This document provides an overview of Equitas Micro Finance India Pvt Ltd, including its mission and culture, operational model, and approach to developing trustworthy employees. The key points are: 1) Equitas' mission focuses on improving quality of life for those not served by formal financial sectors through transparent and trustworthy access to financial products. 2) Its operational model emphasizes fairness, governance, efficient operations, and responsible pricing. 3) It develops trustworthy employees by acquiring them through referrals, aligning them through training, and retaining them through engagement programs that address physical, mental, emotional and spiritual needs.

1. EQUITAS MICRO FINANCE INDIA P LTD Private & Confidential
Equitas… the story so far…
Version 1 Presentation by Murali

2. Private & Confidential
First Assignment given to me…
 To develop an unique culture for the Organization.
 I jotted down few points on a piece of paper
 We debated and finally agreed on “Trustworthiness”
 Equitas – a Latin word – translates as equitable which is
being “fair and transparent”.
 These words were incorporated into our mission
statement.
 Our mission statement not only focuses on right results
but also on right reasons (our intent) and the right way
(our culture)
Equitas Micro Finance India P Ltd

3. Private & Confidential
Mission of Equitas…
(1)To improve quality of life (2)by increasing total
household asset value (3)of those who are not
effectively serviced by the formal financial sector (4)by
providing transparent and trustworthy access (5)to
financial and other relevant products and services
(6)by deploying cutting edge technology (7)and forming
partnerships and alliances
Equitas Micro Finance India P Ltd

4. Private & Confidential
Mission of Equitas…
Improve
Quality of Life
Transparent and Trustworthy access
 Financial & other relevant products & services
Cutting edge technology
Partnership alliances
Increase total
Not effectively household assets
serviced by formal value
financial sector

5. Private & Confidential
Responsible Microfinance – The Equitas Model
Fairness &
Transparency
Employee
Governance
engagement
Responsible
Microfinance
Efficient
Pricing Operations &
philosophy Risk
Management

6. Private & Confidential
Fairness & Transparency
• Clear communication
of all-inclusive
reducing balance IRR
interest rate
• Admin fee for term
life insurance cover
published in passbook

7. Private & Confidential
Governance
Reputed board of directors
• Independent directors constitute 1/3rd of the board
• Strong governance processes
• Clause 49 of Listed companies being followed
• Corporate Governance Rating of 3 from CRISIL – 8th Corporate
Clear articulation of mission focus & product philosophy
• Minimum 25% scale ratio
• All services consumed by members to be provided on not-for-
profit basis
• No credit for purchase of consumer durables
Voluntary caps on RoE & Executive Pay
• RoE capped at 25% (authored by Equitas); benchmarked against
Government Banks
• Min-Max Staff pay ratio capped at 1:40

8. Private & Confidential
Efficient Operations & Risk Management
Real-time Pre-printed Automated Consistently
Centralized Risk
collections repayment forms good quality
back-office Management
monitoring stickers processing service
Operations Philosophy
 At Branches, client-facing activities only will be conducted by field
staff. All other activities will either be outsourced or centralized
 No reports required from branches, if they can be generated by HO

9. Private & Confidential
Pricing philosophy
Lending
Lowest
rate High
lending
linked to Efficiency
rate
RoE
 Lending rate to be calculated based on steady-state operating cost; instead
of current operating cost
 The cost of expansion to be borne by investors, rather than initial
customers
 Even at the time of its launch in 2007, Equitas charged all-inclusive
reducing balance interest rate of 25.5% based on a steady-state target op-
ex of 7.5% rather than Equitas‟ then op-ex of 21%
 Right from launch till date, Equitas‟ interest rate continues to be the
lowest among MFIs in India

10. Private & Confidential
Equitas – Taking Responsible Microfinance to the next level
Equitas –
Responsible
Responsible MFI +
MFI Ecosystem of
MFI services

11. Private & Confidential
The Equitas Ecosystem
Skill
development
•Over 100,000
trained so far
Financial commitments
5% of profits to EDIT
 15% of networth for Healthcare
Food Security
•19 Stores
purchase of land & •Over quarter Improving quality of running
million members‟ lives
construction of building families •6% cost
benefited benefit to
for Gurukul clients
 Rs 2000 per month
per branch & 1 CSR rep
for 10 branches for
health-camps School
education
•49 Tuition
Centres
•Two Schools

12. Private & Confidential
MISSION – TEAM HR
Acquire, align, assess and retain ‘Trustworthy’
employees.

13. Private & Confidential
What do we mean by Trustworthy Employees?
(Personal and Organizational)
Character Competence
 Integrity  Technical
 Integrated – no gap between  Knowledge and skill to achieve
intent and behavior the agree-upon results
 Maturity  Conceptual
 Balance between courage and  Ability to see the big picture, to
consideration examine the assumptions and
 Abundance Mentality shift perspectives
 Belief that there is “enough  Interdependent
for everyone  Ability to interact effectively
with others – listen,
communicate, get to third
alternatives, create win-win
agreements, and work towards
synergistic solutions

14. Private & Confidential
Why do we develop „Trustworthy‟ Employees?
Loyalty
Referrals
Goodwill Confidence
Customers Productivity
Support
Society Supervisor
Trustworthy
Employees
Confidence Lenders Investors Confidence
Rates Valuation
Regulators
Confidence
Lesser controls

15. Private & Confidential
How do we develop „Trustworthy‟ Employees?
Acquire
Recruitment
Retain Align
Trustworthy
Engagement Training
Employees
Performance
Management
System
Assess

16. Private & Confidential
On Recruitment…
 80% of staff come through employee referral.
 Employee referral scheme has been fine-tuned to encourage quality
references.
 Two levels and the HR have to clear the candidate.
 Candidates are sent for field visit to help them get right perspective
about the organization and their role.
 “Know Your Candidate‟s Family Well” process to improve alignment:
 To understand the cultural aspects of the family.
 To help family get the right perspective about the organization
and the role their family member is going to perform.
 To reach out to the family in emergency situations.
 Reference checks done for 100% of candidates prior to offer.
 Voluntary “No poach policy” in place.
 Candidates posted very close to their residence.

17. Private & Confidential
On Training…
 Focus is on “Unity & Uniformity” across all regions.
 2 weeks centralized induction program for all field staff at
Regional Training Centers:
 2 days Induction (common for all staff).
 1 day preliminary field visit to understand the field process.
 2 days of intense process training – what, why & how.
 3 days of role-related field visits
 2 days of certification process.
 New Region Start-up Process:
 Leadership team put through 2 weeks of intense training.
 Additional training on recruitment, infrastructure creation
and statutory compliance.
 Ongoing training
 Back to Basics
 Behavioral aspects

18. Private & Confidential
On Performance Management System…
 Role Descriptions & candidate profiles are in place.
 Win: win agreements…
 Desired results – measurable goals
 Guidelines – process adherence & cultural adherence
 Resources – physical, financial, people, organizational.
 Accountability – frequency of review & with whom.
 Consequences – rewards, recognition, etc.
 Performance Review done twice a year.
 Normalization done area-wise & role-wise.
 Transparent method of computing Performance increments and
promotion increments.
 Revision letters rolled out on 1st April 2011.
 Career Enhancement Policy

19. Private & Confidential
On Employee Engagement…
Guiding principle… “Treat your employees the way you want them to treat
your best customers”
 We strive to improve “Quality of Life” of our employees…
 “Quality of life” may be enhanced by addressing 4 key aspects of the
“Whole” person:
 Physical – need to maintain a certain standard of living.
 Mental – need to learn and grow.
 Emotional – need to be loved, cared and recognized.
 Spiritual – need to do meaningful work and contribute.
 All our people practices are centered around these key aspects.

20. Private & Confidential
On Employee Engagement…
People Practices Physical Mental Emotional Spiritual
Sessions to connect with Mission
Health Insurance cover for Total family
Personal Accident cover for self
Two-wheeler Loan
Emergency Loan
Festival Loan
Financial assistance for higher
education
Employee friendly Leave Policy
Buffer positions

21. Private & Confidential
On Employee Engagement…
People Practices Physical Mental Emotional Spiritual
Succession Plan
Career Enhancement Program
Employee satisfaction surveys
Open House Sessions
Branch Award Scheme
Spot Recognition Scheme
Equitas Day out
Employee Stock Option Scheme
Monthly Communication meetings

22. Private & Confidential
On Employee Engagement…
People Practices Physical Mental Emotional Spiritual
Regular Audio Conferences
Monthly Hotline with Group President
A day in the life of… program
Snack Allowance for field staff
Ecosystem access to all employees
Birthday celebrations
Wedding Anniversary celebrations
Grievance Redress System

23. Private & Confidential
Thank you!!!