A Business Analysis of Basix, a leading Microfinance and Livlihood firm operating in India.

1. Presented By: Amitabh Vatsya http://alphaphile.blogger.com http://in.linkedin.com/in/amitabhvatsya Email: amitabhhelios@gmail.com Basix:A Study of Business Processes

2. Basix BASIX is a livelihood promotion institution established in 1996, working with over a million and a half customers, over 90% being rural poor households and about 10% urban slum dwellers. BASIX works in 16 states and over 22,400 villages. It has a staff of over 5,400 of which 80 percent are based in small towns and villages.

3. BASIX mission To promote a large number of sustainable livelihoods, including for the rural poor and women, through the provision of financial services and technical assistance in an integrated manner. BASIX will strive to yield a competitive rate of return to its investors so as to be able to access mainstream capital and human resources on a continuous basis.

4. Value . The circle represents the globe, our mother Earth, half of which is dark blue, representing poor, who are excluded from opportunities for better livelihoods. The white dot in the dark region represents an area of hope, arising from the talents and aspirations of the poor and the efforts of BASIX to promote livelihoods. The white part is the economically more prosperous world, but colorless, and it can benefit from the vibrancy and talents of the dark blue part. The lines represent BASIX attempts to establish linkages between the two zones. These linkages include capital, human resources, technology, markets, institutions and policies. The environment is represented by the circular boundary, which also depicts the Earth. Anything that we do to enhance prosperity, has to be sustainable for both zones together. With the motto, “Equity for Equity” means that BASIX attempts to use capital (financial, human, social and natural capital) to work towards bringing equality of opportunity and social justice in society, globally.

5. Corporate Structure The Holding Company of the BASIX Group is called Bhartiya Samruddhi Investments and Consulting Services (BASICS) Ltd.) which started operations in 1996

6. Founder: Mr. Vijay Mahajan IIT D & IIM A & Princeton UniversityAlumnus. Vijay co-founded PRADAN in 1983, Sa-Dhan in 1998 and APMAS in 2000. He has co-authored a book "The Forgotten Sector" on the rural non-farm sector Member of the Committee on Financial Inclusion and Committee on Financial Sector Reforms constituted by the Reserve Bank of India. "Outstanding Social Entrepreneur" by the Schwab Foundation of the World Economic Forum, Davos in 2003.

8. Financial Inclusion Services (FINS)

10. Strategy behind Livelihood Triad

11. Financial Inclusion Services (FINS) Savings: Direct and as Business Correspondent Credit: agricultural, allied and non-farm activities; loans for housing, water & sanitation, vocational training Insurance for lives and livelihoods – health, crop, livestock, micro-enterprise assets Money transfer for migrant workers and Micro-pensions

12. Agricultural/Business Development Services (Ag/BDS) Productivity enhancement through increase in yields or reduction in costs. Risk mitigation (other than insurance) – such as livestock vaccination Local value addition through processing – such as cotton ginning or milk chilling Alternate Market linkages - Input supply, output sales Diversification from farm to allied and non-farm activity

13. INSTITUIONAL DEVELOPMENT SERVICES (IDS) Individual level awareness, skill and entrepreneurship development, building solidarity and trust. Formation of groups, federations, co-operatives, mutual benefits, etc., of producers. Accounting and management information systems, using IT Building collaborations to deliver a wide range of services Sector and Policy work – analysis and advocacy for changes/reforms

14. Outreach

15. Financial Report Gross loan portfolio USD 73.6 million Average loan balance per borrower USD 147.6 Total assets USD 111.1 million Number of active borrowers 498,681 Deposit USD 10.2 million

19. Share Holding Pattern

20. Highlights of Financial Statements The best ever on-time repayment rate of 99.2% as on March 31, 2009. Bad Debt is Rs 96,55,000 only Performing assets as per RBI norms 99.6%. It has also improved its portfolio at risk of more than 90 days (PAR>90 days) to 0.8%.

21. B-ABLE-BASIX Academy for Building Lifelong Employability B-ABLE is a market driven, technologically supported training system which will be tailored to the aspirations, aptitude and dedication of the student rather than his/her formal educational qualifications. BASIX will be supporting them through access to student loans and enabling them through connections with employers. The main focus is building lifelong employability.

22. BASIX Academy for Livelihoods and Microfinance Practice (B-A-LAMP) An entry level and on-the-job training initiative Focus is on training of human resources in microfinance and livelihoods. “identify potential individuals, including from rural, poor and socially disadvantaged communities, build their competencies (Knowledge, Skill and Attitude) and deploy them as required by the livelihood sector from time to time”.

23. SWOT Analysis: Strength Significant track record in microfinance Comfortable asset quality, supported by adequate systems and processes Diversified resource profile

24. SWOT Analysis: Weakness Below-average capitalization levels Modest, though improving, earnings profile Small size of operations vis-à-vis its peers in the sector

25. SWOT Analysis: Opportunity Scalability and Sustainability: BSFL business plan with aggressive growth projections envisages a loan outstanding of Rs.10.4 billion by March 31, 2010 and 36.8 billion by March 31, 2012. The company is expected to raise adequate capital to achieve these growth projections.

26. SWOT Analysis:Threat Operational Effectiveness: On account of increase in advances and also increase in upfront processing fees from 2-3%, BSFL's profit after tax has grown significantly. But on account of high operating expense levels BSFLs earnings profile remains modest inspite of improvement in net profitability margin. The primary reason behind this is its strategy to expand its operations by opening branches in new regions and states.

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