Satin Creditcare Network Ltd · NSE:SATIN
Satin Creditcare Network — Investor Presentation (September 2016)
48 slides from Satin Creditcare Network's investor presentation, September 2016
Slide 1: Satin Creditcare Network Limited Investor Presentation
SATIN CREDITCARE NETWORK LIMITED INVESTOR PRESENTATION SEP 2016 BSE: 539404 | NSE: SATIN | CSE: 30024 Corporate Identity No. L65991DL1990PLC041796
Slide 2: Disclaimer
Disclaimer By accessing this presentation, you agree to be bound by the following terms and conditions. This presentation (which may reflect some price sensitive information in terms of SEBI regulations and Companies Act, 2013, as amended from time to time) has been prepared by Satin Creditcare Netw
Slide 3: Contents
Contents Details Corporate Overview 3 Product Portfolio 7 Key Investment Thesis 11 Future Business Strategy 30 Financial Overview 33 Annexure Operational Process Overview 37 Information Technology Overview 41 CSR & Social Performance Management 44 2
Slide 4: Corporate Overview
Corporate Overview
Slide 5: Company Overview
Company Overview Satin Creditcare Network Ltd. (‘Satin’ or ‘SCNL’) was India’s fifth largest Microfinance Shareholding Pattern – June 30, 2016 Institution (MFI) in terms of Gross Loan Portfolio (Mar’16)# with a strong presence in North India Public - Individuals Public - Mutual Funds 5.36% Corpora
Slide 6: Key Milestones
Key Milestones Reaches 2.02 mn active clients and gross AUM of ₹ 32,782.40 mn as on June 30, 2016 Exit of DMP in Jul'16 and Shore Capital in Aug’16 Reaches 0.17 mn active clients and gross AUM Started MSME Lending and Individual Micro Loans Acquired TSPL in Aug’16 of Rs. 1,690.76 mn as on
Slide 7: Select Accolades & Key Highlights
Select Accolades & Key Highlights Received “Client Protection Certificate” under the Award by Client Protection Certificate Smart Campaign – 2016 from M-CRIL MF Transparency Organization Smart Campaign - 2016 Received certificate for being the ‘Best Micro Finance Company in India’ from Worldwide
Slide 8: Product Portfolio
Product Portfolio
Slide 9: Product Portfolio - Diversification Underway
Product Portfolio - Diversification Underway Started operations in 1990 with an objective to provide ‘doorstep’ credit and savings services to individual businesses engaged in productive, trading and services activities in urban areas; gradually forayed into semi-urban and rural areas also Start
Slide 10: Product Portfolio – Details
Product Portfolio – Details MFI Segment(1) Non-MFI Segment (2) Product Financing Product features as on Jun’16 MFI Lending Loans to MSME(3) (Loan for Solar lamps) Start Date May’08 (JLG) Oct’15 Apr ‘16 Ticket Size Range Rs. 5,000 – Rs. 50,000 Rs. 695 Rs. 100,000 – Rs. 1,000,000 Tenure 12 - 24 months
Slide 11: Product Portfolio – Other Service Offerings
Product Portfolio – Other Service Offerings Have entered into an agreement with Reliance Capital Limited (“RCL”) in Dec’13 to provide certain services to RCL for providing loans against property (“LAP”) with a view to leverage on our rural reach Loan Against Under the arrangement, Satin sources
Slide 12: Key Investment Thesis
Key Investment Thesis
Slide 13: Key Investment Thesis
Key Investment Thesis 1 7 Robust industry Experienced fundamentals with management strong regulatory team support Widespread presence with 6 Robust internal leadership position 2 audit and risk in underpenetrated management regions having high mechanisms growth potential Robust operational Strong cl
Slide 14: Microfinance – Supportive Industry Dynamics and Robust Fundamentals
1 Microfinance – Supportive Industry Dynamics and Robust Fundamentals; Strong Growth to Continue Industry Snapshot Sector has seen high growth in GLP and client reach** High level of credit under-penetration in rural areas – Rural areas accounted for only 10% of overall o/s bank-credit while compr
Slide 15: Strong Portfolio Growth Coupled with Low Delinquencies Has Ensured Continued Funding
1 Strong Portfolio Growth Coupled with Low Deliquencies Has Ensured Continued Funding Higher debt and equity funding Debt funding and securitization during the period* Banks have shown high confidence in the sector and have increased their Debt Funding (Rs. bn) Securitization (Rs. bn) funding to M
Slide 16: Regulatory Tailwind Driving Industry Forward
1 Regulatory Tailwind Driving Industry Forward Allegations of malpractices like coercive collection methods, high interest rates resulting in 2010 Andhra MFI Act farmer suicides in Andhra Pradesh Andhra Pradesh passes the MFI act – collection efficiencies drop to ~10% Guidelines by RBI notifie
Slide 17: Regulatory Tailwind Driving Industry Forward
1 Regulatory Tailwind Driving Industry Forward Comprehensive national-level Financial Inclusion scheme launched - Pradhan Mantri Jan Dhan Yojana Jan Dhan Yojna The scheme includes universal access to financial services, namely, banking/savings and deposit 2014 accounts, remittance, credit, insur
Slide 18: Satin Creditcare - India’s Fifth Largest MFI with Widespread Presence
2 Satin Creditcare - India’s Fifth Largest MFI (in terms of GLP) with Widespread Presence With strong presence in North India, Satin is steadily building a pan India presence Presence in 16 states – 5 states of Chhatisgarh, Jharkhand, Himachal Pradesh, West Bengal and Gujarat have been recently Jamm
Slide 19: Established Presence in Underserved Geographies
2 Established Presence in Underserved Geographies Leading to Significant Growth Opportunities Satin is present mostly in states of low MFI penetration It has significant presence in under-penetrated and high growing markets Key markets for Satin YoY growth in MFI 1QFY17 MFI penetration in the St
Slide 20: Strong Client Relationships Built Through Transparent Operations
3 Strong Client Relationships Built Through Transparent Operations Track record of over 25 years in microcredit space with comprehensive understanding of the industry and client segment – Rapidly growing operations despite cyclical changes in the economy as well as the MFI space in the past - Evid
Slide 21: Strong and Diversified Lending Relationships
4 Strong and Diversified Lending Relationships Diversified Lending Portfolio Debt funds raised (Rs. mn) Active relationship with 73 banks and financial institutions (Jun’16) 25,000 20,954.50 Spread across Public Sector Banks, Private Banks, Foreign Banks, 20,000 Development Financial Institution
Slide 22: Strong Operational Performance..
5 Strong Operational Performance.. Expanding network leading to strong disbursement growth No. of Villages Branch Network 40,000 36,669 500 458 33,631 431 400 30,000 22,499 267 300 20,000 16,135 199 200 10,000 100 0 0 FY14 FY15 FY16 1QFY17 FY14 FY15 FY16 1QFY17 No. of States of Operation Disbursemen
Slide 23: Strong Operational Performance..
5 Strong Operational Performance.. Building on team to cater to high growth and client servicing No. of Employees No. of Loan Officers 5,000 4,583 3,500 3,173 3,918 3,000 2,684 4,000 2,500 3,000 2,496 2,000 1,710 1,958 1,347 2,000 1,500 1,000 1,000 500 0 0 FY14 FY15 FY16 1QFY17 FY14 FY15 FY16 1QFY17
Slide 24: ..Improving Productivity..
5 ..Improving Productivity.. Using technology to assist employees deliver high productivity Disbursement/ Branch (Rs. Mn) Disbursement/ Employee (Rs. Mn) 120.00 12.00 100.00 88.61 10.00 9.48 9.20 83.67 80.00 8.00 61.77 6.28 60.00 6.00 40.00 4.00 18.63 1.86 20.00 2.00 0.00 0.00 FY14 FY15 FY16 1QFY17
Slide 25: ..and High Quality Portfolio
5 ..and High Quality Portfolio High portfolio quality and lowest opex ratio among top MFIs* No. of Clients/ Branch No. of Clients/ Loan Officer 6,000 900 800 5,000 4,461 696 690 4,295 4,407 700 636 4,004 592 4,000 600 500 3,000 400 2,000 300 200 1,000 100 0 0 FY14 FY15 FY16 1QFY17 FY14 FY15 FY16 1QF
Slide 26: Robust Financial Performance
5 Robust Financial Performance Net Interest Income(1) and Profit after tax (Rs. Mn) Net Worth and Gross AUM (Rs. mn) 35,000 3,240.06 3,691.23 4,000 FY14-16 CAGR % 3,000 Net Interest 2,686.63 77.18% 30,000 Income 9,960.36 8,695.31 2,500 Networth (Rs. Mn) PAT 92.98% 25,000 3,000 AUM (Rs. Mn) 1,994.85
Slide 27: Robust Internal Audit and Risk Management Mechanisms
6 Robust Internal Audit and Risk Management Mechanisms Strong Internal Audit Processes and Systems ensure high Portfolio quality Team Structure Full fledged in-house Internal Audit department for Group Lending and MSME 6 member supervisory/support team at Head Office CMD and Audit Committee and 60
Slide 28: Experienced Management Team
7 Experienced Management Team H P Singh, Chairman, MD & Promoter Jugal Kataria, Chief Financial Officer >25 years of experience in microfinance; CFO of Satin since 2000 Experience in the field of auditing, accounts, project 25 years of experience as CA and Company secretary financing, microf
Slide 29: Organization Structure
7 Organization Structure Board of Directors Chairman cum Managing Director Chief Financial Chief Operating Chief Information Head - Human Head - Internal Audit Head - SME Officer Officer Officer Resources & Risk Company Secretary Deputy COO – North 1 Head – & Compliance (Punjab, Haryana, Rajasthan,
Slide 30: Highly Diversified and Experienced Board
7 Highly Diversified and Experienced Board H P Singh, Director Davis Golding, Independent Director Over 25 years of experience Over 30 years experience in international finance, banking, and mergers and acquisitions A fellow of ICAI since 1984; Participated in Harvard Business School’s Accion
Slide 31: Future Business Strategy
Future Business Strategy
Slide 32: Future Business Strategy
Future Business Strategy Product Market size* Future Business Strategy Core operations (MFI Rs. 590 bn+ market; expected to grow at 32% CAGR over Geographic diversification – Broadbase operations and reduce any Lending) next 4 years geographic concentration in states such as Uttar Pradesh Increa
Slide 33: Future Business Strategy (Contd.)
Future Business Strategy (Contd.) New Products Product Market opportunity* Future Business Strategy BC 1,500 5,400-5,600 7,500 TSPL seeks to enter into arrangements with various other No. of BC transaction operations 934 banks and financial institutions to scale the business Amt transacted (Rs. 1,
Slide 34: Financial Overview
Financial Overview
Slide 35: Robust Financial Performance
Robust Financial Performance RoE Tree FY14 FY15 FY16 Gross Yield (1) 23.43% 20.28% 20.64% Financial Cost Ratio(2) 12.97% 11.10% 10.71% Net Interest Margin(3) 10.46% 9.18% 9.93% Operating Expense ratio(4) 6.49% 5.65% 5.91% Loan Loss Ratio(5) 1.11% 0.61% 0.77% RoA(6) 1.67% 2.03% 2.18% Leverage (Total
Slide 36: Financial Summary – Balance Sheet
Financial Summary – Balance Sheet Particulars (Rs. Mn) FY14 FY15 FY16 Equity(1) 1,384.40 1,934.85 3,240.06 Preference shares 60.00 60.00 - Networth 1,444.40 1,994.85 3,240.06 Total Debt 9,086.43 16,300.66 27,483.17 Other Liabilities 626.83 1,811.64 2,311.04 Total Liabilities 11,157.66 20,107.15 33,0
Slide 37: Financial Summary – P&L Statement
Financial Summary – P&L Statement Particulars (Rs. Mn) FY14 FY15 FY16 3m Jun’16 Total Revenue Interest income on Portfolio Loans 1,466.92 2,373.99 3,804.69 1,319.72 Income from securitization 115.94 329.70 892.11 369.33 Processing Fee income 112.41 225.26 352.37 86.07 Interest on FD 207.59 288.41 47
Slide 38: Annexure: Operational Process Overview
Annexure Operational Process Overview
Slide 39: Operation’s Methodology (1/3)
Operation’s Methodology (1/3) Trend in Loan Cycle Area Selection Area Selection SCNL’s Business Development team conducts thorough area surveys for identification of suitable locations for launch of microfinance business. Village Selection The team assimilates, analyzes several variables includi
Slide 40: Operation’s Methodology (2/3)
Operation’s Methodology (2/3) Trend in Loan Cycle Center / Group Formation Area Selection Upon approval of a village by TM, the CSO conducts an Open General Meeting in the village. CSO educates the women about SCNL and its credit programs. Village Selection CSO asks the women to form groups an
Slide 41: Operation’s Methodology (3/3)
Operation’s Methodology (3/3) Trend in Loan Cycle Disbursement (and approval/ rejection of loan) Area Selection Loan proposal (application) qualifies for disbursement after necessary checks done by BM during Pre-GRT and by the TM during GRT. Village Selection Prior to generation of sanction lett
Slide 42: Annexure: Information Technology Overview
Annexure Information Technology Overview
Slide 43: Scalable Business Model supported by a strong IT Infrastructure
Scalable Business Model supported by a strong IT Infrastructure Information Technology Vision Statement Our Current Technology Footprint Information Technology at SCNL is where business, innovation and technology come together to create competitive advantage. Our strategy is to deliver Robust Tech
Slide 44: Business Applications – Custom built for SCNL’s technology needs
Business Applications – Custom built for SCNL’s technology needs Microfinance Core Microfinance Application for Group Lending vertical - Built by Force Ten Technologies and customized for SCNL’s needs. The software is based on SQL technology in the backend and Visual Basic (VB) in the front end.
Slide 45: Annexure: CSR & Social Performance Management (SPM)
Annexure CSR & Social Performance Management (SPM)
Slide 46: Recent CSR & SPM Initiatives
Recent CSR & SPM Initiatives Committed towards social initiatives - conducted regular campaigns including organizing campaigns to increase financial literacy Contribution to various CSR projects undertaken by independent implementing agencies Year CSR project Name Of implementing Agency FY15 “Improv
Slide 47: Contact Information
Contact Information For any queries, please contact: Mansi Verma AVP – Capital Markets Satin Creditcare Network Limited E: [email protected] T: +91 11 4754 5000 (Ext – 243) 46
Slide 48: Thank You
Thank You
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