India UnInc. represents a large and ever-growing opportunity.
This is primarily because this segment of society has been neglected by the Government and the 'privileged section' of the Indian society for decades. This has led to a considerable section of the Indian population left to languish at the bottom of the societal pyramid; and the volumes in this basket continued to increase with each passing year of growing indifference towards them.
But over the last decade or so two words - 'Financial Inclusion' -- have made a meaningful difference in assisting impoverished Indians in their journey out of the dungeons of poverty.
Financial inclusion has played a significant role in energising the economy and broad-basing the Government of India's developmental agenda. The engine of financial empowerment is gathering momentum driven by policy measures and the Nation Building passion of a handful of entrepreneurs determined to lend a helping hand to these aspirers. They have successfully uplifted millions till now. Arman is one among those handful who have participated with zeal and enthusiasm in this empowerment wave riding across India.
But the job at hand is only becoming more challenging. For microfinance as a sector has only touched one pain-point -uplifting the earnings potential and respect of women in rural India.
There are numerous other challenges which this segment confronts every day. The way I look at it is that each such challenge represents an opportunity for India Inc. to create successful and sustainable business models.
I am pleased to state that at Arman we have successfully set foot on this path. Our MSME loan segment has delivered yet another year of robust growth with negligible NPAs. This is very heartening for two reasons:
One this suggests that this segment which was all the while considered inconsequential is providing momentum to India's economic engine.
Two the so-called 'risky assets' of India UnInc. in reality are more ethical and disciplined as compared to their India Inc. counterparts.
Moving ahead we will continue to leverage our knowledge capital to create other new products pivoted on the theme of financial inclusion and economic empowerment of the disadvantaged sections of society.
2018-19 in retrospect
From a business standpoint it was satisfying to note that we are back to winning ways. Our growth numbers in each business vertical and the cumulative business were immensely gratifying. Our margins remained healthy. More importantly our cash flow continued to remain robust (owing to multiple rounds of fund infusion and operational cash flow) which helped in sustaining the growth momentum as liquidity dried due to the NBFC crisis towards the close of the year.
But more than the numbers and performance our digital success gave me immense pleasure. We achieved a significant milestone - we moved to 100% cash-less disbursements for our business divisions. For me this is important because we successfully educated our customers and our field force on technology its operations and its benefits. This effort I believe will go a long way in reducing the divide between the two India's - UnInc. and Inc.
During the year we appointed Mr. Alok Prasad as the Non-Executive Chairman. He is a very reputed and respected personality in the NBFC sector and more particularly in the Microfinance space. I am sure his knowledge and expertise will help in taking Arman to a new orbit in operational efficiency and in identifying opportunities that flank our core business philosophy.
Fiscal 2018-19 was heartening as CARE Ratings have upgraded the ratings for both Arman & Namra from BBB to BBB+.
Besides the MFI grading for Namra was upgraded from MFI-2 to MFI-2+ which is one step below the highest possible grading. This strengthens the credibility in our robust and resilient business model. These upgrades will help attract other marquee investors and lenders who are interested in being part of our growth story.
We are only as good as our people who drive our scale and excellence. Over the preceding two years our achievements have been the direct outcome of the teamwork and commitment of our employees. I thank the entire team whose determined dedication and discipline efforts have made Arman one of the leading players in the financial inclusion space.
In closing I conclude with this one statement - our efforts will remain focused on creating a responsible business that meets our customers' needs and a culture where our teams put customers first. This is the key to our long-term success.
I take this opportunity to extend my heartfelt gratitude to our valued customers investors bankers the State and Central Government and all other stakeholders for their relentless support encouragement and motivation extended to us. I also thank my colleagues on the Board for their invaluable advice and guidance.