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Bangalore-based Ujjivan Financial Services, among the established microfinance institutions, has closed its loan book for 2013-14 with Rs 1,617 crore, registering a 44% growth over the previous financial year. It achieved a pre-tax profit of Rs 83.81 crore, among the highest in the industry.
Ujjivan has taken its services to 22 states across India through 350 branches that serve over 1.3 million active customers. It has disbursed loans amounting to over Rs 6,800 crore with a repayment rate of above 99%. It has achieved a customer retention rate of 85%. Egged on by the Malegam Committee recommendations on operating margins, through a series of process re-engineering and technology initiatives, Ujjivan has reduced its operating expenses ratio to 8.8% from the astronomical 17% the 2010-11.
Speaking about the company's performance during FY 2014-15, Samit Ghosh, MD, Ujjivan Financial Services, said: "We are pleased that the fiscal year 2013-14 has been a golden year in the history of Ujjivan. The company has balanced growth and profitability while enhancing its portfolio quality and significantly reducing its operating costs. We are especially proud of our achievements of serving the customers safely and securely by disbursing 50% of the loans cashless, into their bank accounts."
Ujjivan initiated cashless disbursement in 2012, after one of their field staff carrying cash was shot dead in Bihar. During the financial year 2013-14 Ujjivan disbursed over Rs 1,000 crore, almost 50% of their total loan disbursements cashless directly to their underserved customers' bank accounts in cities, towns and villages across India.
Counter to the conventional wisdom of increased demand in the urban areas due to migration of the poor to urban centres, Ujjivan has observed a growing increase in loan disbursement in the semi-urban and rural areas when compared to urban. While Ujjivan's initial focus was the urban poor, today almost 60% of their borrowers come from the semi-urban and rural parts of the country. During the financial year 2013-14, 780,878 borrowers availed of loans from Ujjivan in semi-urban and rural areas compared to 516,252 in urban areas.
This rise in demand for loans from India's semi-urban and rural population led the organisation to open more branches in semi-urban areas, where it serves both customers living in towns and villages. Of the 350 branches that Ujjivan operates, around 199 cater to the semi-urban population across 22 states and Union Territories.
