It gives me great pleasure to state that the Company witnessed steady progress duringthe financial year 201920 with continued execution of its strategic objectives ofsustainable growth and improving efficiencies. Even though the external environment turnedincreasingly volatile we remained resilient on the back of strong fundamentals andsteadfast leadership.
In our journey of about three decades we have evolved ourselves from providingindividual loans to urban shopkeepers for small businesses to becoming a leading and atrusted pan India microfinance player. The journey of our growth does not end here todaywe have successfully transfigured our business into a process and technology-drivenorganization with a powerful human touch. Our enhanced and greatly amplified digitalinfrastructure has prepared us for the next level of growth which will help in building astrong momentum towards achieving our vision to drive financial inclusion in the country.
The Indian economy continued to face headwinds in the first half of the year due tosubdued private consumption and liquidity crisis which got severe in the second half dueto continued global slowdown and the unprecedented Covid-2019 outbreak. The Governmentintervened by implementing nationwide lockdown in various phases. This resulted incomplete halt to the economic activities with significant impact on the incomes andlivelihood of people. However constant support from the Government and Central banks inthe form of fiscal stimulus packages and policy rate cuts and improved farm sectorperformance are expected to revive growth in the future.
Taking a closer look at the microfinance landscape the industry has become essentialfor driving the growth of a large section of the underserved and unbanked population inIndia. The industry faced multiple challenges in 2019-20 owing to liquidity crunch heavyfloods in some states nationwide protests Assam crisis and the pandemic. The resultantlockdown reduced loan disbursement activities. According to the MFIN's Micrometer reportfor the December 2019 the industry served 5.64 Crores unique borrowers with total loanportfolio standing at Rs. 10.11 Crores with operations across 36 states andunion territories. The industry has witnessed a healthy growth over the years and withthis growth the risk associated with portfolio quality also increases so it is essentialfor microfinance institutions (MFIs) to conduct more responsible lending through improvedcredit assessment of borrowers. At SCNL we have always tried to address this issue andhave always endeavoured to achieve sustainable growth without hampering our portfolioquality. SCNL has always believed in capitalizing on evolving trends and focus on meetingthe growing credit demand in the country by providing affordable financial aid to millionsof underserved rural women and their families.
PROCESS RE-ENGINEERING INITIATIVES
Process re-engineering is about making significant changes within business operationsfor short and longterm viability. All through 2019-20 we have undertaken host of digitaltransformation activities at a continued pace. We have significantly invested indeveloping state-of-the-art inhouse digital platform covering all the business processesi.e. credit underwriting credit monitoring and collection which will enable us toprovide enhanced customer experience. We have successfully initiated centralizedprocesses KYC compliance MFI scorecards and real-time credit bureau checks for greaterproductivity and supplemented security. During the year we have also implemented auto bankreconciliation using API and geotagged all our borrower's houses which will help inimproving employee productivity via route mapping while reducing dependability on loanofficers. In another initiative to reduce costs the Company has already started workingon digitizing collections which is currently at 37% after reaching 100% cashlessdisbursements last year.
During the lockdown period we successfully launched a new 'Customer Service AppRs. toincrease digital and financial awareness among customers and helped them getting connectedwith brand 'SATIN'. All these efforts will significantly reduce the risk of handling cashand also enable us to improve our overall productivity and operational efficiency which inturn will help us build scale enhance our reach and in turn improve our margins.
We have continued to entrench our presence in the existing states and expanded furtherbeyond exploring new territories. As a result of which the customer base reached 34.6lakhs in 2019-20 while the branch network expanded by 18.9% from 1163 in 2018-19 to 1383in 2019-20. The Company's NII grew 14.29% from Rs. 803 Crores in
2018- 19 to Rs. 917 Crores in 2019-20. During the year 2019- 20 theconsolidated GLP stood at Rs. 8174 Crores while consolidated PAT was Rs.155 Crores in 2019-20. Also the collection efficiency level was reported at~98.8%. All these figures hold the testimony of a strong and coherent operating efficiencyand scalability.
Our subsidiaries have grown steadily during the year. Business correspondent servicesunder Taraashna Financial Services Limited reached an AUM of Rs. 704 Croresthrough 213 operating branches. Satin Housing Finance Limited reached an AUM of Rs. 139Crores with 100% retail book comprising of 87% affordable housing loans and 13% of LAPFocused on secured retail MSME lending wholesale lending to small NBFC MFI Satin FinservLimited made good progress as well with an AUM of Rs. 111 Crores. Welaunched a new product called 'Pragati LoanRs. to rebuild borrowersRs. income generationactivities impacted due to Covid-2019 and Cyclone Amphan.
THE PEOPLE EDGE
Our field employees are the mainstay of the Company who contribute in keeping up theconsistent growth and thus being the reason behind SCNL's success story. The monthlyproductivity evaluation done via 'Udaan' constantly helps in improving the proficiency.It aids the team to constantly improvise and make headway to a heartening future. Theimplementation of robust IT technology has enabled us to develop in-house HR modules.Also we have been certified as 'Great Place to WorkRs. for building and sustaining highperformance culture won 'National Best Employer Brand' 'Dream Companies to Work ForRs.which results in a healthy growth rate and higher customer satisfaction.
OUR SUSTAINABLE BUSINESS APPROACH
We are committed to be a responsible corporate that also emphasizes on building healthyand safe environment. Our social initiatives primarily focus on women empowerment skilldevelopment education and health awareness. We strive to be transparent in all ouroperations by embracing the best practices in our business.
THE NEXT LEVEL OF GROWTH
Even amid challenging environment we remained resilient underpinned by a strongdigital edge new client acquisitions small ticket size loans product financing andoperating leverage. We are also witnessing our subsidiaries taking good shape thusaugmenting the growth prospects. We are exploring opportunities in Southern India as wellas in states like Rajasthan Madhya Pradesh and Haryana. Comprehensively the new avenuesseem immensely promising thus opening up several new vectors for the Company goingforward.
I am truly grateful to my fellow Board members for their support and guidance thatremained consistent on all fronts. I would like to conclude by thanking my industriousteam at SCNL our esteemed customers bankers channel partners and all the otherstakeholders for their unwavering support and we look forward to strengthening ourrelationship in the future.
With Warm Regards
H P Singh
(GRI: 102-14 23)