Svatantra Microfinance reaches break even in FY17

The microfinance institution, having a loan book of Rs 260 crore, focuses on lending to rural women

Svatantra Microfinance, promoted by Ananya Birla — daughter of industrialist Kumar Mangalam Birla, plans to build up a balance sheet of Rs 500 crore by the next financial year. The microfinance institution (MFI), having a loan book of Rs 260 crore, focuses on lending to rural women. 

“Svatantra’s loan book has grown at a compounded annual growth rate (CAGR) of 220 per cent since inception and has achieved break-even in FY17,” said chairperson and director Ananya Birla. 

Founded in 2012, the MFI lends at 22-22.75 per cent and has disbursed loans aggregating Rs 450 crore till date. 

Senior Vice-President Vrushali Mahajan said the company closed with a gross loan book of Rs 255 crore and a net profit margin of 4 per cent, hence achieving break-even. The MFI’s net profit stood at Rs 4 crore in 2016-17.

Director Vineet Chattree said Svatantra’s default rate is below 1 per cent. Chief Operating Officer Anujeet Varadkar said the demonetisation had led to a rise in defaults and were still recovering. 

Svatantra, operating in five states with 85 branches across 11,000 villages and 200,000 customers, plans to expand its footprint to around 190 branches across 12 states in the upcoming year. It has  also launched a mobile app ‘Saathi’, an end-to-end mobility solution used by its field officers and branch managers. 

Mahajan added they have nine lenders, including banks and non-bank financial companies (NBFCs) and are also open to have fund infusion from social impact partners.  

The MFI was the first to adopt Aadhaar Payment Bridge for loan disbursement, collaborating with National Payments Corporation of India and RBL Bank, earlier this year.