks

Equity FundsInsurance

Companies

branch

Credit Assistant

Spandana

Deploy in the household cash-flows

Repayment

Loan Repayment

Survey a Village

Service at doorstep

Capital/ Debt

Repayment

Partnerships

Borrowers

Formation and training of groups

Invest in Productive

Assets

Village Selection

Group Formation (8-10 Clients) and

Training

Center Formation

Financial Services at the Door Steps

BUSINESS MODEL

INDIAN MFI UNIVERSE comprises of very few large MFIs but large number

of small players

Large size MFIs(AUM > Rs.500 cr)

Medium size MFIs (AUM Rs.100 to 200

cr)

mF as a segment of overall business

Not-for Profit MFIs

Startups/ Small regional players

1

2

3

4

5

6

7

8

9

10

Spandana

SKS

Share

Bandhan

Asmitha

Equitas

Ujjivan

ASA-Gram Vidiyal

Basix

Grameen Koota

Future Financial

ESAF

Satin

Trident

Sahayata

Aarohan

Sonata

BWDA Finance

Sharda

Awareness

L&T Finance

SEIL

Fullerton

Cashpor

SKDRDP

Sanghmitra

IVDP

Suryodaya

Asomi

Vistaar

It is estimated that there are over 13,000 MFIs in this

group of startups, not-for profits or the for-profits that

have not managed to achieve a critical scale.

Very few scaled/ scalable MFIs exist.

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KATNI-1(BRANCH)16/1/2012 TO 21/1/2012

1. No of village/slum 612. No of centre's 1573. No of members 25544. No of Active clients 25055. No of Loan disbursed 137446. No of loans completed 119397. Value of loans disbursed 1286140008. Value of loan completed 1025020009. Current loan 2611200010. ALR Recovery 101554711. Loan outstanding 1446928012. No of credit officer 413. BM name Dharambir singh14. RM name jitendra singh

KATNI-1(BRANCH)23/1/2012 TO 28/1/2012

1. No of village/slum 612. No of centre's 1573. No of members 25514. No of Active clients 25045. No of Loan disbursed 138176. No of loans completed 113137. Value of loans disbursed 129378008. Value of loan completed 1033220009. Current loan 2605600010. ALR Recovery 93599611. Loan outstanding 146680012. No of credit officer 413. BM name Dharmbir singh14. RM name jitendar singh

Credit Assistant Credit assistant are the base of the spandana

As we know every big building has a base and only the strong base can give beautiful shape to any building.same as in spandana credit assistant play very vital role for the Business.Because CA are, of those employee who are close to customer.

Schedule of the credit assistant

.       Key activities performed by a CA

• CA Responsible for identifying villages, conducting village surveys, and introductory meetings (along with the Branch Managers).

1. Responsible for formation of groups (members/borrowers) for the growth of the organisation2. Responsible for imparting training to prospective borrowers.3. Responsible for taking the loan application of the members. His recommendation would be the key

input for arriving at a loan decision.4. To conduct centre meetings as per scheduled time and at a scheduled place.5. Responsible for sincerely carrying out, all the responsibilities allocated to him/her by the Branch

Manager or Head Office from time to time.6. Responsible for the cash collected and cash taken for disbursements in the centre meetings, till it is

properly handed over to the Cashier at the Branch office. 7. Responsible for the following documentation/System work at the branch

1. Filling up of centre registers, loan cards, Applications and LD vouchers2. Entry of recovery, LD and preclosed loan details3. Submission of cash as per collections with denomination slips, updating DCB, DFS4. Entering centre wise R&P in SIMS-GL5. Update operations register, Movement Register, TA Book on a daily basis

8. Responsible for the publicity of the organization at the village level. Credit assistants should spread information about all the loan products of the Organisation to the people.

9. Responsible for training new staff who get allocated to him/her, as a part of the training program.

• Delinquency Management: In case of delinquency / default, CA has to manage the situation diplomatically without hurting the feelings of borrowers. He should motivate other group members to help the delinquent client as promised at the time of loan disbursement. CA should inform the BM well in time and seek his support as required. CA should not become impatient and shout at the borrowers. He should not leave the slum / village without recovery. CA as demanded by the situation, should wait until the group collectively manage to repay the installment. If the CA knows that a loan would fall delinquent, he should go and meet the client one day before the centre meeting and motivate her to repay loan on time. If the delinquent borrower has some genuine reason to delay / default the repayment, CA should discuss with the BM and well in advance and give her the required support.

Dataflow from client level transaction to monthly reports.

• Filling up of centre registers

• Submission of cash as per collections with denomination slips, updating DCB, DFS

• Cash book (day to day)

• Operation register – progressl/d, complete loan, recovery, total old loan, ALR closingby BM n check by RM

• General ledger = outstanding, recovery

Who fills what?• Movement = every employee• Centre Register = CA• DCB = ca (check by BM)• DFS = CA (check by BM)• cashbook = CA or BM• Operation register = CA or BM• Acquaintance register (salary detail stamp) by Bm• Application form = CA (approve by BM)• Attendance register = by BM• Auditing remarks register = auditor• BM activity plan = by BM• CASH FLOW STATEMENTS (DCB & DFS)• Cash receipt and payment register=CA OR BM• Operation register = CA or BM

• Members dropout details register = CA or BM• General ledger (chashier)• Ca plan (every CA)

Points of check /verification• BM/RM should checks each and every

ALR adjustDFScentre visit checkcash checkDCB ALR adjust register check why happenmovementmembers attendance

Process gap observed• House visit after group training• Speed/meter reading should be everyday• Many members they send their demand/interest

with other hand (CA charge fine)• Rude behavior with borrower.• Single borrower was with SSFL last 4 cycle• RM cancelled appraisal due to 3 members in group

who were in rent house.• there will be no cash in branch according to policy

but cash were there in branch near about 3000(appx)but they are fake notes.

• conducting village surveys, and introductory meetings (along with the Branch Managers).But have seen CA do alone

LEVEL OF COMPLIANCE WITH SPANDANA NORMS

• ONLY THOSE MEMBERS WHOSE LOANS FROM OTHER COMPANIES HAVE BEEN COMPLETED ARE ADMITTED.

• REACHING THE CENTER ON TIME.• THOSE MEMBER WHOSE HUSBAND STAY AWAY FROM HOME

FOR LONG TIME ARE not PERMITTED TO JOINreason husband not able to come on L/D day

• CEN TER MEETINGS LOCATIONS DOES NOT CHANGE. IT HAS REMAINED THE SAME.

Other observation

• Loan size• Other MFI Reached more slums then ssfl• Customer ask for monthly/15days like other MFI

External influence• Ring leader – mrs.Sharla

Observations from branch catchment • Good condition.

• Well maintenance.• Time management (due to cold late happens per

BM comment).• proper register maintenance.• Well understanding between BM/RM/CA (really

called team spirit).

I would like to highlight• A holistic field force solution that is especially designed

for field agents of enterprises working at the bottom of the pyramid. It is designed to operate in an online-offline manner, collect any kind of data – transactions, text, images, audio, videos – and be utilized for any field process: customer acquisition, collections, marketing, training

• Field intensive enterprises that are working at the bottom of the pyramid, e.g. Microfinance Institutions

• In a pilot with Ujjivan (MFI) we validated that productivity will increase by 35% and result in a net savings of US $ 15.8 Million annually.

• According to SPANDANA valuesTRICS:s-team spirit – all work in teambut having some kind of jealous nature with each other.

Step I Introductory meeting:

Step II Group Formation:

Step III House Visits: .

Step IV Group Training: .

Step V Group Recognition Test

Step VI Loan Disbursement

Step VII Loan Recovery: .

6.30 am to 11.00 am at Centre Meetings

TYPICAL DAY OF A CA6.00 am - 6.30 am At the Branch Office: • He should report to the Branch Office at 6.00 AM• He should ensure that Centre Registers for the day and other stationary is

gathered. They should ensure - 1. Center registers are duly filled2. CA’s carry empty loan applications, job applications, calculator, five-stick, loan

cards, coin covers, rubber bands and stamp-pad etc• He should sign in the Movement register and than leave for the centre meetings.

6.30 am - 11.00 amHow is a centre meeting conducted• The CA should ensure that he reaches the meeting place on time. • He should see to it that all the group members stand in a line, they should line up

one behind the other as per the numbers allocated to them with the group leader standing at the front.

• The CA and the members should greet each other signalling the start of proceedings for the day.

• The group members should then recite the pledge followed by the CA’s pledge.• If any superior or any other staff member/Visitor, is visiting the centre than he/she

should be introduced to the members• All the borrowers and the CA should sit down on the floor. The CA and any other

staff members of the organisation should sit opposite to the groups. The CA should not seek any special privileges at the time of centre meetings, like asking for a chair or water. However he is allowed to sit on a mat provided by the borrowers.

• The CA should confirm with the group leaders whether they have received all the cards and repayments from the members for the day. If YES than he should proceed further. If NO then he should enquire the reasons for the same with the group leaders.

• The CA should collect the loan cards from each of the group leaders and update the cards (Date and signature).

• While updating, he should enquire the ALR amounts, which the members wish to pay or withdraw for that day. He should enter the same transactions in the loan cards and centre registers.

• He should then collect the cash from the group leaders. He should tally the collected cash with the demand and ALR adjustments/collections for the day.

• If there are any prepayments he should collect them and update the centre register and loan cards accordingly. He should ensure that he takes the application for the prepayment members on the same day.

• He should make the Loan Disbursements if any, in the centre meeting. • While disbursing the loans he should ensure that the name and amount is

entered in the LD form, Demand promissory note and receipt voucher on the application form.

• He should seek the signatures of the borrower and spouse on DPN and application and then hand over the cash to the borrower.

• He should verbally communicate to the members that they have agreed to stand as a guarantor for the borrower and it is upon their request, a sum of Rs __________ is being issued to the borrower.

• He should ensure, collection of GRF, upfront interest, and insurance premium as per the organisations policies.

• He should then read out the closing balances of ALR. This is compulsory and the CA should not ignore it as a routing task. In case of discrepancies in the balances on the cards and register, he should rectify the error immediately

• He should take the attendance of the members.• After attendance, he should spend a couple of minutes with the members

discussing their experiences with the products of the company.• He should inform the member’s if there is any policy change, new

products/services introduced by the company.• He should also seek feedback on the organisations products and other information

necessary to improve our products. • He should seek information of potential borrowers in the village and meet them at

a convenient time.• He should then end the meeting by greeting the members.• Typical the CA should take about 10 – 15 minutes in conducting a centre meeting.

He should ensure that all the transactions/communications should be done in the centre meetings. After the centre meeting he should not allow any of the borrower to approach him personally and vice-versa.

• He should then moves on to the next centre meeting.• If the Credit assistant is going to attend a second meeting, then the money related

to this meeting should be kept separately. The same procedure should be followed in any centre meeting.

• Before leaving the place he should check if he has collected all the cash, centre registers and other miscellaneous articles (fevi-stick, calculator, stamp-pad) from the centre.

• Typically a CA should conduct 3-5 centre meetings per day with a gap of 30 minutes between each centre meeting.

11.00 am to 2.00 pm at Branch

11.00 am to 2.00 pm at Branch

Back in the Office• Once a CA reaches the office, he should enter his arrival time from the field

in the movement register;• He should total the ALR collections, adjustments, Loan disbursements and

other receipts and payments group wise and centre wise for the day;• He then enters centre-wise totals in the DCB and checks with the Demand;• Each CA enters centre-wise receipts and payments in SIMS-GL which then

generates a report on cash to be submitted by the CA centre wise and over all.

• He should submit Centre Registers, Loan Applications (new and disbursed loans)and LD Vouchers to the BM for verification and approval

• Cash is bundled and the respective denominations are entered in the denomination sheet and cash is submitted to the cashier.

• Get the amounts verified and tallied with the cashier and take his signature on denomination sheet.

• Enter details of completed loans, pre-closed loans and Insurance claim settlement details loan wise in excel formats.

• Update Centre Registers and prepare loan applications, loan cards and LD vouchers for next day’s centre meeting.

• Leave for group training/ reorientation to old groups as per the action plan and enter time and place of training in the movement register (After 4 pm)

4.00 pm to 7.00 pm in Field

Evening - Conduct group trainings -a. Procedure:

After forming into groups the group members training schedule is for a period of five days constituting of six hours. The following subjects are discussed:

Day 1Introduction, Pledge, Concept and Rules of Centre Meeting, Qualities of Group Leader and Selection of Group Leader -2 hours

Day 2Loan Products, Purpose, Fees, Interest and other charges, Repayment Method, ALR, Loan Application Process, Disbursement process, KYC, Joint Liability and other policy details including preclosure rules. - 3 hours

Day 3Other Products like insurance etc and revision of day 1 and day 2 - 1 hour

Followings should be covered on all days – These are some of the important points, which the CA should explain as part of the credit policy to the members.

• All the members in the group should recommend and accept each other’s liability to avail loans. In case a member defaults, the rest of the group members should pay for that member

• The member’s husband should be present at the time of disbursement to ensure that the family members are kept informed.

• Aspect like, Spandana being a private entity does not fall under the purview of any Govt loan wavers, subsidies granted by the Govt. Irrespective of any change in Govt policy, the members should abide by the policies of the company

• The members should strictly repay the loans and should not pay heed to any rumours/political/bureaucratic statements provoking members for defaulting loans

There are some non negotiable that should be kept in mind when conducting GT. • There should be a minimum 6 hours training imparted to all members and if further training

is necessary, should be provided. Attendance should be marked in HALO register during training. Strict punctuality should be observed by members and staff during group training. If members arrive late or are absent, the GT should be postponed to the next day.

The curriculum for GT is as followsDay1: The Field staff introduces herself/himself to the members of the GT. As the group is

already formed, leader is selected in the first training session after CA explaining the qualities to be observed to select the leader. Group leader should posses the following qualities: – Should be honest and have high integrity– Should be an unbiased and not a selfish person – Should be a knowledgeable person– Should be patient enough to manage the group

• The group members should then select a leader for their group. • It should be made clear that a group leader is just another representative of the group. Her

role is majorly to assist in conducting the centre meetings. Besides this she, shall not have any discretionary powers to decide on who should be a member, who should get a loan, etc.

Centre meeting• Centre meeting is the place where three to four groups meet to conduct weekly financial

transactions. • They have to arrive at the meeting venue, 10 minutes prior to the start time• Should keep the meeting place clean Should bring loan cards and repayments and submit to

the group leader before the centre meeting• They should sit in an order group wise before the CA• Each member should stand up and greet the CA and the CA in turn greets the members• The members should recite the pledge and then the CA will recite his pledge• The members sit in their respective places • After the transactions are completed, they should reconcile their loan cards with the CA• Should call their attendance when asked by the CA• In case the members wish to leave the place before the closure of centre meetings, then she

should take the permission from the CA citing appropriate reasonsIntroduction of Pledge• Members pledge is recited to make them understand the seriousness of the programme and

that no member should default at any point of time. It emphasises on the fact that, the members shall work diligently and honestly for the benefit of the family. She shall utilise the loan effectively and efficiently and make regular payments. She shall also stand by the other members in difficult times. Further the pledge should end, “Whatever I have said and whatever I do, God shall stand witness”. Members should repeat this as many times as they can administer independently without CA’s assistance. This will be followed by explanation on Centre Meetings.

• The CA’s pledge is to reciprocate the same seriousness and to make him understand that the job should be conducted in a transparent, sincere and honest way irrespective of caste, creed and political conditions.

Day2: Loan ProductsSession opens with recital of pledgeIn this session, the CA has to explain about the loan products –

– General Loan – Interim Loan

General Loan• General loan is given for both Income generating and consumption purposes. The loan sizes

vary between Rs. 2000 to Rs.20000. • The loan with interest is repayable in 50 to 104 equal instalments. Loan should be utilised

for the right purpose. It should not be wrongly utilized or spent on unnecessary things. The loan amount depends on the cash flow of the clients rather than the loan cycles

Charges on Loan:• An upfront interest of Y % of Loan Amount is deducted from the loan amount at the time of

disbursement. An amount of Rs ____ is collected towards group registration fees. This is a one time fee collected for enrolment of new members.

• The interest charged on the loan is XX %. It is charged on a flat basis (explain flat interest rate)

Pre-closure of Loan:• Pre-closure of loan is allowed after 35 weeks with 5 weeks interest. Only in exceptional

cases preclosure s allowed before 35 weeks for instance: client migration, does not want to take subsequent loan etc., In case of pre-closure, if the borrower wants fresh loan, application will be taken on the same day of pre-closure and loan will be disbursed next week followed by a detailed appraisal by the Branch Manager. Borrowers should contact Branch Manager / HO if the CA does not take application for subsequent loan or does not disburse loan in the following week of submitting loan application. Branch telephone number and HO telephone number are written on loan card.

Interim Loan is offered selectively. If the branch is offering the interim loan, the following should be covered, else, skipped.

• After completion of at least 15 weeks of General Loan, members with good repayment discipline and attendance can avail Interim Loans ranging between Rs 1000 to Rs 5000.

• The loan with interest is repayable in 50 to 100 equal instalments. Loan should be utilised for the right purpose. It should not be wrongly utilized or spent on unnecessary things. The loan amount depends on the cash flow of the clients rather than the loan cycles

• An upfront interest of Z % of Loan Amount is deducted from the loan amount at the time of disbursement

• The interest charged on the loan is XX %. It is charged on a flat basis (explain flat interest rate)

ALR: Additional Loan Recovery (now discontinued)• The CA should clearly explain the concept of ALR and the benefits from it. He should ensure

that the members do not mistake this to be as savings. The CA should understand that it is completely out of choice. However the CA should motivate members to pay ALR whenever they have excess amounts over and above the loan installments, so that they can use this amount for repayment of loan when-ever required. Some of the advantages of ALR are as follows

• In times of crisis, natural disasters, the members can use this amount without defaulting• Seasonal business people with irregular cash flows can have ALR to adjust them whenever

required• People with monthly cash flows can prepay for the next three weeks and hence be secured.

However this should not be an excuse to for not attending the centre meetings• The CA should explain to the members that ALR can only be adjusted to the weekly

installments. No cash withdrawals are allowed at any point of time. No interest is paid on ALR

• Further THE CA SHOULD ENSURE THAT ALR BALANCES OF CLIENT SHOULD NOT EXCEED HER OUTSTANDING AMOUNT.

Loan Application Form• At the end of GRT, members who require loan should make an

application to the branch manager in the prescribed format. Each member should bring three passport size photographs of herself with her spouse, Photostat copy of ID proof (Ration card/Voter ID), two Rs 1/- revenue stamps.

• Show the application format• Member should be explained that their signing on a guarantee

form is an acceptance of group liability and that they shall repay the loan in case of default of any of the group members

Loan Disbursement• Loan is disbursed on the centre meeting day to all members after

they pass through the GRT. Loan is disbursed to individual members at the branches in presence of their Husbands. The members also need to bring their original KYC documents which are cross checked again by the BM/ visiting officers like RM/ DM etc. The members spouses also sign on the Recommendation as part of the form.

• Earlier, the disbursements also used to happen in the center meetings which has now been discontinued

Third Day: Value added servicesInsurance • Keeping borrower’s welfare and risk mitigation in mind, insurance is made compulsory to

the borrowers and their spouses. Spandana has an association with Insurance company for life insurance cover to all the borrowers and their spouses. Product features are given below:

• Insurance is compulsory for all borrowers and their husbands• Insurance is done for one year at the time of loan disbursement• Premium is collected at the time of loan disbursement.• Sum Insured is always equal to the loan amount• In case of single women and widows, instead of the coverage for the Spouse, the member

itself gets double the coverage• In case of death of borrower or her husband, upon submitting death certificate and ID proof,

claim will be settled• By adjusting loan outstanding with the claim amount loan is closed with five weeks interest

on it and the balance amount will be paid to the nominee after receiving claim amount from Insurance company.

• Loan closure will be done immediately after the death of borrower/spouse and the group members need not pay for the deceased borrower/borrower becoming widow.

• In the unfortunate event of death of the client or spouse, the group members should inform to the BM. Group members should submit Death Certificate within a week to the Branch Manager.

The CA has to sum up all the topics discussed in the three day training and he should ask questions to ensure that members understood all the topics explained in the training. The CA should also inform the members about GRT time.

• CA should be careful in selecting venue for group trainings and centre meetings. He should preferably conduct these trainings and centre meetings in common places such as community centres/ churches. Training / centre meetings can be conducted in members’ houses only in case there is no alternate place. In case training / centre meeting is conducted in member’s house, he should ensure that not more than one training/centre meeting is conducted in the same house.

• Some women play active role in recommending new groups. CA should carefully deal with such situations and should not encourage such vested interests.

• Loan repayment installment in centre meeting should only be collected from the group leader when she confirms that she received loan installments from all the group members.

• CA should not come to Branch without 100% loan recovery. In case of delay, he should inform the Branch Manager.

• CA should respect borrowers and should not cultivate any personal relationship with her/her family members/any outsider.

• CA should not accept any gifts/loans/commissions from borrowers.• Should not insist upon ALR every week as it is left to the borrower’s choice.

He should only explain them the benefits of ALR.• Should cooperate with other staff in the Branch and ensure smooth

functioning• Should maintain personal hygiene and decently dressed.

THANK YOU