Swadhaar FinServe Pvt Ltd (Swadhaar), headquartered in Mumbai (Maharashtra), is among the earliest to come up with initiatives aimed at providing financial services to India’s economically active urban poor. Prior to launching Swadhaar, the promoters set up a non-profit entity, Swadhaar FinAccess (SFA), in 2005. Although Swadhaar’s founders began microcredit activities under SFA, the organisation transferred its lending portfolio to Swadhaar in 2008.
SFA now focuses solely on credit-plus products and services, including financial education, insurance, and savings facilitation. Swadhaar had loans outstanding of Rs.145 crore as on September 30, 2013, spread across 40 branches in Maharashtra and Gujarat. Swadhaar has also extended its reach by opening branches in Madhya Pradesh and Rajasthan.
Performance on key parameters
- The portfolio outstanding and borrower base have grown at CAGRs of 80 and 52 per cent respectively during the 3 years ended March 31, 2013. Operations are concentrated in Maharashtra and Gujarat. However, in order to diversify operations, the company has opened branches in Madhya Pradesh and Rajasthan
- Asset quality has improved with reduction in individual loan portfolio; the 30+ dpd reduced to 1 per cent as on March 31, 2013 from around 3.5 per cent. However, ability to replicate processes and maintain sound asset quality in new geographies while improving portfolio diversity will be critical
- Has relationships with nearly 12 banks and financial institutions. Also raises funds through securitisation regularly
- Capitalisation is adequate for current and planned scale of operations, with net worth of Rs.47 crore and gearing of around 2.4 times as on September 30, 2013
- The earnings profile is modest though improving; the return on managed assets increased to 0.9 per cent during 2012-13 from 0.6 per cent during 2011-12