Arohan Financial Services Unlisted Shares

Annual Report Summary

Arohan's Annual Report for 2021-2022, themed "Elements of the Future," focuses on maintaining sustainable business practices by prioritizing scalability, customer value, and digital advancements. It addresses challenges experienced globally and within the microfinance industry, emphasizing agility, innovation, and adaptation to customer needs. Arohan, as part of the Aavishkaar Group, highlights its commitment to serving key stakeholders with lasting value propositions, efficiency, and future-readiness.

Key Highlights of FY21-22

Arohan launched the "ApnaArohan" Customer App, a 360° mobile app providing loan information, cross-sale products including insurance, and online EMI payments in regional languages. Arohan was recognized as 'Microfinance Company of the Year' at the 3rd Annual BFSI Technology Excellence Awards 2022. The Company was recognized among the 'Top 25 Safest Workplaces in India' by KelpHR POSH Awards®. Accolades also included; "New Code of Work Awards 2021 in the Large Enterprise Category by PeopleStrong". Certifications include: Great Place to Work-Certified™ thrice in a row, and SMART Campaign Certification to award our client protection principle.

Chairman's Address

The Chairman's address acknowledges a year of opportunities and learning amidst pandemic-related challenges. The Reserve Bank of India's revised regulatory framework for Microfinance Loans in March 2022, is recognized as a significant advancement for the industry, shifting the onus of responsible lending onto the players. Arohan emphasizes digitization, transitioning to e-documentation and cashless repayment structures. The company invested in employee development and well-being, achieving Great Place to Work CertifiedTM status three times. Arohan attained a gender diversity ratio of 17% among its employee base by the end of March 2022. The Company decided not to proceed with the proposed IPO due to adverse market conditions, instead onboarding Piramal Alternatives with an INR 200 Cr infusion in March 2022.

Promoter's Address

The Promoter’s address highlights the long-term vision for Arohan to evolve into a new-age technology-enabled digital financial inclusion platform. Arohan is among the first Microfinance Institutions to receive approval from the Government of India to conduct Aadhaar-enabled eKYC. Additionally, the company intends to pilot a Green Loan Product to promote sustainable livelihoods.

Managing Director's Address

The Managing Director discusses SEBI approval for an IPO, Wave II of COVID-19, and the Resolution Package 2.0. The aftermath of the pandemic and accounting differences across banks made potential investors hold their decisions. The Assam Microfinance Incentive and Relief Scheme (AMFIRS) 2021 is recognized as the first of its kind. The central bank announced the new MFI Regulations in March 2022, a paradigm shift in norms. Arohan focuses on collections, ensuring borrowers receive needed credit, and adding to the management bench strength. The company has a full IT road map including a sector-first credit scoring model and an 'ApnaArohan' app for customers. Arohan is among the first NBFC-MFIs to receive approval to use Aadhaar for eKYC verification. Our five-year Vision plan of 20 by 2025 will need an additional year to make up for lost time during the pandemic.

Key Differentiators: Digitally Advanced and Strong ESG Focus

Arohan is committed to sustainable business practices through a well-knitted Environment, Social and Governance (ESG) model. They are guided by the elements of nature, which is the subtile power facilitator of progress and movement. Through its social and credit plus initiatives for its customers and communities, Arohan focuses on creating a triple bottom-line effect impacting people, planet and profit.

Arohan offers various products, with emphasis on income generating loans and cashless disbursal through technology. The 'Elements of the Future' that the Company operates with are: Aakash (Space), Bhoomi (Earth), Vayu (Wind), Agni (Fire), and Jal (Water). Arohan recognized as a 'Microfinance Company of the Year' and recognized by MFIN for its progressive policies, with the intent to get its Assam portfolio back on track with AMFIRS 2021 initiative, as well as continuing to work on growth capital. They strive for gender equity, providing credit to the bottom line in efficient manner, microfinance can play a significant role in nation-building.

Financial Performance, FY21-22

Revenue: INR 92,043 Lakhs Gross Profits: INR 8,294 Lakhs Net Worth: INR 1,02,348 Lakhs Funds Drawn: INR 3,05,062 Lakhs Cash and Cash Equivalent: INR 95,363 Lakhs

Operational Highlights

Customer Strength: 18.64 Lakhs Branch: 740 Microfinance Branch Districts: 225 States: 14 Employee Strength: 7,160 Disbursement: INR 3,858.97 Crores Collection: INR 230.38 Crores

Mission & Core Values

The mission is to empower underserved households and small businesses sustainably. The vision is to impact over 20 million lives by 2025. Core values include employee engagement, transparency, honesty and integrity, innovation, customer centricity, and shareholder value focus.

Looking Ahead

FY2022-23 priorities include strengthening portfolio quality, enhancing operations in existing markets, and expanding into new states. A focus on digital lending, customer service, and potential capital raises is planned.