Crystal Microfinance

Vision To A Big Dream

Introduction to Microfinance

 Micro finance is a concept of furnishing micro capital and financial services to micro/small entrepreneurs
and low income individuals who do not have access to banking services.

 Microfinance is also an idea to enable and uplift individuals who has business ides and seeking or money
to upgrade them selves.

 Micro finance is not only an institution with money who is looking to dispense to individuals but also an
organisation with a motive and responsibility to uplift society, poverty alleviation and nurture dreams of
individuals especially woman.

 Microfinance concept came into existence in late 1970s with a motive to provide financial assistance to
individuals or group of persons who do not have access to assistance from commercial banks.
Status and growth

 Micro finance sector has registered a handsome growth in last one decade, presently total 223 MFIs are
operating in India out of which 168 MFIs holds about 98% of MFI sector portfolio.

 India’s Microfinance market size for small borrower is about 5 lac crore, which is still to be taped to
maturity.

 Presently 168 MFIs together cater to over 295 lakh low income customers with an outstanding Gross
Loan Portfolio (GLP) of `37,763.00 crore and repayment rate of over 99%

 Souther, Eastern, and central part of India are largely penetrated markets which accounts for 83% of
total Microfinance market portfolio

 North, North east, and western parts are least penetrated markets with composite market share of 17%
of total MFI lending.
Status and growth

 RBI has capped ROI for this sector is 26% and categorised as priority sector lending.

 Top ten MFIs account for 65% of the total client base

 Share of Rural and Urban portfolio stands at 55:45

 85% of loans were used for income generation purposes i.e income generation activities like Agriculture,
Animal Husbandry, Trading or Small Businesses, cottage industries, Handicraft etc.

 Operation Self Sufficiency (OSS) for sector stands at 114%.

 In 2016-17, Micro finance industry achieved average yield of 22%.

Status & Growth

 Out of total client base of 295 lacs 88% borrower are woman.

 The industry observed a sharp rise in PAR30 – 180 level (portfolio at risk for 30 – 180 days delays in
repayment) from 0.33% to 10.5% by March 2017 due to extra ordinary political actions and economic
reforms like Demonetization of Currency notes. However post March 2017 industry in whole as
recovered from crisis and regain the collection ratio of 95-96%
Share of loan portfolio by Market players

• Out of total MFI loan portfolio,

SFB & Aspirants (30%),
and Banks (28%) together are
leading with 58% followed by NBFC
MFIs with 31%, and Others 11%.
Region wise portfolio distribution

• Southern, central and eastern

part of India is largely penetrated
regions and has maximum number
of clients
Source of funds

NCD; 11.03% • MFIs across the industry has raised

Any Other ; 6.02% most of the funding through borrowing
ECB/Saving & Deposits; 0.70% (77%) and Non-convertible Debenture (11%).
Bond; 2.01%
Subordinated debt ; 3.01%

Borrowing ; 77.23%

Borrowing Subordinated debt Bond

NCD ECB/Saving & Deposits Any Other
Qualifying norms for MFIs

 Borrower’s income in the rural area should not exceed Rs.1 lakh and Rs.1.60 lakh in case of Semi-urban
areas.
 Loan amount should not exceed Rs.50,000 in the first cycle and Rs.100,000 in subsequent cycles.
 Total indebtedness of the borrower does not exceed Rs.100,000/-.
 Loan to be extended without collateral.
 A company is said to be in the business of Micro Finance if it holds at least 85% of the Micros in the
nature of qualifying Micros
 A company can be register with Rs 1 lacs as capital then correspondingly Capital need to be enhanced to
Rs 200 lacs, as Rs 200 lacs is the minimum net worth requirement for a MFI in India.
 Post registration, Rs 2 crore to be kept in Fixed Deposit and obtain a certificate of no lien from the bank.
 Cost of registration is Rs 5 to 5.5 lacs in which Rs.2 lakh is the professional fees and rest is the
government and RBI fees.
 Minimum 2 Nos of members required to start this business.
Cost of funds and Margin

 As per industry reports median financing cost for sector remained at 14.8% while operating cost remain
at 10.5%
 Average cost of funds for smaller MFIs (<100 cr GLP) remained at 14% while for larger MFIs (>500cr
GLP) it stood at 12% while operating cost for large MFIs is also lower at 6%
 As per industry report average interest rate to borrower is 24.92% with average processing fees of 1%,
this constitutes IIR of 25.92% while as per RBI guidelines MFIs can charge interest of 26% and
processing fees above that this will yield IIR range of 25-27%.
 Basis the maximum return and least cost structure approach a financially and operationally sufficient
MFI can draw NIMs of 6-10% depending on effective Opex and Capex structure.
Structure & Business Operations

 “crystal Micro finance” is indented to be registered with RBI under companies act 2013 as NBFC -MFI
lending organisation.
 “crystal MF” is intended to be formed with a vision to spread its out reach in Rural and semi Urban area
of Delhi NCR followed by Parts of North India.
 To operationalize this venture “crystal MF” will be departmentally channelized in to Sales, Credit, Risk,
operations, collections, product development and analytics.
 Crystal will operate as a fintech company with 100% cash Less Disbursements and 100% technology
driven operation Including login from its year of incorporation
 Being Tech concentrated organisation Crystal will have low opex model and financially transparent in
disbursement to collections.
 Reliance of technology will enable quick and speedy loan disbursement to effective data base
management.
 Crystal will adopt and ensure strong Credit appraisal mechanism and Risk underwriting with proprietary
risk assessment models.
 As a responsible organisation Crystal will act under strict framework of policies and follow practices of
corporate governance, Transparency and Ethics
 Targeted business snapshot

Parameters Expected figures

Number of states 5 (Delhi, Punjab, Haryana, Rajasthan and Uttar Pradesh)
Number of Branches 5 with Head office in Delhi
Number of clients (Expected) 5000 In first year of operation
Disbursal Model JLG and Individuals( MEL)
Employees Initially on roll 10-15 employees and further strengthen the head counts as per
customer addition and portfolio growth. Targeted ratio is 300-350 borrowers per
staff member
 Organisational Structure

Board of Directors

Audit Head CFO CEO COO

Head
Audit Credit Company Product & Operations
Finance & Sales Head Head HR IT (Project
Manager Head Secretary Risk Head
Account manager)
Regional
Sr Manager Regional Cr Admin Operations
Sales Collections
Accounts Manager Manager
Manager Head
HR
Manager Area Sales Area Cr. manager Operations
Accounts Manager Manager Executive
Collection
Manager
Accounts Sales Branch Cr
Executive Manager Manager

Cr.
Executive
Competition

o Major MF institutions who are operating in the targeted region are

 Delhi- (Satin Creditcare, BFIL, BMC, Capital Trust Microfinance Pvt Ltd, Basix, GMCF)
 Haryana- (Margdarshak Financial Services, Asirvad Microfinance Pvt Ltd, Midland Microfin Ltd, S V
Creditline (P) Ltd, Satin Creditcare Network Limited, BFIL, DIMC, Altura Financial Services Ltd, Anandita
Micro Credit, Muthoot Microfin Limited, Satya MicroCapital Limited, Sonata Finance Pvt Ltd, Arth
Microfinance Pvt. Ltd)
 Rajasthan- (Altura, Basix, Midland Microfin Ltd, Asirvad Microfinance Pvt Ltd, S V Creditline (P) Ltd,
Annapurna Micro Finance (P) Ltd, GMCF, Arth Microfinance Pvt Ltd, Satin Creditcare Network Limited, BFIL,
Capital Trust Microfinance Pvt Ltd, Planned Social Concern, Rajasthan Shram Sarathi Association, Satya
MicroCapital Limited, Sonata Finance Pvt Ltd, Pustikar Sakh Sahakari Samiti Limited
 Uttar Pradesh-(Asirvad Microfinance Pvt Ltd, Basix, Cashpor Micro Credit, Margdarshak Financial Services
Ltd, Arohan Financial Services Pvt Ltd, S V Creditline (P) Ltd, Saija Finance Private Limited, Satin Creditcare
Network Limited, BFIL, Vedika Credit Capital Ltd, ASA International India Microfinance Pvt Ltd, DIMC, BMC,
GMCF, Capital Trust Microfinance Pvt Ltd, Muthoot Microfin Limited, Namra Finance Limited, Samhita
Community Development Services, Satya MicroCapital Limited, Sonata Finance Pvt Ltd, Spandana Sphoorty
Financial Limited, Need Livelihood Microfinance Private Limited)
Projected Balance sheet
Particulars (figure In Year 2018-19 Year 2019-20 Year 2020-21
lacs)
A Equity & Liabilities
1.Share Holder’s funds
(a) Share Capital 1200.00 3200.00 5500.00
(B) Reserves & Surplus --76.42 -34.75 128.37
1123.58 3165.25 5628.37
2.Current Liabilities
(a) Trade Payables 3.10 42.67 25..72
(b)Other current liabilities 9.90 47.25 60.11
13.00 89.92 85.83
Total 1136.08 3254.68 5713.71
B Assets
1. Non Current Assets
(a) Fixed Assets 13.59 18.73 12.34
2.Loan Outstanding 1000.00 3000.00 5000.00
3. Current Assets
(a) Trade Receivables 19.00 70.00 108.00
(b) Cash and Cash 103.49 165.95 592.87
Equivalents
122.49 235.95 701.37
Total 1136.08 3254.68 5713.71
Projected Profit & Loss Account
Particulars (figure In Year 2018-19 Year 2019-20 Year 2020-21
lacs)
Revenue
Interest income from loan 157.00 463.00 946.00
Income from Processing Fee -- --- ---
Other income 5.00 16.00 24.00
Total 162.00 479.00 970.00
Direct Expenses
Commission - 22.00 34.00
Credit Bureau and Cloud Charges 3.60 10.50 21.75
Provision for NPA 6.00 20.00 20.00
Total 9.60 52.50 75.75
Operating profit 152.00 426.50 894.25
Indirect Expenses
Payroll expenses 186.00 244.00 311.50
Rental and other facility cost 6.00 19.50 45.00
Other indirect expenses 36.82 103.46 304.72
Total indirect expenses 228.82 366.96 661.22
Profit Before Tax -76.42 59.54 233.03
Income Tax - 15.46 69.91
Profit after Tax -76.42 44.07 163.12
Loan Book Size

Particulars Year 2018-19 Year 2019-20 Year 2020-21

A Gross loan Portfolio 1000.00 3000.00 5000.00
Net Loan Portfolio post 1000.00 3000.00 5000.00
repayment and Provisioning
(figure In lacs)
Thank You