The document summarizes the business plan of Bihar Development Trust, a microfinance startup in Bihar, India. It aims to adapt successful models like Grameen to provide affordable credit and savings services to underserved communities. In its first year of operations, it formed 31 groups with 155 members and disbursed loans totaling $367,000. It plans rapid geographical expansion across Bihar to reach over 6 million potential microfinance clients and create employment and economic opportunities.

1. SAMVRIDHI (Growth with Equity) BIHAR DEVELOPMENT TRUST (start up) Srijan Microfinance Business Plan Competition Final Round Presentations, July 3 rd , 2008 Please insert your logo here

2. Bihar Development Trust- Introduction The concept is to implement the successful economic models of GRAMEEN MODEL and AMUL in context of Bihar to bring wealth of common people of Bihar. Our idea is to incubate and nurture each business idea as a non government organisation and scale up by changing the legal form into various non profit and for profit organizations which are best suited to raise capital and offer best way for wealth creation to clients and employees. Create wealth by listing the initiatives on share market.

3. Areas of Operation Please insert your logo here

4. Areas of Operation Please insert your logo here

5. Areas of Operation Please insert your logo here v

6. Overview Entrepreneur’s profile Business Proposition Financial Analysis Management and Human Resources

7. Entrepreneur’s Profile Please insert your logo here Entrepreneur Entrepreneur NAME RAVI CHANDRA DEV KUMAR DUBEY DESIGNATION MANAGING TRUSTEE EXECUTIVE TRUSTEE QUALIFICATION BDS( MANIPAL), MBA (IRMA) BA, MBA (IRMA) LOCATION Patna Bhagalpur PAST ORGANISATIONS FOUNDATION OF ECOLOGICAL SECURITY, UDAIPUR LIFE, RAJKOT CARE INDIA, JAIPUR TATA AIG LIFE, LUCKNOW AAROHI, NAINEETAL EMPLOYEE PROVIDENT FUND ORGANISATION, MINISTRY OF LABOUR, MUMBAI DISHA, BHAGALPUR PAST EXPERIENCE Community mobilization, NGO administration, Monitoring & Evaluation, Rural Distribution channel Management, Programme Management, Training Accounts Officer, Monitoring EPF related issue of more than 100 corporate organisation SHG Bank Linkage in Bhagalpur CURRENT ROLE Networking Communication Resource Mobilization Documentation Training Strategy Formulation Monitoring day to day operations HR, MIS Local liaisoning Training Strategy Formulation

8. BIHAR DEVELOPMENT TRUST TEAM NAME Designation Qualification Location Past Organisation Past Experience Current Role Mr. Kundan Kumar Branch Manager BA, PGRD Bhagalpur AWARD, KANPUR TATA AIG LIFE , JAUNPUR Microfinance , SHG Bank linkages , Rural Sales Managing Branch Operations, Risk Assessment, Collection & Recovery Mr. Anand Kumar Credit Manager Graduate Bhagalpur ICICI BANK CREDIT CARDS, DELHI Collection & Recovery Credit Appraisal, Group verification & Loan disbursement Mr. Santosh Upadhyay Volunteer BCA Patna NA NA MIS & office administration Mr. Rajesh Sinha Volunteer MA,MBA Patna BOB CARD, JODHPUR GE MONEY, JABALPUR Managing Branch Operations, Business Development, Risk Assessment, Collection & Recovery, Promotional activities, Agency & Sales Force Management Inputs in Improving System & Processes, Mr. Diwakar Vats Volunteer MBA( IMI) Patna TEMPLE REAL ESTATE MARKETING Managing Patna Operation

9. Business Proposition

10. Business Concept Identified Problem Access to Financial services like credit, saving, insurance in Bihar High cost of financial services Solution through SAMVRIDHI, Microfinance initiative of Bihar Development Trust Provision of credit & Saving services by adapting to GRAMEEN Model Low interest rates Joint Liability Group- women only Loan for economic purposes, savings is promoted

11. Products Please insert your logo here Business Loan Emergency Loan Midterm loan Interest Rate ( Flat) 18% 18% 18% Processing Fees 2% 2% 2% Minimum Amount 1000 1000 1000 Maximum Amount 8000 2000 4000 Repayment Period 52 weeks 52 weeks 52 weeks Mode of Repayment Weekly Weekly Weekly Eligibility Criteria Saving up to 4 weeks Saving up to 10 weeks Regular Repayment till 26 weeks Amount in Next Cycle Double the Loan Amount Same 50% of loan amount

12. Services Credit- Individual lending in JLG Savings- Through Saving box concept Life Insurance- Birla Sunlife life insurance Financial Literacy- Going On Proposed General Insurance Market Linkages- Silk & Vegetable Remittances

13. SWOT Analysis Strengths Professional & committed Management Passionate for changing Bihar image Well defined product, target audience, geography Technology support Support of highly qualified and networked professional in microfinance sector Social capital Weaknesses Lack of experience of promoters Lack of grant/equity capital Capacity building Threats Law and order environment Political environment Natural and man made disaster like flood Regulatory environment Opportunities 85% rural population Untapped market Huge market potential Abundant human resources Agrarian economy Non availability of Education, Health and Financial services at low cost to poor people People willing to pay for better services

14. Internal Control System Standard Operating Procedure - Manual in place MF & Accounting software – FAMIS and Tally Internal audit & external audit All payments through vouchers, daily summary sheet preparation Budgets, projections, daily updates in place Triple check – two at field, one at Office – before credit advancement Extensive Borrower’s database, repayment MIS Surprise Visit by Branch Manager/ Top Management Negative incentives for field officer in case borrowers default on loan Adverse credit rating for defaulting groups for next cycle of loan Financial details & updates on www.bihardev.pbwiki.com

15. Risk Management MICRO Women members belong to same economic and social class Credit Check Evaluation of repayment capacity of women borrower Four week of mandatory Savings Mandatory pledge Joint guarantee by other four members Staggered loan disbursement MACRO Portfolio diversification Geographical Profile/ Sector wise <30% portfolio in any one geographical area/ sector Growth in line with fund availability Activity diversification

16. Current Geographic Outreach Please insert your logo here District Bhagalpur Patna BLOCKS Jagdishpur Nathnagar Navgachiya Bhagalpur Urban Bikram Naubat pur Kankarbagh VILLAGE Makhna Noorpur Sadhupur Mandroza Kanpa Fatehpur Ashok Nagar Baluachak station Sabji mandi Adampur Saidabad Baliyaban Puraini Tamauni Barari Nisarpura Harpura Shaino Belgachi Jwaripur Lakh Nisarpura Desri Gourachakki Sarai Sahar Rampur Kharauni Badarpur Rainpur Guddi Pawwatoli Kumhrath Badi goddi Kajraili

17. Forecasted geographical outreach FY 2009 FY 2010 FY2011 FY 2012 District Block s District New Block s New District New District Bhagalpur Jagdishpur Bhagalpur Kahalgaon Banka Saran Akbarnagar Pirpainti Khagaria Buxar Nath Nagar Gopalpur Katihar Siwan Sultanganj Sonahaula Samastipur Munger Bhagalpur Urban Shahkund Begusarai Sheikhpura Navgachiya Patna Bihta Vaishali Lakhisarai Patna Naubatpur Masaurhi Bhojpur Madhepura Bikaram Fatuha Muzaffarpur Kishanganj Patna Urban Khagaul Purnia Araria Maner

18. Target Market Bihar 37 districts 500 developmental blocks. More than 90% people live in rural area . Potential of 6 million clients 80% of population can come under microfinance clients category Highly underfinanced geography In 2004, one bank branch for 23,248 people in Bihar as against the national average of one bank branch for 15,000 people. Bihar needed to have 500 more bank branches to reach the national average. 37 blocks in Bihar's 38 districts have no branches of any commercial bank at all in 2007. 800 bank branches in Bihar have just one officer each. Credit deposit ration @33% lowest in India Huge remittances in district like bhagalpur, supaul etc Per capita income around Rs.4000 per annum Potentail Market size of 6300 crores In future, expansion can take place in Jharkhand, Uttar Pradesh, West Bengal

19. Customer Base More than 1.2 million families as per census 2001 80% of family can come under microfinance BORROWERS PROFILE Vegetable & fruit Retailers Kirana Dukan ( Small general Stores) Dairy Sweet Shops, Egg shops, tea shops etc Rikshaw pullers Farmers Vendors & hawkers Small furniture shop Silk weavers Others Potential of more than 6 million clients in Bihar Patna -400,000 borrowers Bhagalpur- 200,000 borrowers

20. Competitor Analysis Please insert your logo here Name of the Microfinance player Estimated Borrowers Estimated Portfolio in millions of Rs. Geographical Presence Growth Plans in 2009 (No of Borrowers) Constrains SKS 100,000 1000 14 districts 400,000 Local knowledge CDOT, Nalanda 1000 5 Patna & Nalanda 10000 Management bandwidth Saija Vikas, Patna 1000 5 Patna 10000 Concentration Risk Kanchan Sewashram , Muzaffarpur 6,000 15 Muzaffarpur & Sheohar 30000 Management bandwidth Nidan, Patna 10,000 60 Patna 10,000 No serious Focus by top Management NEED, Deoghar 10,000 100 Deoghar 20,000 No serious Focus by top Management CASHPORE 50,000 300 Bhojpur 50,000 Not able to expand beyond border areas

21. Competitor Analysis New Players Estimated Borrowers Estimated Portfolio in millions of Rs. Geographical Presence Growth Plans Constrains Bandhan 10,000 100 2 districts Bengali Areas of Bihar Rapid Growth Spandana Arrived NA Bhagalpur Rapid Growth SHARE Coming Soon NA NA Rapid Growth NIRMAN Bharti Coming Soon NA NA Rapid Growth

22. Social Impact Employment creation for 1000,000 people Increase in micro entrepreneur turnover/income by 50% in two year of joining the programme 30% women participating in socio-political processes like Panchayati Raj Increased bargaining power of women Improved economic status

23. Financial Analysis

24. Current Operational Status Please insert your logo here INDICATORS FY 2007-2008 FY 2008-2009 as on 30 June, 2008 Total No of Groups Formed 31 190 No. of Groups in Bhagalpur 31 155 No. of Groups in Patna 0 35 Total Group members 155 950 In Bhagalpur 155 775 In Patna 0 175 Total Borrowers 90 300 In Bhagalpur 90 288 In Patna 0 12 Total Loan Disbursed 367,000 1,809,000 In Bhagalpur 367,000 17,54,000 In Patna 0 65,000 Total Loan Outstanding 307,103 15,03,530 In Bhagalpur 307,103 14,48,590 In Patna 0 54,940 PAR>30 days 0 7500 Repayment Rate 100% 98.5%

25. Growth Projection FY 09 Months Expected Cumulative No. of Groups Expected Cumulative No. of Borrowers Expected Cumulative Disbursement May 90 180 1,040,000 June 130 250 1,600,000 July 180 340 2,320,000 August 230 460 3,120,000 September 290 660 3,920,000 October 350 900 4,720,000 November 450 1400 7,800,000 December 600 2000 10,800,000 January 750 2600 13,800,000 February 900 3200 16,800,000 March 1050 3800 20,200,000

26. Growth Projections FY 2009 USD FY2010 USD FY 2011 USD Total Members 5,110 44,105 125,215 Number of Clients 3,750 29,945 73,415 Portfolio Size or Turnover 254,593 1,842,851 5,973,052 Portfolio growth rate (CAGR) 724% 324% Geographical coverage (number of States, or Districts) 1 state , 2 districts 1 state , 2 districts 1 state, 10 districts Number of Branches 2 13 36 Total Interest Income 32,485 285,651 1,084,058 Total Other Income 28,352 231,868 826,045 Expenses 61,237 457,748 1,457,752 PAT -400 59,771 452,351 Return on Assets 60,837 517,519 1,910,102 Total Shareholders Funds 69,767 209,302 697,674

27. Financial Ratios FY 2009 INR FY2010 INR FY 2011 INR Operating and administrative expenses/average gross turnover (%) 24% 25% 24% Profit after Tax / Gross Turnover (%) 0% 3% 8% Return on Assets (ROA) % -0.12% 2.06 5.935 Return on Net worth (RONW) % -0.57% 11% 24.94% Debt to Equity ratio 4.33:1 8.88:1 7.6:1 Debt Requirement (USD) 316,279 2,000,000 5,320,930 Equity Requirement (USD) 69,767 209,302 697,674

28. Proposed Transformation Stages Proposed Steps June 2008- June 2008 30,000,000 disbursement June 2008- Dec 2008 Strengthening of system & Process June 2008- June 2008 Concentration in Bhagalpur & Patna June 2008- Dec 2008 NBFC Search Dec 2008- Mar 2009 NBFC Acquisition, Cleaning of Books June 2008- June 2008 Capital Raising June 2009 Microfinance operation Transformed into NBFC July 2009 Microfinance operation under NBFC banner

29. Growth Projection 2015 Initiatives like vegetable, silk, , art & crafts etc. Committed management professionals drawn from pool of friends and well wishers of IRMA, IIM, XLRI, IMI, TAPMI Cumulative Disbursement of INR15,000 million 100,000 micro entrepreneurs by FY 2015 2012 2015 Clients 500,000 1,000,000 Branches 100 300 Employees 1500 2700 Disbursement (Rs. Million) 2510 6,430 Outstanding (Rs. Million) 1400 3,950

30. Management and Human Resources

31. Management and Human Resources Please insert your logo here System & Process Development Stages Standard operation Manual Operational HR manual Finalized Promotion Manual Final stages Incentive System Operational Recruitment Process Finalized Software FAMIS from BASIX purchased , training going on Finance Manual Under Development CA Firm Nirmala & Associates Legal Advisory Services LEX SOLVIS Accounting Tally , double entry

32. Organisation Hierarchy Designation Role & Responsibility Staff Strength Managing Director Networking, communication, resource mobilization 1 Executive Director Monitoring day to day operations, HR, MIS, Local liaisioning, Training, Strategy Formulation 1 Branch Manager Managing Branch Operations, Business Development Promotional activities, Team Management 2 Credit Manager Risk Assessment, Collection & Recovery, 2 MIS Manager Updating data on daily basis 2 Field Officer Group formation, Loan disbursement & collection 10 Office Assistant Filing Management , Guest management 2 Accounts Officer Feeding voucher data into tally & daily trial balance 2

33. Thank You Organisation Name: Bihar Development Trust Managing Trustee: Ravi Chandra Executive Trustee: Dev Kumar Dubey E mail: [email_address] Phone No: 9470017752, 9431609939

34. Loan Disbursement Process Group Formation Four week mandatory saving Mandatory Signature Submission of Personal information sheet by field officer Credit manager visit to the group House verifications Member verification Informal Third party verification Loan appraisal form submitted by field officer Income expenditure analysis of household Recommendation by credit manager Disbursement of loan to one member Repayment begins from next week Based on repayment, other members get loan one by one