Uttrayan Financial Services, a city-based micro-finance institution, held its first ever press meet to announce its growth plan on the eve of celebrating its 15-year presence. Being an MFI its similar to Bandhan Bank but not quite as it retains internal equity, which stands at 27% in comparison to National average of 24%. Their operational cost of 9% is better than the average of 10%.
But the major area of concern is its cost of funds – a major challenge for MFI’s – which is 16%+ as opposed to the national median of 13.5-13.75% and which they have targeted to set right in a year’s time by reducing dependency on NFFC funding. Currently UFSPL’s credit from NBFCs is at 20% out of 500 Cr kitty which includes lending like Bandhan Bank, IDBI Bank, UCO Bank, Union Bank, Yes Bank and such.
Expansion plans are afoot and they want to shore up AUM’s from 116Cr. as of now to 150Cr. by December and 175Cr. by March. “It’s quite feasible as the growth rate in our sector is 89%”, said Kartick Biswas, MD, promoter-founder of Uttrayan, sitting besides Apu Dhar, Director (Promoter), Bijon Kanti Choudhury, Non Executive Director-Ex. DGM UCO Bank and Anindya Sen, Non Executive Director- Ex. SVP Axis Bank Ltd. at the briefing.
“At present we are in Bengal, Bihar, Assam and Meghalaya and will be in Orissa and Tripura”, he added. They’ve targeted to increases their branches from 59 to 75 including some unbanked pockets in Purulia district of Bengal, on wings of a recent tie-up with Banadhan Bank. The customer base is expected to be threefold from one lac by 2020.
Uttrayan mainly focuses on small traders and allied agri (goatery, hatchery etc.) non-cash(90%) loans, the average size of which ranges between 25-35K, may go up to 50K in some cases, carrying a repayment rate between 22-26%. This fiscal they had bad debt of only 3.8%.
In districts they are present at the 24 Parganas, Nadia, Hoogly, Bardhaman, Malda, Birbhum and N. Dinajpur.
Uttrayan was conferred by with ‘SKOCH Financial Inclusion & Deepening Award, 2014 & 2015’ for its significant contribution in the field of Financial Inclusion; honored as ‘Best Financial Institution – Financing MSME’ or Vocational Skill Development” for 2014& 2015 by ASSOCHAM and nominated in the category of ‘Highest Job Creator Award, Maximum turnover upto INR 100 crore’, for the 2nd edition of ET Bengal Corporate Awards presented by the Association of Corporate Advisers & Executives (ACAE), Kolkata.