This company was established in 1997 as an NBFC focused on microfinance in Karnataka, India. It has since expanded to serve over 6 lakh households across 7 states. Key milestones include becoming a systemically important NBFC in 2012 and recording profits of Rs. 31 Cr in 2015 with the lowest operating expenses. Compared to other MFIs, this NBFC focuses on livelihood development through skill training and low-cost financing between 5-6% interest. Future plans include expanding to more districts and client segments with diverse financing products and localized delivery modes.

1. Company Background
• Company was initially established in 1997 as Karnataka Agri Development Finance Company-
subsequently registered as a RBI regulated NBFC-NDSI in 2011.
• Granted RBI license in Feb 2015 as NBFC- microFinance Institution
• Equity owned by NABARD, Government of Karnataka and Public Sector Banks
• Company leverages the support of Business Development Correspondents to reach ultimate
clients. Company supports sustainable livelihoods in rural and urban areas , in farm and non-
farm sectors .
• Company has a differentiated and tiered approach to livelihood development with skill training-
supports individuals directly, through groups, institutions and also livelihood clusters. Partners
with livelihood enabling and promoting institutions
Key Milestones
• Became a systemically important NBFC in 2012
• Operates across seven states and reaches out to 6 lakh poor households
• Company records profits (PBT- Rs 31 Cr) with the lowest operating expenses ratio –Y 2015
• Partners with multilateral agencies like IFAD and other also other Govt. Institutions
• Provides low cost finance to clients with lower interest margin of around 5-6 %
Company snapshot

2. Company Performance
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TotalAssets
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DisbursementDisbursement Growth rate
Loan Disbursement
PARTICULARS 2011-12 2012-13 2013-14 2014-15
Clients covered (lakhs) 1.19 2.41 3.93 5.35
Profit after tax (lakhs) 8.64 210.09 1,08.95 1,741.37
ROA 1.21% 2.07% 2.25% 2.11%
ROE 6.20% 10.11% 10.87% 10.29%
Book Value per share (in `) 11.39 11.32 12.50 12.97
(Amount in crore)

3. Some key differences
Parameters mFIs ( general) NABFINs
1.Ownership Privately owned Public Sector / govt ownership
2.Client segment Individuals in JLGs Groups , individuals & Institutions.
SHGs (predominantly ) and JLGs.
3.Transaction modes Directly Uses Intermediaries – Business
Development Correspondent
4.Focus of financing Asset focus Livelihood focus & Skill loans
5.Product formats Standardized Need based, subject to ceilings
prescribed by regulator
6. Margins ( loan pricing – ULR) 10-12 %; (22-27 % p.a.) 5-6 % (14-16.75 % p.a).
7.Repayment Frequency Standardized Cash flow & need based; with
staggered, deferred , moratoriums.
8.Grace periods / gestation Not seen Yes, provided
9.Geography covered Urban predominantly Rural areas predominantly

4. Developments
• Has dedicated, talented and committed team of about 300 staff across 75 districts
• Have succeeded substantially to prove low cost finance can be done by mFIs with lower
interest margin of around 5-6 %
• The Company is well on the course of replicating the same in resource poor regions as also
unreached segments and institutions.
• To maintain a sectoral lead and serve as a profit earning mFI which is client friendly , with
diverse range of products coupled with high standards of governance and transparency.
Future Plans
• Reaches out to about 1/5 th the districts of the country, including the NE Regions serving
the unreached segments of the country.
• Financing second level institutions, livelihood clusters, activity groups that supports
livelihoods development for the poor and unreached / unserved.
• Funding unemployed youth in conflict stricken areas and other geographies with
vocational training with skill loans & post training placements
• Further diversification to geographies and also other unreached client segments , with
diverse products and with localized and client friendly delivery modes .
Future Plans