Microfinance

Ujjivan achieves 69% loan portfolio and 49% profit growth in 2010-11

Despite a challenging year for the microfinance sector, Ujjivan Financial Services has recorded a profit growth of 49% over the previous year. It’s Profit Before Tax (PBT) stands at Rs.17.72 Crores with a post-tax profit of Rs.11.41 Crores in the fiscal year 2010-11.

ujjivan results 2011

Ujjivan Financial Services – Result highlights:

  • Income growth of 86% over last year
  • Loan portfolio up by 69% to Rs.625 Crores
  • Repayment rate at a robust 98.91%
  • Portfolio at risk (PAR) above 30 days stands at 1.03%

Ujjivan has expanded its presence from 230 branches to 351 branches across 20 states while its customer base grew by 60% to nearly one million. Samit Ghosh, Managing Director said, “Despite the sector passing through a tough phase since October, we received fresh funding during this period from financial institutions in India & abroad, and maintained our portfolio quality. We continue to serve our customers, emerging stronger from the crisis.”

The Company’s current year financials include a provision of Rs 3.79 Crores. This is based on a voluntary graduated scale increasing from 0.25% provisioning for standard assets to 100% for over dues greater than 180 days. “Although we have no exposure to Andhra Pradesh, we will continue to follow provisioning norms that are significantly higher than the regulatory prudential norms of RBI”, said Mr. Ghosh.

Ujjivan has also made the following announcements to its stake holders:

  • For the second year in a row, a token dividend of 2% subject to shareholders’ approval.
  • Budgeted Rs.63.50 lakhs towards continuing the highly successful Social Development Program to serve the communities where branches are located. Last year Ujjivan spent over Rs.25 lakhs primarily towards welfare support for children in state government-run anganwadis.
  • Employees to receive statutory and performance bonus.

Ujjivan is also one of the first MFI’s in India to announce compliance with the new RBI norms on the interest cap, processing fees and discontinuance of security deposit on new loans to customers funded under priority sector borrowing from banks.

It has also launched a major financial literacy program to educate its customers on dangers of over borrowing, ‘ghost lending’ and managing their finances in a responsible manner. “We can overcome the current crisis only by jointly working with our customers to resolve the problem of over borrowing and over extension of credit”, Mr. Ghosh concluded.

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