Individual Lending
Challenges in Scaling Up
Individual Lending – A Brief history


Individual Lending (IL)
started with open
market customers as a
separate line of
b...
The Ujjivan IL Project
 The Context:
o The Indian Microfinance Crisis required a deliberately cautious approach to busine...
Institutional Diagnostic
 Institutional Diagnostic: the outcomes
o Shift from the ‘GL+’ approach and fresh perspective of...
The IL Core Teams

 The IL core teams are responsible for overall IL business scale up in the
respective regions.
 They ...
Strategy & Product Design
o Product redesign:
Existing
Cycle based loan limits
Appraisal formats were weak
Declaration bas...
The Pilot To be completed in Feb ‘14
Head-Credit

IL Credit
Manager

 Hubs have been set up

Credit
Officer

IL Hub=
1 PM...
Ongoing Activities
 Financial Literacy & Marketing Material Development
o Review of existing marketing material (undertak...
December 12, 2013

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December 12, 2013

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Individual Lending Carol Furtado, Ujjivan Financial Services

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Individual Lending Carol Furtado, Ujjivan Financial Services

  1. 1. Individual Lending Challenges in Scaling Up
  2. 2. Individual Lending – A Brief history  Individual Lending (IL) started with open market customers as a separate line of business & org structure  Andhra Crisis struck industry  IL business slowed down  Stopped open market operations because of poor portfolio quality problems.  Started converting Group Loan customers in 3rd Cycle  IL loans offered in branches when they completed 2 years of operations  IL sales team merged with branch group lending team Steps taken to streamline IL process like formation IL credit team change reporting structure of IL team members    WWB’s Assistance in Scaling Up IL Product features and process changed to reduce TAT, increase business IL field process automation underway
  3. 3. The Ujjivan IL Project  The Context: o The Indian Microfinance Crisis required a deliberately cautious approach to business: Ujjivan could not scale up IL business. o Post the crisis, ramp up of Individual Lending (IL) became a priority o The constraints in scaling up IL- lack of traditional collateral, financial documents & trained manpower  Project Aim: o To optimize Ujjivan’s IL product, methodology and delivery to effectively target and serve Ujjivan’s client base while minimizing portfolio risk. o To scale up the IL business so that its contribution to the overall business rises manifold and becomes equal to that of Group Lending (GL) in next 3 years
  4. 4. Institutional Diagnostic  Institutional Diagnostic: the outcomes o Shift from the ‘GL+’ approach and fresh perspective of looking at IL as a scalable business o Change in organizational structure and delineation of IL & GL hierarchies Existing Recommended
  5. 5. The IL Core Teams  The IL core teams are responsible for overall IL business scale up in the respective regions.  They facilitate the initiatives and plan as well as take actions to bring about the transformations for success and growth of the IL business
  6. 6. Strategy & Product Design o Product redesign: Existing Cycle based loan limits Appraisal formats were weak Declaration based information gathering Weak guarantor norms Recommended Appraisal based loan limits Lean & Strong Appraisal Formats Cross Verification of collected information Stronger guarantor norms o Sector Studies: • Studied 4 clusters (Jaipur- Shellac Bangles, Jaipur- Beauty Parlours, BangaloreProvision Stores & Powerloom Silk Weaving) o Recommended Launch of Open Market IL Products- Open Market Business Loan & Open Market Livestock Loan- being launched now.
  7. 7. The Pilot To be completed in Feb ‘14 Head-Credit IL Credit Manager  Hubs have been set up Credit Officer IL Hub= 1 PM(IL)+ up to 6 LO (Up to 5 branches)  Process flow of the loans will change with independent credit underwriting prior to sanctioning  Testing of new products, processes, technology interventions, Call centres
  8. 8. Ongoing Activities  Financial Literacy & Marketing Material Development o Review of existing marketing material (undertaken) and development of new marketing material (ongoing) o Discussions on marketing strategy (ongoing)  Staff Capacity Building & Training of Trainers o Development of training content and training of (some of the) trainers o Periodic review of training programs, including content (ongoing)  Exposure Visits - Learning from the peers o Exposure to different aspects of individual lending in renowned institutions
  9. 9. December 12, 2013 9
  10. 10. December 12, 2013 9
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