MARGADARSHAK FINANCIAL SERVICES
The non-governmental Margdarshak Financial Services Limited was founded on May 9, 1996. It
is an unlisted public corporation defined as a "company limited by shares."
The company's authorized capital is Rs 5250.0 lakhs, and its paid-up capital is Rs 1746.5 lakhs,
or 33.266586%. Margdarshak Financial Services Limited had its most recent annual general
meeting (AGM) on September 25, 2017. The company's financial statements were last updated
on March 31, 2017, under the Ministry of Corporate Affairs (MCA).
In the states of Uttar Pradesh, Bihar, Haryana, and Himachal Pradesh, Margdarshak Financial
Services Ltd, a non-banking financial company, provides financial services for enhancing the
livelihoods and economic inclusion of the underprivileged. Margdarshak rural reach is
approximately 70%. Currently, the organization operates via a network of 115 branches located
in 50 regions.
A Leadership with Enhanced Intuition and Experience With the intention of enhancing financial
services for Indian customers.
In the past decade, under Rahul's guidance, the organization has expanded its microfinance
activities throughout northern India in order to reach unserved and underserved families. With
over twenty-four years of experience in rural development at the grassroots level, his deep
knowledge of livelihood practices and organizational building skills are beneficial to the
organization in formulating pertinent policies, processes, and mechanisms for all-encompassing
growth. Additionally, Rahul participates to client interaction and conveys client feedback to the
board and stakeholders. The senior management team consists mostly of sectoral and technical
expertise and aids Rahul. The consistency of the management team is one of the organization's
greatest strengths.
OWNERSHIP PATTERN
The corporation has three directors and two senior management staff, as reported.
The current director with the longest tenure is Rahul Jessel Mittra, who was appointed on
January 18, 2010. Rahul Jessel Mittra has been on the board for almost a decade. The most
recent director to be appointed is Saroj Topno, who was appointed on November 12, 2011.
With seats at a total of 4 firms, Rahul Jessel Mittra holds the most directorships of any
individual. Through its directors, the corporation is tied to six additional businesses.
They are also accompanied by Mr. Arup Baruah, Ms. Saroj Topno, Mr. DPS Rathore Mr. Prasad
Kuchibhatla, Mr. Maitrayee Banerjee, Mr. Bhanu Prakash.
DETAILS OF SOUCING OF DEBT:
Their investors are Dia and SIDBI
Dia Vikas Capital Pvt. Ltd India is a subsidiary of Opportunity International Australia, a
global microfinance and enterprise development impact investor and a member of the
Opportunity International Network. Early in 2008, Dia Vikas was founded as a social
investor to fill the void in social investment, thereby supporting the expansion of the
Indian microfinance sector and encouraging the development of start-up businesses in
underserved areas. Dia Vikas collaborates with microfinance institutions to effectively
and extremely efficiently touch the lives of millions of individuals in urgent need. Dia
presently partners with twelve socially oriented microfinance organizations that provide
lending, savings, insurance, remittance, and pension products to around 6.05 million
underprivileged individuals.
Similarly, Small Industries Development Bank of India (SIDBI), established on April 2,
1990 by an Act of the Indian Parliament, serves as the Principal Financial Institution for
the Promotion, Financing, and Development of the Micro, Small, and Medium Enterprise
(MSME) sector, as well as for the Coordination of Functions of Institutions Engaged in
Similar Activities.
Throughout the year, the company received 123.55 crore in new debt capital from banks and
financial institutions. During the year, 123.97 billion was reimbursed, compared to 146.71 billion
during the previous year. The total outstanding debt decreased to 253.35 billion from 253.78
billion the previous year.
GROWTH PATTERN:
Our strategic objective is to create a sustainable, scalable, and replicable model of livelihood and
enterprise financing for the poor and the marginalized, as well as provide a hands-on learning
site for other organizations, while providing growth opportunities for our employees and
profitable returns for our investors.
Financial Inclusion is the foundation and core of Margdarshak vision for economic
empowerment and development. In 2007, the company began microfinance operations in Uttar
Pradesh, and in 2013, in Bihar. As of March 31, 2019, 45% of the portfolio was located in Uttar
Pradesh, 44% in Bihar, and 11% in Haryana, Himachal Pradesh, and Uttarakhand.
Till now they have a total annum of 300 .06 cr. They have almost 196,408 active clients whose
life they are changing. They have disbursed an amount of 1166.49 cr. Number of clients that
disbursed are 627,138. At present they have around 139 branches with around 675 employees
around 5 states.
LENDING MODEL USED:
JLG Model: Joint Liability Group (JLG) is an informal group consisting of four to ten
members, preferably, for the aim of obtaining a bank loan either individually or through
the group mechanism in exchange for mutual guarantee. MFSL provides income-
generating loans particularly to women borrowers. As of 31 March 2020, 98% of the
overall portfolio consisted of microfinance loans with small ticket sizes (Rs 20,000 to Rs
40,000) issued using the JLG model. The company's asset quality has been satisfactory
for the past three fiscal years, with gross Non-Performing Assets (NPA) at or below 0.25
percent. As of March 31, 2020, the 90+dpd (gross write-off rate) was 0.1%. However, the
company's collection efficiency fell in the first quarter of FY21 due to the COVID-19-
related shutdown and extension of the moratorium in accordance with RBI rules.
However, collections improved to ~50% Collection Efficiency (CE) in June 2020 and are
expected to further improve in the coming months. The performance of the company's
collections and recovery efforts, as well as the influence of the COVID-19 epidemic on the asset
quality, will be crucial metrics to track in the near future.
MAJOR CHALLENEGES FACED:
Technology and innovation
Technology and innovation have a significant impact on financial services. Whether in rural or
urban locations, the introduction of technology has brought about a paradigm shift in the
financial sector, hence redefining the needs of clients. Nevertheless, despite all of its benefits,
technology has a side that disturbs industry experts.
According to PwC Financial Services Technology 2020 and Beyond, 81 percent of banking
CEOs are concerned about the rate of technological change, the highest percentage in any
industry. Business Intelligence tools and advanced analytics are significantly improving banking
operations by identifying patterns, analyzing connections, addressing and resolving issues in
real-time, etc. Several financial firms have already begun implementing BI technology and
reaping its benefits. However, its full potential remains untapped.
Business Intelligence (BI) tools and sophisticated analytics should be coordinated appropriately.
This lack of coordination can raise the cost and efficiency of banking and financial
organizations. Because these two techniques are entirely distinct, we are combining them in
order for them to work in tandem, said Venu Kumar Panjarla, CAVP-Technology at
Margdarshak Financial Services Ltd.
