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Satin Creditcare Network Ltd.

BSE: 539404 Sector: Financials
NSE: SATIN ISIN Code: INE836B01017
BSE 12:43 | 30 Nov 71.10 0.45
(0.64%)
OPEN

71.70

HIGH

72.20

LOW

67.90

NSE 12:34 | 30 Nov 69.45 -1.20
(-1.70%)
OPEN

72.80

HIGH

72.80

LOW

67.50

OPEN 71.70
PREVIOUS CLOSE 70.65
VOLUME 3681
52-Week high 112.65
52-Week low 66.70
P/E
Mkt Cap.(Rs cr) 511
Buy Price 69.40
Buy Qty 10.00
Sell Price 69.95
Sell Qty 434.00
OPEN 71.70
CLOSE 70.65
VOLUME 3681
52-Week high 112.65
52-Week low 66.70
P/E
Mkt Cap.(Rs cr) 511
Buy Price 69.40
Buy Qty 10.00
Sell Price 69.95
Sell Qty 434.00

Satin Creditcare Network Ltd. (SATIN) - Chairman Speech

Company chairman speech

Dear Stakeholders

The year 2020-21 was exceptional by any measure. Despite the year's upheaval wepersevered and endured by ‘Doing it RIGHT'. We steered through the economic cyclewhile holding our vision of driving financial inclusion closer. Our right mix ofstrategies and principles helped preserve our financial integrity while continuouslyempowering society's underserved sections.

We leaned on our people's persistent endeavors strong execution capabilities and ourdigital solutions to ensure seamless customer service. Our prudent decisions and riskmitigating actions helped maintain a healthy asset portfolio as we emerged ever stronger.

A Challenging year

The onset of the pandemic in January 2020 and the resultant disruptions createdrepercussions on a scale never experienced before. Globally economic activities came to ascreeching halt - leading central banks and governments to undertake bolstering measuresfor supporting economies. The subsequent lockdowns and medical hardships overwhelmed theIndian economy as well. This led to rising unemployment and stagnated business activitiesacross sectors with microfinance sector being no exception.

However easing of lockdowns and resumption of business activities in a phased mannermade the situation improve gradually. The Reserve Bank of India (RBI) and the Governmenthelped cushion the impact by announcing fiscal stimulus packages slashing interest ratesand allowing loan moratorium facilities among others. Additionally other measures suchas repo rate cut Targeted Long-term Repo

Operations (TLTRO) Special Liquidity Scheme and Partial Credit Guarantee Schemeinjected essential liquidity support to the NBFCs. Further the Government's prompt movetowards rolling out mass vaccination is expected to play a crucial role in the recovery ofGDP going forward.

Right since the pandemic hit the nation our focus was squarely on ensuring the healthand safety of our employees business partners and communities. We implementedcomprehensive safety standards and seamlessly transitioned to remote work. Our field teamsonly resumed operations gradually on the easing of restrictions while strictly adhering tothe COVID-19 safety protocols. We closely worked with our customers prioritizing theirconvenience with stronger support during such turbulent times.

Microfinance Industry

Through decades the microfinance industry has significantly contributed to the growthof the Indian economy by financing income-generating activities of marginalized section inboth rural and semi-urban geographies. As per the MFIN's Micrometer Report December 2020the total microfinance loan portfolio (outstanding amount of loans extended tomicrofinance borrowers) stood atRs.232648 Crores as on December 31 2020. The industrywith its 10.5 Crores active loan accounts served 5.83 Crores unique borrowers. Traversingthrough endured credit and liquidity distress in the past microfinance sector has evolvedover the years. COVID-19 hit MFIs hard presenting new challenges and risks in the form ofreduced loan disbursements repayment and collection efficiencies. Despite adoptingcashless disbursements over the years loan collections are still cash intensive.Difficulty in making loan repayments further led to a significant proportion ofmicrofinance borrowers to avail loan moratorium. This impacted the collection efficienciesduring the first quarter of 2020-21 considerably. However gradual easing of lockdownsimproved employment situation in the second half of 2020 thereby leading to recovery inthe collection efficiency and disbursement across the sector.

Our Performance

Despite the pandemic and its tumultuous impact we clocked in satisfactory financialresults during the year. Our branch operations loan disbursements and collections weresubstantially affected due to the stringent lockdown. But our focus was more on offering aseamless experience to our existing customers than on expansion. As an establishedmicrofinance player we leveraged our experience and world-class digital infrastructure bystrengthening cashless collection encouraging digital payments and introducing customizedloans. We maintained consistent portfolio quality by tightening our credit assessmentcriteria post the advent of COVID-19. With a broad-based pickup across the economy'svarious sectors we witnessed improved disbursement collections and steady AUMquarter-on-quarter.

Disbursements reached Rs.2376 Crores during Q4 2021 closer to the pre-COVID levelsConsolidated AUM stood at Rs.8379 Crores as on March 31 2021 registering a growth of2.5% year-on-year NII reported a dip of 18.8% from Rs.914 Crores in 2019-

20 to Rs.742 Crores in 2020-21

Consolidated PAT was recorded at Rs.(14) Crores

Improved collection efficiency to 98% and 105% in

December 2020 and March 2021 respectively The upturn in the rate of repaymentunderscores our strong underwriting and efficient collection framework along with ourcustomers' resilience and endurance. This recuperation is a testimony to our prudentinvestments in upgrading process and technology over the years.

The subsidiaries which are an offshoot of the de-risking strategy adopted by theCompany to diversify out of unsecured MFI loans few years ago have started bearing fruit.During the year our subsidiaries reported a steady growth despite challengingcircumstances. We have been providing credit to clients in the rural and semi-urban areasthrough our business correspondence services under Taraashna Financial Services Limited

(TFSL). The subsidiary was able to register an all-time high AUM of Rs.748 Crores with97% cashless disbursement besides maintaining high collection efficiencies for the year2020-21. This growth comes on the back of a low-risk business model which is highlycapital-efficient in

Going forward we will be sourcing new businesses for SCNL and Satin Finserv Limited(SFL) under the program ‘‘Nai

Roshni' while the existing business correspondence channel remains intact.

Through our subsidiary Satin Housing Finance Limited (SHFL) we primarily cater to thecustomers belonging to the middle and low income groups in peripherals of tier-II andbelow cities. With two consecutive profitable quarters towards the end of the year anddespite a challenging business environment it recorded a higher AUM growth of

Rs.226 Crores with retail loan book comprising 79% affordable housing loans and 21%LAP. We are highly optimistic about this subsidiary growing at a faster pace on the backof a solid foundation laid during the last three years of operations in addition to thegood team underwriting processes and technology controls.

Engaged in secured retail MSME lending Satin Finserv Limited (SFL) clocked an AUM ofRs.131 Crores as at the end of 2020-21. Thereby recording a second profitable year ofoperations. We believe that our subsidiaries will provide us traction to increase ourexposure to newer states while rationalizing the exposure to traditional regions. Thiswill enable us to foray into newer geographies while expanding the vistas of our businessand maximize our reach to the financially excluded population to help them enhance theirlivelihood.

It is our endeavor to seed these subsidiaries to diversify our risks and achieving abetter product mix. The next level of growth is expected from this diversificationespecially with these subsidiaries starting to contribute to the overall bottomline.Although the current contribution of non-MFI lending portfolio stands at 8% of the totalAUM we are aiming for around 25% of contribution from our secured lending portfolio on amedium to longer term horizon. On liquidity front we maintained a comfortable positionwith a positive Asset-Liability Management. Our capital base continued being strong with acapital adequacy ratio of 25.3%. Additionally we took proactive steps to augment ourcapital position by successfully raising Rs.120 Crores ( Rs.90 Crores already receivedduring 2020-21 and remaining to be received by the second quarter of 2021-22) throughRights Issue of approximately 2 Crores partly paid equity shares in 2020-21. Out of thiswe have successfully called approx. Rs.90 Crores and balance Rs.30 Crores will be calledin 2021-22.

Riding the Technology Wave

Over the last few years we have been increasingly focusing on transforming ourprocesses digitally. Our technology-enabled infrastructure – digital platforms andcentralized processes enabled us to quickly respond to the liquidity needs of individualsas well as MSMEs during the year. The nature. technological-integration across the boardis helping us reduce the overall turnaround time (TAT) providing real-time analyticaldata enhancing productivity and helping improve monitoring and control in addition toother benefits. We successfully developed an in-house ‘Customer Service

Application' with user-friendly interface – a one-stop solution addressingcustomers' post-loan requirements.

Further to facilitate easy repayment we added digital payment alternative on ourwebsite and UPI 2.0 with an auto-debit option to scale up cashless collections. We alsogeo-tagged 92% of our clients' homes for further control and centralized monitoring. Goingforward technology will help us remain ahead of the curve and better respond to theever-changing business scenarios while reducing manual intervention. With digitaltechnologies making rapid inroads into all the realms of human life they are also helpingreshape the businesses and operational models. The recent innovations fuelled by thelaunches of various apps emergence of fintechs and the strengthening of the digitalprowess by companies is likely to help the microfinance sector better fulfill its role indevelopment and inclusion.

employee Focused

I am proud of the energy and determination that our field employees have demonstratedduring this intense period of need. Assuring their safety and health is more importantthan ever now. During the year we introduced COVID Mediclaim policy for all ouremployees. Through our ‘Satin

Sahyog Policy' we stood by our people offering term life insurance including pensioneducation assistance job for family member and mediclaim cover for the entire family asapplicable.

Our employee trainings continued virtually and we even launched our YouTube channel‘SCNL Training' to further aid the team. SCNL once again was identified andcertified ‘Great Place to Work' highlighting our continual investments inpeople-first and inclusive work culture. We were also featured among India's BestWorkplaces in BFSI 2021.

New Beginnings

Despite such a dull and timid year there has been a silver lining in the form of ourown workplace at Udyog Vihar

Gurugram Haryana. It's almost like we have fulfilled a collective dream of the SCNLfamily here. I look forward to welcoming you all to our own building – our newpermanent address soon. The new distinguished landmark for us is representative of ourcommitment to the environment with a very eco-friendly structure – solar panelsrain water harvesting sewage treatment plants and radiant cooling among others beingsome of the marquee features. Besides the new workplace will offer an able support to ourgrowth strategies thus enabling us to deliver a cohesive service and further magnifyingour commitment to provide value-driven customer service.

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