Micro-finance 6th sem

1. GROUP -5
SECTION – 2
JANALAKSHMI MFI
PERFORMANCE
INDICATOR
SALMAN – 70
MATHAN- 69
PRAVIN - 68
POOJA - 73
PRAMOD - 54

2. CONTENT
PERFORMANCE INDICATORS
1. Outreach : Breadth
2. Outreach : Depth
3. Collection Performance or Loan Repayment
: Portfolio at risk
4. Financial Sustainability ( Profitability)
Return on Assets (ROA)
Return on Equity (ROE)
5. Efficiency
Operating Expense Ratio
6. Social indicators

3. 1. OUTREACH - BREADTH
Outreach summary for the period ended /as on
end
Unit Sep-16 Mar-16 Mar-15 Mar-14
Members No. (in million) 5.50 4.62 2.34 1.41
Borrowers No. (in million) 5.50 4.62 2.34 1.41
Branches No. 386 343 234 154
Cities No. 197 184 151 85
Women borrowers % 99.20 99.84 99.91 99.61
The number of clients served or the number of clients or accounts that are
active at a given point of time
INFERENCE:
1. Members and Borrowers: In comparison to all 3 years from 2014 to 2016 ,
the number of members and borrowers increased gradually from 1.41 million
to 5.50 million. This is good performance for this MFI.
2. Number of Branches : The number of branches also increased from 154 in
2014 to 386 in 2016.
3. Number of cities expanded: The MFI Branches expand from 85 cities in
2014 to 197 cities in 2016. This is good for expanding their services.
4. Women Borrowers: The percentage of women borrowers are not
constant.The percentage increases from 99.61 in 2014 , it increases to 99.91
in 2015 and then decreases to 99.20 in September 2016.

4. 2. OUTREACH - DEPTH
Outreach : Depth , Signifies How Poor Are Clients !!
INFERENCE:
Since loan capita is more than 20% , so clients are better off as in 2015 year.
CALCULATIONS:
Avg outstanding balance=Gross Loan outstanding(total portfolio) / No. of active
clients*100
In(Rs. Million) March-2016 March-2015 March-2014 March-2013
Gross Loan
Outstanding
1,09,865 37,110 20,567 9,561
borrowings 96,505 37,969 19,132 8,361
Average loan outstanding/per capita GNI (2015 figure)* ~28.00 %

5. PORTFOLIO CONCENTRATION –STATEWISE (AS ON DECEMBER 31,
2016)
State/UT Portfolio (Rs. Million)
Portfolio concentration
(%)
Karnataka 18,745 15
Maharashtra 16,306 13
Tamil Nadu 24,712 20
Uttar Pradesh 15,280 12
West Bengal 5,805 5
Others (State/UT) 43,309 35
Total 1,24,157 100
• Janalakshmi Finance is one of the diversified player in terms of geographical
presence; as on December 31, 2016, the company’s operations covered 226
districts across 19 states.
• Single state concentration (Tamil Nadu) remains at 20%.
• Top two states (Karnataka & Tamil Nadu) and top three states (Karnataka,
Tamil Nadu & Maharashtra) accounted for about 35% and nearly 48% of the
total AUM respectively as of December-2016

6. 3. COLLECTION PERFORMANCE OR REPAYMENT
OF LOANS
 Portfolio At Risk :
PAR (x days) = Outstanding principle balance of all loans past
due more than x days / Outstanding principle balance of all
loans.Month/Year (ASSET
QUALITY)
Regular (%) PAR> 30 days (%) PAR> 60 days (%) PAR> 90 days (%)
Mar-16 99.27 0.49 0.37 0.28
Sep-16 98.39 0.95 0.68 0.51
Nov-16 79.45 1.59 1.01 0.72
Dec-16 68.56 12.87 1.34 0.80
Jan-17 62.47 22.58 11.01 1.14
• While JFSL historically reported on-time repayment of nearly 99% which was in
line with industry trends, its asset quality has deteriorated sharply post
demonetisation.
• The PAR>30 days has increased to over 22% as of Jan-17 from nearly 0.5% as
of Mar-16.
• Likewise, PAR>60 days too remains high at >11% as of same date.

7. REASONS FOR INCREASE IN PAR AND DECREASE IN
COLLECTION EFFICIENCY AFTER NOV -16 (POST
DEMONETIZATION):
1. Ban on high-value currency impacting
immediate liquidity required for meeting debt
repayment & other household obligations
besides a sharp reduction in cash flows from
income-generating activities as a result of
stagnation in economic activities led by the
cash crunch.
2. Moreover, loans to MFI borrowers are
disbursed in cash; low availability of liquid cash
in the post-demonetization period led to a
sharp decline in loan disbursements compared
to monthly average disbursals during April-

8. PAR YEAR-WISE COMPARISON
Unit Mar-16 Mar-15 Mar-14
Portfolio at Risk (>30 days) % 0.49 0.92 0.61
0.49
0.92
0.61
PAR (>30 DAYS)
16-Mar
15-Mar
14-Mar
INFERENCE:
For March 2014 and 2015 , PAR is higher so the performance was not
good but in March-2016 , PAR is reduced to 0.49, it means loan paid
timely.

9. WRITE-OFF RATIO
INFERENCE:
• Net write-off / avg loan outstanding ratio is more in 2016
compare to 2014 and 2015, so MFI has to improve performance
in this regard.
Net write-offs/Average loan
outstanding
0.54 0.42 0.14 0.57
2016 2015 2014 2013

10. 4. FINANCIAL SUSTAINABILITY(PROFITABILITY)
 The common measure of profitability are
Return on Equity(ROE) and Return on
Assets(ROA).
 ROE=After tax profit / starting equity
 ROA= After tax profit / starting average
ROE is the amount of net income returned
as a percentage of shareholder’s equity.
ROA is an indicator of how profitable a
company is relative to its total asset.

11. FINANCIAL SUSTAINABILITY CONTD…
Unit Mar-16 Mar-
15
Mar-
14
Return on Assets (ROA) % 1.96 2.02 2.84
Return on Equity (ROE) % 14.41 9.69 14.43
INFERENCE:
1. ROA decreases from march 2014 to March 2016. so its not profitable to
MFI.
2. ROE decreases from march 2014 to march 2015 but increases gradually
by 5 % in march 2016 . So it is good for the MFI.

12. 5. EFFICIENCY
Unit Mar-
16
Mar-
15
Mar-
14
Operating Expense Ratio (OER) % 8.31 7.59 7.87
Personnel expense ratio 3.58 3.32 3.68
Administrative expense ratio 4.73 4.34 4.32
Efficiency is measured by operating expense ratio.
OPERATING EXPENSE RATIO = personal and administrative expenses /
Period average gross loan portfolio
• Gross loan portfolio (Administrative expense ratio) means the total
outstanding (not yet repaid) amounts of all loans.For an MFI that
provides voluntary savings,average total assets could be used as
denominator.
• So increase in % of OER says that MFI should decrease both of
expenses and gross loan portfolio.

13. 6.SOCIAL INDICATORS FOR PERFORMANCE
Human resource and
productivity indicators as on
end
Unit Sep-16 Mar-16 Mar-15 Mar-14
Total employees No. 13,424 9,441 6,257 3,678
Field officers (FOs) No. 8,321 6,453 6,099 3,545
Women employees No. 2,764 1,790 1,235 437
FO/Total employees % 62 68 97 96
AUM/FOs Rs. Mn 15.26 17.02 6.19 5.79
AUM/Borrower Rs. 23,095 23,773 16,128 14,560
Disbursement/Borrower Rs. Mn 10,063 33,092 21,973 -
AUM/branch Rs. Mn 329.07 320.20 161.28 133.31
Borrowers/FOs No. 661 716 384 398
Borrowers/branch No. 14,249 13,469 10,000 9,156
Women employees/Total
employees
%
21
19 20 12
INFERENCE:
1. Total employees, field officers and women employees are increasing from
2014 to 2016 . So it is good indicator.
2. Borrowers per branch is also increasing.

14. SOURCES FOR THE DATA.
1.CRISIL Comprehensive MFI Grading
Janalakshmi Financial Services Limited
2. Janalakshmi website
3. Annual Reports
4. Measuring Results of Microfinance
Institutions PDF performance indicator by
Richard Rosenberg.