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Sarala Development & Microfinance Private Limited

Annual Report 2016 – 2017 Empowering Women through Sustainable Finance

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Introduction :

Sarala was first established in 2006 as a not for profit entity,

constituted under Section 25 of the Indian Companies Act

1956, under the name of “Sarala Women’s Welfare

Society” (SWWS). The purpose for setting up the

organization was to provide Microfinance and other related

welfare services to women in the state of West Bengal,

India. Co-promoted by Dr.Arabinda Sinha, a retired

professor of Physiology of the New Jersey School of

medicine, USA, and Pranab Rakshit, a finance professional

based in Kolkata, SWWS modelled its operations on The

Association of Social Advancement, Bangladesh (ASA).

The co-promoters visited, received orientation in

Microfinance from ASA as well as technical inputs for

commencing operations in the state of West Bengal India.

In 2010, SWWS acquired a Non-Bank Finance Company

(NBFC) called Unnati Trading and Fincon Pvt. Ltd. The

entire Microfinance business of SWWS was transferred to

Unnati against 94.5% equity. This company was registered

as an NBFC-MFI in 2014 and as of September 2015, it

changed its name to Sarala Development and Microfinance

Pvt. Ltd. (SDMPL or Sarala).

As on March 31, 2017, Sarala served its 1,33,259 clients

through its own network of 66 branches spread over 930

villages in 20 districts covering three eastern Indian states

of West Bengal, Bihar & Assam.

A fresh ‘NBFC-MFI’ Registration Certificate in the name of Sarala Development & Microfinance Pvt. Ltd was recently issued by

the Reserve Bank of India on January 22, 2017.

RBI Registration Certificate:

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Mission:

Our Mission is to catalyze empowerment of sustainable women micro-entrepreneurship in under-privileged families across India through the provision of relevant financial services

Vision

Our Vision is to be a world class

organization in the field of

Microfinance admired for building

trusting relationships with our

clients, employees, financial

partners, while delivering

measurable social impact.

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Our Lenders

Number of Lending Banks

(2016)

Number of Lending Banks (2017)

State Bank of India State Bank of India

UCO Bank UCO Bank

Vijaya Bank Vijaya Bank

Indian Overseas Bank Indian Overseas Bank

IDBI Bank IDBI Bank

Union Bank

Syndicate Bank

Bandhan Bank

Yes Bank

Bank of Barod

Number of Financial Institutions 2016

Number of Financial Institutions 2017

MAS Capital MAS Financial Services

Reliance Capital Limited Maanaveeya Development & Finance Private Limited

Reliance Home Finance Jainsons Finlease Limited

Religare Finvest Limited Religare Finvest Limited

Maanaveeya Development & Finance Private

Limited

Reliance Finance Limited

Capital First Limited

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Contents:

Board of Directors

Core Management Team

Our Statutory Auditors and Partners

Message from the desks of the Chairman and the Managing Director

Organogram

Shareholders of Sarala

Our Journey towards Growth

Outreach

Product and Services

Customer Services & Governance

Success Stores

Others Activities/Achievements

Energy Lending Initiative

Statutory Reports & Financials

Directors Report and statutory disclosures

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Board of Directors:

Dr.Arabinda Kumar Sinha Chairman A US - based Non-Resident Indian and US Medical College professor having extensive experience in

managing development projects in India, with a good command of planning and execution of development projects in a sustainable manner.

Mr.PranabRakshit, Managing Director

A Master in commerce having a long experience in the field of Finance and Accounts in different corporate houses. He is currently on the Board

of SA-DHAN, one of the Self-Regulatory Organizations for Microfinance Institution in the country and Secretary, AMFI-WB an Association of

Microfinance Institution of West Bengal.

Mr.Kuntal Banerjee, Executive Director

Post Graduate Diploma in Financial Management, having wide experience working with Banks and Financial institutions for more than 16 years.

Mr.Biswa Bandhu Mohanthy, Independent Director

A career Banker and post- graduate in Political Science, retired as Chief General Manager, NABARD. Wide ranging experience in microfinance

operations and rural development in India and abroad, visited 15 countries in connection with various study visits, training programs and

assignments, currently associated with studies concerning the strengthening of microfinance activities in India as well as countries in Africa.

Mr.Ganesh Chandra Modak, Independent Director

An experienced Microfinance Practitioner for more than 20 years in West Bengal and Bangladesh. He is the CEO of Society for Model Gram

Bikash Kendra, a reputed and successful NGO engaged in microfinance activities for more than 11 years in West Bengal

Mr. GautamMukhopadhyay, Nominee Director

A Honours Graduate in Science, a former Asst. General Manager, State Bank of India having served in important assignments like Asst. General

Manager (Advance Monitoring Cell), Asst. General Manager (Centralized Credit Processing Cell) and Regional Manager of 42 branches under his

control.

Mrs. Setu Das Roy , Independent Director

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Practising Law on Company, Contract, Civil, Land matters, Banking, Property Documentation & Due diligence, Sales/lease deeds, and Labour Law

at the Hon’ble High Court , Calcutta . 13 years of experience including Arbitration matters In addition, Market & Business Analysis & reports

preparation for Management, Founder of a Non-Profit Organization named as Association for Benevolence of Children Development.

Core Management Team

S.N Name Designation Qualification Experience Department

1 Manab Sen Head of Finance,

Corporate Finance

Officer

Alumni Indian

Institute of

Management

Ahmedabad,

Bachelor Degree in

Advance

Accounting &

Business, CAIIB.

More than 40 years’ experience

predominantly in Banking and

Financial Services, including Private

Equity Management, and Cross

border M&A. Manab has

successfully worked in 6 start-up

situations, leading companies to

successful IPOs or other exits. His

role includes sourcing financial

resources, managing a team of 4

finance professionals in the finance

team, advising on strategy as well

as implementing Sarala’s

Capitalization plan

Finance

2 Subrata Singha Head of Operations MBA More than 10 years experience in

corporate including Microfinance

dealing with credit , risk

perspective & other Financial

issues

Operations

3 Kavi Ratan Dasgupta General Manager

HR

MSW, Post

Graduate in

Management

Ex Additional General Manager in

Powergrid Corporation of India. 35

years in HR & Administration

Human Resource

Department

4 Rohit Kumar Singh Company Secretary ACS, M.Com, LLB 3 Year experience in Microfinance

Compliance &

Supervision

5 Soumyendu Sett Deputy Manager

Finance

B.Com 17 years in production industry&

10 years in Microfinance

Finance

6 Joydeep Sarkar Deputy Manager

Finance

MBA 4 years in Insurance Sector and 8

years in Microfinance

Finance

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Tapesh Ghosh Deputy Manager HR B.Com

12 years in corporate & 8 years in

Microfinance

Human Resource

Department

8 Sweta Hazra Accounts Manager CA (Inter) 7 years in Microfinance Accounts

9 Pintu Mondal Senior Accounts

Executive

B.Com 12 years in Accounts & Finance Accounts

10 Amit Banerjee Deputy Manager

Systems & IT

MBA-IT

(Microsoft Certified

Professional)

8 years as system administrator Systems & IT

11 Subham Hazra Accounts Executive MBA 5 years in Microfinance Accounts

12 Chinmoy Bhanja Deputy Manager

Operations

B.A 10 years in Microfinance Operations

13 Sujit Bandyopadhyay Asst. Manager IT MSC – IT 6 years in computer training as

faculty member

Systems & IT

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Sk.Maddassar Hossain

Wasri

Deputy Manager

Audit MBA – Finance

11 years experience in Managing

Finance, Operations, Training,

Cooperative & Microfinance Internal Audit

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Our Statutory Auditors :

M/s. S.R. Batliboi & Co. LLP, Audit Firm (Firm Registration No. 301003E) also known as E & Y,

one amongst the BIG FOUR Audit Firm, situated at 32 Camac Street, 3rd Floor, Block C, Kolkata-

700016, were appointed as the Statutory Auditors of the Company in the 24th Annual General Meeting of

the Company held on 03rd August 2016 to hold office from the conclusion of the 24th Annual General

Meeting for term of consecutive five years till conclusion of the 29th Annual General Meeting, subject to

ratification of the appointment by the members at every Annual General Meeting.

Association Memberships:

Sarala is a member of SA-DHAN, a

recognized Self Regulatory Organization (SRO)

by the Reserve Bank of India.

Sarala is also a member of AMFI-WB, a state

level association of Microfinance Institutions in

West Bengal.

Insurance Partners:

SARALA has tie-ups with Life Insurance Corporation of India (LIC), Housing Development Finance

Corporation Ltd Life and Dewan Housing Finance Corporation Ltd for providing life insurance coverage to

all clients of Sarala along with their spouse or guarantors. Presently over 266,518 lives are covered with

the insurance companies. The sum assured is equal to the amount of loan given by SARALA.

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Message from desks of the Chairman and the Managing

Director

Dear Readers,

We are happy to note that during last year Sarala Development &

Microfinance Private Limited was able to provide small business

capital to 15% more women than in the previous year (115,582 in

the year 15-16, 133,259 in the year 16-17). Demonetization

somewhat slowed down this expansion. By the end of this current

financial year, we hope to double the number of women that Sarala

serves now. I hope, part of this increment comes from serving

women who are slightly below the economic level that we are

serving now. I also hope, that part of this increment will come by

forming groups few kilometres away from the economic growth

centres in the district, sub-divisional and railway station towns.

Our borrowers: We realize that providing some capital for income

generation is not the panacea for reducing poverty. Together with

health, nutrition, and education, one has to pay attention to

livelihood training and market linkage. I hope, our effort to create

village level entrepreneurs will be further intensified. The

introduction of high volume loans to some chosen few “fast

growers” is a step towards the right direction. At the same time, we

have to be extremely careful that we do not increase our borrower’s

indebtedness. It is unfortunate that we cannot promote savings by

taking saving deposits from our borrowers. Towards the end of

borrower’s asset creation, we are planning to introduce high-value

cottage industries like fresh water pearl culture, Red Sandal wood

planting, and hardwood (Teak, Mahogany) tree planting.

Our staff: I hope, the Sarala board members and senior managers

share my sentiment that each of Sarala staff is like my brother or

sister. Let our staff own Sarala. Let us initiate a process so that staff

members are given optional shares of Sarala for part of their

bonuses. Together with the ultimate benefit of our borrowers and

well-being of Sarala, I would like to pay attention to the personal

career development of each of our staff. Many of us take initiatives

for self-improvement others need some nudging. Let us require

some initiative for self-improvement for assigning bonuses.

We now have a Board approved Succession Plan for our senior

management. I urge the management to quickly translate that Plan

into action.

Our governance: I am happy to note the broadening of Sarala’s

Board, formulating, recording and disseminating various policies

required by the regulators and forming various frequently meeting

board committees. I hope, the current board and the Management

will focus on recruiting few other female board members. Let us

recruit one of our borrowers into Sarala board. If we must conduct

Board’s business in English then a non-English speaking member

may be provided with a personal translator.

Future direction: Coupling income-generating capital with

means of savings is a better way for providing economic support.

Towards that end, in the future, Sarala is planning to apply to

become a deposit taking small bank.

With Best Wishes,

Chairman Managing Director

As you have done in your recently shared Annual Report in the same format, its

perfectly ok. It should come in one page as it has been done by you appropriately.

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Organogram :

Systems & IT

( Chief of IT)

Executives

Corporate Finance (

Chief of Corporate

Finance)

Internal Audit

(Chief Internal

Auditor)

Deputy

Executive

Officer

Compliance &

Supervision (

Company Secretary)

Executives

Executives Executives

Divisional

Managers

Executives

Area

Managers

Credit

Officers

Board of Directors

Managing

Director &

CEO

Finance ( Chief of

Finance/ CFO)

Operations ( Chief

of Operations) Executives Human Resource (

Chief of HR)

Accounts (

Chief of

Accounts)

Branch

Managers

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Shareholders of Sarala:

Sl.No Name of Shareholder

Total No of

Shares as on

March 31,

2017 Value/share Total Value (Rs.) % of Holding

1

SARALA WOMEN WELFARE

SOCIETY 12,371,760 10 123,717,600 94.50%

2 SARALA HEALTHCARE PVT. LTD. 576,000 10 5,760,000 4.40%

3 PRANAB RAKSHIT 113,480 10 1,134,800 0.84%

4 ARKA MUKHERJEE 16,000 10 160,000 0.15%

5 SUBHAYAN SINHA 8,520 10 85,200 0.07%

6 KUNTAL BANERJEE 6,000 10 60,000 0.05%

TOTAL (INR) 13,091,760 10 130,917,600 100.00%

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Our Journey towards Growth:

Particulars March 2014 March 2015 March 2016 March 2017

Borrowers 19,478 51,427 115,482 133,259

Groups 1,198 3,628 6,760 8,495

Branches 12 43 65 66

Staff 62 228 320 364

Assets under

Management

(Rs.in Millions) 84.25 421.26 1169.85

1637.90

On time

Recovery Rate 99.98% 99.98% 99.91%

99.03

Loan Liability

(Rs. in Millions) 29.16 86.46 479.68

990.76

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Particulars

Earning Before

Taxes(EBT)/Revenue%

Return on Average

Assets (ROAA)%

Return on Average

Equity(ROAE)%

Portfolio at

Risk (PAR)>90

days %

2013-14 Audited 49.77% 7.78% 10.65% 0.17%

2014-15 Audited 35.92% 4.91% 8.35% 0.03%

2015-16 Audited 34.21% 6.03% 18.52% 0.10%

2016-17 Audited 30.33% 5.42% 25.44% 0.91%

Particulars March 2014 March 2015 March 20116

March 2017

State 1 2 3 3

District 13 14 18 20

Active Loans (Rs.in

Millions) 83,652 76,574 115,482

133,259

Portfolio at risk > 90 day 0.16 0.04 0.10

0.79

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Outreach:

We are presently operating in the 13 Districts of West Bengal, 4 Districts of Bihar &

3 Districts of Assam. The geographical outreach can be summarized is presented hereunder

West Bengal: Assam

Bihar:

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Product and Services:

Our present Loan product Details of Sarala Development & Microfinance Pvt. Ltd

Parameters Product 1 Product 2

Name of Product New Bi-weekly BC- Weekly

Effective status 01.04.17 To Till Date Since inception to till date

Rate of Interest 23.50% p.a. 23% p.a.

Moratorium 14 Days To 27 days 7 Days

Repayment

Frequency 14 Days (Fortnightly) Weekly

Loan Amount Rs. 15000, 18000, Rs.20000 Rs.15000, 18000, Rs.20000,

Rs.25000

Processing Fees 1% Nil

Service Tax[1]

As per Rate applicable- On Processing

Fees Nil

Insurance Fees 0.5% (coverage for borrower and

guarantor/nominee)

0.5% (coverage for borrower and

guarantor/nominee)

Interest

Calculation Diminishing method

Purpose Income generation Activities

Customer Service & Governance:

Being one of the growing Microfinance Institution, Sarala has always believed in client protection and fair

lending practices. Hence we have invested significantly on financial literacy programs, customer

awareness on fair practices code, education on ill effects of multiple borrowing, avoidance of order-

indebtedness, importance of maintaining a healthy credit history, issues relating to ghost lending and

safety of customer information. We have also trained all our frontline staff on fair practices code,

transparency, respectful treatment of customers, and grievance redressal mechanism, Sarala follows all

guidelines issued by Reserve Bank of India (RBI) on Fair Practices Code for NBFC-MFIs and has also

adopted Industry Code of Conduct developed by MFIN (Microfinance Institution Network).

Customer Retention Programs

Sarala has been maintaining a satisfactory customer retention rate and observed an increase of 5% in

2016-17 compared to the previous year despite adverse impact on our operations due to demonetization

and increased credit bureau rejection rates.

Year

Overall Retention Rate

(%)

2014 94

2015 90

2016 86

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Customer Grievance Redressal

Sarala has adopted a well-structured Customer Grievance Redressal Mechanism and provides customers

reliable and easily accessible interface for timely and fair resolution of enquires & complaints. Our Board

approved policy on customer grievance redressal aims to minimize the instances of customer complaints

through proper service delivery and review mechanism.

Customer Helpline No.

Customer Helpline No is one of the important way of solving enquiries and grievances. The help desk

ensures that all complaints are tracked, resolved and if required, escalated on a timely basis.

Grievance Redressal Officer

The Board has appointed a Grievance Redressal Officer who is responsible for ensuring timely resolution

of all complaints received through helpline no.

Customer Enquiries and Complaints received & resolved during the year 2016-2017 in different

quarters are specified below:

Financial Year 2016-17

(Quarter wise details)

Total Complaints Received Complains Resolved till March

31, 2017

April – June (Q1) 129 129

July – September ( Q2) 40 40

October – December (Q3) 216 180

January – March (Q4) 86 50

2017 91

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Our Assessments:

For the financial year 2016-17 CARE rating had

assigned the long term credit rating to the

Company as BBB- for Rs. 100 Crores Portfolio.

The Management is hopeful that the ratings will

improve in near future and the Company would

be able to access resources at a more

competitive prices. Further, Sarala has obtained

"BWR MF3" grading from Brickwork indicating

the MFI's ability to manage its operations in a

sustainable manner. Your Company has also

undergone the Code of Conduct Assessment

(COCA) grading exercise by ICRA obtaining “C3”

as its Code of Conduct Assessment Grade which

signifies average performance on COCA criteria.

Internal Audit:

The concept of Internal Audit has drastically

changed from a system of merely checking the

arithmetical accuracy of accounting data to a

system of appraisal of the effectiveness of risk

appraisal, operations, accounting, financial

management, human resources and controls as

an aid to management towards achieving its

goals.

The main purpose of having an Internal Audit

System in Sarala is to verify and review the

activities of all branches so as to assist them in

seeing that, the operations are being done

effectively, that current transactions are

promptly and completely recorded, the assets of

the business are properly protected and

accounted for and that the business, portfolio, is

adequately protected against waste, fraud and

loss. The purpose of this form of control is to

ensure early detection and rectification of errors

and to minimize recurrence in future. It ensures

that various rules and circulars laid down by the

Management are actually followed and acted

upon by all the Branches.

Sarala has developed a comprehensive Audit Process to cover each department processes and risk component in preparing audit processes at branch/Region/Division/Head Office. Based on the operations and monitoring parameters of Sarala, audit shall be done for following entities: Branch Office, Regional Office and Head Office

Scope of Audit

Sarala’s Internal audit broadly covers the

following:

Financial reports and records: receipts,

vouchers, cashbooks, ledgers, client passbook,

bank passbooks, cash balances.

Loan document: Loan applications, promissory

notes and other documents required as per

policy related data entered in Excel

spreadsheets or software.

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Client visits: check meeting discipline – timing,

conduct, staff and client discipline, check

passbooks interact with clients can also check

loan utilization.

Other observation: Staff disciplines, hygiene,

file arrangements and cataloguing

1.1 Independence

The Internal Audit Department of Sarala reports

functionally to The Board through its Audit

Committee and administratively to the

Managing Director/Chief Executive Officer.

Head-Internal Audit also has direct access to the

Chairman of the Audit Committee. To permit

the rendering of impartial and unbiased

judgment essential to the proper conduct of

audits, internal auditors will be independent of

the activities they audit.

1.2 Internal Audit Role in Risk Management:

Internal Audit function of Sarala focuses on the

following Risk Management perspectives during

the execution of the Internal Audit activity.

✓ Organizational objectives support and align with the organization’s mission;

✓ Significant risks are identified and assessed;

✓ Appropriate risk responses are selected that align risks with the organization’s risk appetite; and

✓ Relevant risk information is captured and communicated in a timely manner across the organization, enabling staff, management, and the board to carry out their responsibilities.

Our Status Report for Internal Audit on March 31, 2017 is highlighted below:

Sl. No. Parameters FY 2016-17

1 Total No. of Audit planned

i Branch 246

ii Head Office 8

2 No. of branches Audited

3 No. of Audits

i Regular Audit 187

ii Snap Audit 10

iii Special Audit 1

iv HO Department Audit 3

4 Audit Report Status

i No. of Audit Report Finalised/sent 178

Ii Report yet to be finalised/sent 9

Risk Management

To build a robust risk management framework

for its operations, the Board of Sarala has set up

an independent risk management committee of

the board as an effective step of mitigating

different risks, involved in the business. The

Committee has framed a risk management policy

which has been approved by the board recently.

The committee would be addressing inherent

risks and developing controls for Sarala’s

existing line of business as an MFI. The

committee has reviewed risk management

policies in relation to various risks including

portfolio, liquidity, interest rate and operational

risks, Investment policies and strategies,

regulatory and compliance issues in relation

thereto are also reviewed by the Committee.

Reporting and MIS:

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Our Information systems (IT systems) in place at

the moment comprising “SMART” and

“ERECON” provide updated information on

RE/EE and will be able to extract reports as

required by Blue Orchard for our RE/EE Loan

portfolio. These reports can be customized as

required for reporting. The Central Database is

maintained at our headquarters in Kolkata with

suitable back up.

Human Resource

At Sarala, we believe in Employee Power &

‘Employee First’ is our motto. Sarala has a

culture based on a set of core values of Integrity,

Transparency, Respect, Professionalism and

team work tied together amidst diversity. For us

it has been a journey of striving to work for the

development of our customers.

At Sarala you will see all employees share a

unified vision & purpose – the HR team has been

successfully enabling this through its initiatives.

Compensation Policy

Sarala has believed in paying its employees in an

equitable and fair manner. We endeavor to link

our rewards package to the individual’s profile,

performance and role in the organization.

Note on Demonetisation Background On

November 8, 2016 :

The Government demonetized the then existing

500 and 1000 rupee notes, effectively taking

over 80% of cash out of circulation. The new

bills were in short supply leading to restrictions

on cash withdrawal and creating a cash crunch

for the ensuing months. This had significant

impact on the microfinance sector which deals

with a borrower base that predominantly earn

their wages/incomes in cash.

Impact on the MFI Industry: The first impact has

been on the collections for the MFI Industry

which dipped to 86% from its standard

collection rate of around 99%. Consequently the

collection discipline has been derailed resulting

in higher Par & Provisions. As MFI’s were not

allowed to collect the repayments through old

notes and deposit the same in banks, this

further impacted the collections. The RBI

dispensation on classification of NPA (allowing a

further 90 days over the 90 days overdue norm

for classification as an NPA) has been

misconstrued and deemed as repayment

holidays, adding woes to the already affected

situation.

Since cash limits were common for financial

institutions and retail, no cash disbursements

were possible to a large section of MFI

Borrowers, especially new borrowers, leading to

a tremendous impact on business during the

last two month.

Impact on Sarala:

Challenges faced:

a. Demonetization led to a slow-down of

business momentum in Q3 and Q4, political

interference and rumors of loan waiver

disturbed the credit discipline among our

customers, affecting collections. Paucity of

currency necessitated reduction in business

volumes. New customer acquisition for both

group lending and individual lending business

was suspended during the period. The Company

made cash disbursements to select repeat

customers with good credit track record to

smooth their cash flow.

b. Minority concentrated area hit the most.

c. Small Businesses and Wage earners struggling

to repay

d. Political interference in Assam and Bihar

e. Small businesses and Labourers impacted due

to cash crunch in Bihar, Jharkhand and West

Bengal

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f. Loan waiver rumors in few areas of West

Bengal.

g. Impact on Business volumes: Impact on

portfolio quality. Our NPA levels saw a

significant rise due to demonetization related

over dues. Collections saw a dip and Cumulative

Repayment Rate decreased from November,

however recovered later to some extent.

The Effects of the Demonetization on

Repayment Rates from November, 2016-March

31, 2017

Cumulative Repayment Rate during

Demonetisation:

Month

Cumulative Repayment

Rate (%)

November

83

December 88

January 91

February 94

March 97

RBI dispensation on Asset Classification of over

dues originating was not considered by the

Company whereby a short-term deferment of

60/90 days could be applied to dues payable

between November 1, 2016 to December 31,

2016 for the purpose of classification of loan

accounts as sub-standard and as a result, the

provision for the year is higher by INR 1.42

Million. Excellent recovery efforts in Mar-17

increased the Repayment Rate to 97% in Q4.

Collection efficiency is likely to improve

gradually over the next few months since

external interventions have reduced & many

customers have started making repayments.

Impact of Demonetization will spill over into the

next financial year with increased credit costs.

Sarala shall follow a cautious approach towards

business in the stressed clusters to contain the

credit quality for the first two quarters of the

next year.

Initiatives taken:

i. The Company has sensitized its staff on

non-coercive collections and offered

extended repayment time for

customers, continuing a healthy

relationship with them during such

testing times.

ii. The Company offered continued service

to good customers by providing

them with repeat loans, largely in

cash wherever possible, enabling

them smoothen their cash flow.

iii. Focus on Collections: The Collections

Team focused on repayment

collections across difficult areas,

providing the much needed support

to staff. The Company distributed a

set of relevant documents with all

Field staff to enable them to

convince customers and family

members about the false rumors

and importance of repayment.

Branch wise based Action plans

were put in place, providing fulltime

support for collections while

mentoring of the branches.

iv. Focus on Cashless collections: The

Company encouraged its customers

to use the cashless payment options

such as Cheque, POS and NEFT.

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Health Care Initiative :

Since 2008, Sarala provides primary care facility to its poor clients and their entire families through its

associate concern “Sarala Healthcare Pvt Ltd.” which provides services toward the weaker section of the

society through its mobile health clinics, distribution of low-cost generic medicines, MBBS, MD, Doctors

treat the patients. Doctors move to the group sitting locations to give door –step service to the poor

women. A health card is provided to every woman, against which the clients and her family members can

visit doctor innumerable times through the period of microfinance loan provided by Sarala. They can also

come for sugar test, ECG test etc.

Village Level Entrepreneur, program was started in the month of December 2016. The objective

is to enhance the Livelihood through Core Business Support. Here Sarala is trying to help the VLEs to

make them self-employed and building entrepreneurship. Besides that Sarala is trying to increase their

income level through this program by providing them few saleable products, like Induction, Mixer

Grinder, Frying Pan, Kadai, Dish wash, Hand wash, Soap etc. which they can sell and made a little profit

from it and in future they can become small entrepreneurs. Sarala provides awareness to our VLEs, how

to save energy or the use of nonconventional energy products. We gave them product demonstration. We

distribute leaflets (product brochures), demonstration of the products, arrange seminars, training free of

cost.

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Managing Director’s deliberation with the Village Level Entrepreneur at the Head Office

Success Stories :

Self-drive from sadness to joy

Pratima Barman is a borrower of Sarala. She

and her husband Pritu Barman live with their

two children in a village called Pathan Para,

Cooch Behar District of West Bengal. Their

occupation was daily wage labourers.

“I am glad that, I came across Sarala, because

now I have my own business, and my kids are

getting a good education.”

“We were daily wage labourers. During the

seasonal time of work, we could manage

somehow our daily expenses; but during off

season there was no work for us. It was very

difficult for us to have two meals daily. We were

unable to give good education to our children.

My situation was getting worse. Those were the

most poverty stricken days in our life; I was

helpless and worried about my children’s

education and upbringing. The times when we

need help the most, are the times when you see

the real pain of not having the help you need.

During one such time, Sarala was providing

support to my nearest village, and I heard about

the support they were providing. I came to Sarala

office, and spoke to the Branch Manager, about

what I heard regarding Sarala and enquired on

how it works. Then I applied for a loan of

Rs.20000/- to open a grocery (Mudikhana) shop.

My loan was approved from Salara Haldibari

branch on 25/02/2015. By that loan, I started a

Grocery shop, and now I am very stable. Now I

don’t go for daily wage labour anymore. My

elder daughter is studying in class six and my

younger son is studying in class four. I want to

take more loans to start a big shop and increase

my business. It is because of Sarala today; I can

feed my children and take better care of my

family by trying to give them a better life.”

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AKHIRA BIBI’S STORY

Akhira Bibi is a borrower of Bethuadahari

branch. She lives with her husband and with her

two kids, one daughter and one son in Tetulberia

village. She is our borrower since past four

years.- Nadia, West Bengal.

“I have one prayer to Sarala, that when I was in

need, helpless and suffering from poverty and

distress, there was no one to help us, Sarala has

freed us from all of that grief and made me

financially stable and independent so that I can

take better care of my family. There are many

people who suffer from the same pain every day,

especially the women folk in the village like us,

please do come forward and do the same for

them.”

“Some time ago, one of Sarala's Employee, came

to visit our Home, and asked me, what did you

do with the loan which Sarala has given to you?

When I heard that, I swooned for a moment, and

I remembered the very first time when I heard

about Sarala. It was one evening; I was standing

with my neighbours, to take water. During that

time two strangers came forward and asked me

and my neighbours – can we talk with you? I

was feeling shy, like others village women, and

spoke to them and came to know about Sarala

and its work.”

“Due to poverty and needs, without any

hesitation, I told them to come the very next day

in the evening. Poverty was the only friend at

that time, the thoughts which reeled in my head

were-have to repay the loan, which I took from

Mahajan or the money lender, have to educate

my children, have to fix the house, thinking all

those circumstances, I could not sleep that night.

Next day I spoke to 12-15 women about Sarala's

work, and I told them to come, to my home. In

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the evening we all spoke to Sarala's Employee,

and decided that 10 of us will take a loan.”

“Within 15 days we got a loan of Rs.8000/-.

Then I started my work with great passion.

Infact, I started to work more and after that, I

repaid the load which I got from the Mahajon or

the money lender, and then I bought books for

my kids. At first, I had only one Ttat (one type of

machine for stitching saree) now I have 4 Ttat

and two workers who are working for me. Now

my kids are going to school, with books and

good clothes, I have rebuilt my house, and all

this I did with the help of Sarala in four year

time. It is because of Sarala we are now

financially stable.”

KULSAN BIBI

Kulsan Bibi has been with Sarala for the past six years. She is from Faridpur, Murshidabad and belongs to Dalia group. She has two sons and five daughters. Her businessis of Brooms. She and her husband EmanSk, work togetherin this business for the last four years. In the beginning, she and her husband were working alone to make all those brooms. After the birth of their children, the financial needs were increased. Then they wanted to expand the same business and to educate her children and get them married. They were very worried during that time due to some financial crisis. So she asked one of her neighbour, whom to go and where to go. There she came to know about Sarala and its work. She went to Rejinagar branch of Sarala. There she applied for the loan of

Rs.8000/-.From Sarala, she received a loan and increased her capital for business. At first she took a loan of Rs.8000/- thereafter, she took Rs.9000/-, after that she took an instalment of Rs.120000/- & 15000/-. And she repaid her loans. Now she has taken a loan of Rs.20000/-. She does business like, buying coconut wood, at the price of Rs.3200/- per 100kg.With this 100kg coconut wood, she makes 250 brooms. To make those brooms it takes almost 12 days. She and her husband work together for this. Then she sells those brooms of Rs.250/- per piece. Among her five daughters, three are married, other children are studying. Her dream was to educate her children, get them married, see them well settled and enlarge her business. Today, she is financially stable enough to fulfil all her needs and take good care of her family.

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Energy Lending Initiative :

Sarala Solar Program –

One of our important initiatives has been in the

field of renewable energy. Sarala has been an

early entrant and a successful player in financing

the acquisition of Solar Lamps. For this Sarala

was recognized as a success story by USAID

under a program known as PACE-D. This

initiative has set us apart from most other

Microfinance organizations in India.

Sarala commenced its Solar Program in June

2015. A total of 66 Branches are covered in the

program over 13 districts (counties) in West

Bengal and 3 each in Assam and Bihar. As of

March 2017, we had cumulatively sold 130,907

units, with a total value of INR 237 million. Of

this, our cumulative financing was for a total

amount of INR 153 million. As of March 31

2015, the outstanding solar portfolio stands at

INR 10.7 million covering 11,105 borrowers.

Sarala plans to expand its number of Branches

to over 300 in 5 years all of which are expected

to be part of our RE/EE program. Here is the

summary:

Credit/Loan Process:

1. As aforesaid, Solar Products are being

provided to customers in cash or

through Credit / Loan.

2. Solar Product Loans are interest-free

with no other costs included.

3. To get a Solar Loan, a prospective client

must be a client of Sarala MFI with a

Microfinance Loan

4. Once a client avails a Microfinance Loan

(Income Generation Loan), there is no

26

exclusive credit appraisal and

sanctioning process required to avail

this loan, since, the client already was

appraised for her bigger income

generation loan followed by approval

and sanction of the same by the Branch

Manager.

5. There is a Loan Application form which

needs to be filled up followed by

approval of the concerned Field officers

and Branch Managers.

6. The Delivery takes place at Client

doorstep, or at Branch office as

convenient for the customer.

7. However, for Cash sales, the Buyer

needs not to be a client of Sarala MFI.

8. There is a separate database for Solar

Program with Loan tracking system,

Client details, Disbursement and

collection of solar loans, delinquency

management of the loans and inventory

control.

9. Each of the products being facilitated

are with 2 years replacement

guarantee.

10. Each Client can avail a maximum of one

Solar Loan at a time.

Sl.No Product

Partner

Model Number of

Customer

2016 2017

1 D.light S320 44,409 14,828

2 D.light M350 1,752 761

3 D.light S20 26,911

4 D.light S100 13,676

5 Greenlight

planet

Sunking

pro 2

15713 11,801

6 Barefoot Barefoot

go (with

stand)

924

Some of our Solar Initiatives at the branches :

Educating Borrowers of the usefulness of Solar Energy:

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Statutory Reports &

Financials:

1. Directors’ Report

2. Independent Auditors’ Report and Balance Sheet.

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