AJIVIKA FINANCE LIMITEDResponsible Finance That Empowers Low-Income Households

AJIVIKA FINANCE LIMITEDBuilding Livelihoods Through Inclusive Finance

ABOUT US

Ajivika Finance Limited (AFL) is an RBI registered Non-Banking Financial Company

(NBFC), incorporated on 28 May,1986. The company shall achieve NBFC-MFI

status by November 2019.

The company actively engages its resources to create value for the vast bottom-of-pyramid population in India by delivering structured income-generation loans. Thecompany follows the Joint Liability Group (JLG) model to provide collateral-freecredit to fund 29+ types of micro enterprises.

The company follows a very strong credit underwriting process to ensure strongborrower profile and highest asset quality.

Headquartered in Noida, company's present branch network consists of 6 branchespresent in the state of Uttar-Pradesh and Uttarakhand.

AJIVIKA FINANCE AT A GLANCE

9,200+Active

Customers

₹13 Cr+ Gross Loan

Portfolio

6Branches

(5 in Uttar Pradesh &

1 in Uttarakhand)

0.12% Portfolio-at-Risk

30+

53Employees

Incl. 29 Field Officers

₹3.34 Cr Net Worth of the

Company (to cross

₹ 5 cr by November)

zOUR MISSION

OUR VISION

OUR VALUES

“We aim to build a more prosperous and affluent India where all stakeholders benefit equally from it’s growth and

are able to contribute up to their potential. To achieve this, we endeavor to ensure access to credit for low-

income households, necessary to create self-employment and income”

“We aspire to serve our financial services at the doorstep of 10 million low-income households and in so doing

grow the size of the economic pie equitably to promote the national causes of social upliftment and financial

inclusion.”

Our values shape our thoughts, actions and character as individuals and as one team, and are represented as CHILD.

Commitment Hard-work Integrity Loyalty Discipline

Everything we do is guided by these principles. They are the fundamental strength of our business. These enduring

qualities are the shared convictions that we bring to our personal and professional conduct.”

₹1,78,547 Cr. as on March 31, 2019

which represents a

growth of 40% over

March 31, 2018

MICROFINANCE INDUSTRY IN INDIA

Gross Loan PortfolioIndustry Growth and Market Share by Lender Type

Portfolio Outstanding (in ₹Crores)

₹213,074 Cr. Disbursed in FY 2019

which has increased

by 36% as

compared to FY 2018

Loan Disbursement

Source: SIDBI MicroFinance Pulse Vol II- 2019

PAR (0-30 Days)

1.40% on March, 2019 as

compared to

4.74%on March 2017

PAR (60-90 Days)

0.24% on March, 2019 as

compared to

2.41% on March 2017

“Microfinance sector to double in

size in 5 years”

- Dr. Muhammad YunusPioneer of Micro-Finance

at Sa-Dhan National Conference 2019 Dr. Muhammad Yunus with the MD of Ajivika Finance, Mr. Yashwardhan Sahai at Sa-Dhan National Conference.

CREDIT UNDERWRITING

Ajivika Finance Limited (AFL) follows very stringent Credit Appraisal practices to ensure highestquality of assets. These practices include the following:

Mandatory House

Visits to record

consumer durables in

possession, and

observe lifestyles.

Must have

Permanent

residence in their

respective village

at least from the

last 6 months.

Collection of valid

residence proofs

including last 6 months

Electricity Bill, National ID

card, Voter ID card, Bank

statement among others.

Constant evaluation of

socio-ethnic

composition of the

population and

competitive scenario in

our areas of operation.

Proprietary credit

appraisal leveraging

14 traditional and

alternative data points

re-assessed with credit

bureau partners.

Regular field surveys to

assess political and

economic landscape,

isolate negative areas

and to devise an area-

specific strategy.

OBSERVED PROBLEM IN THE INDUSTRY

Field-officers resort to undesirable tactics including non-compliance with credit

underwriting guidelines, extending loans to family to achieve targets.

Customer protection principles are openly being violated leading to over-

indebtedness, loan defaults, deteriorating asset quality carrying contagion risk.

High concentration of micro-finance institutions in specific geographies leading to

inequitable access to loans for bottom-of-pyramid.

Even today, opportunistic money lenders are proliferating to take advantage of the

large lending gap in the economy among credit invisibles.

Lack of awareness and knowledge among MFI’s/NBFC’s to manage risks effectively,

especially on-field risks.

Industry even today is prone to very high levels of employee risk, cash risk, adverse

selection, moral hazard.

THE POTENTIAL OF MICRO-CREDIT

Low Income

71.2%Female Workers

Earns less than

₹5000/month

Rising Literacy Rate

79.8%Females are Literate in the

Country showing a CAGR

of 2.5%

High Unemployment

19.8% & 17.3%Educated Females are

unemployed in Urban and

Rural Areas respectively

Motivation for women to set up micro-enterprises

Validates the massive potential of

micro-enterprise loans in India

KEY TRACTION

✓ AFL is solving a really large lending gap that cannot be adequately served by Banks/MFI's/SHG's/NBFC’s. Target market

has an untapped potential of $125 Billion, expected to grow by 24% CAGR according to industry research bellwether

✓ Branches set up strategically in the heart of local communities served with in-house residence for field officers

✓ Strong asset quality | negligible PAR | 100% Income generation loans to enhance debt servicing capability

✓ End to End Loan Management Systems and MIS capable of handling a book size of ₹ 5000 million

✓ 100% cashless loan disbursements.

✓ Prudent Provisioning Policy | Zero Write-offs till date

✓ Very high level of involvement of promoters in running operations along with commitment, willingness and capacity to

provide funding support to scale-up and undertake geographic diversification at both state and district level

✓ NIM's at 9.8% complemented by strong fee income (LPF, insurance)

✓ Very low employee & client attrition rates.

FINANCIAL METRICS

₹3.38 CrTotal

Equity

₹3.72 CrST Loans₹1.88 Cr

LT Loans*

₹4.66 CrBusiness

Correspondent

FUNDING PROFILE*

Total Capital Deployed= ₹13.34 Cr*LT Loans are majorly extended by the promoters and

would get converted to equity by November, 2019.

42%Portfolio Growth in

Q1 FY 2019-20

1.78xLeverage Ratio

(Total Liabilities/Total Equity)

31%Capital Adequacy

Ratio

17%Marginal Cost of Borrowing

(Management is working to

reduce it to 15.5%)

18%Expected Return

on Equity

36%Borrower Growth in

Q1 FY 2019-20

Mr. Raj Vikash Verma Independent Director

• Held the position of Chairman &

Managing Director of National Housing

Bank.

• Member of the Advisory Committee of

Insolvency and Bankruptcy Board of India.

• Consultant to the World Bank Group

• Had also been the Chairman of CERSAI

• Worked in various capacities for 9 years

at the Reserve Bank of India (RBI)

• He has been the Chairman of the Board

at India Mortgage Guarantee Corporation

(IMGC)

• Whole-Time Member of Pension Fund

Regulatory Development Authority.

• Independent Director at AU Small Finance

Bank.

Mr. Yashwardhan Sahai Managing Director

• Alumnus of IIM Bangalore and

IIT Kharagpur.

• 30 years of experience in senior

leadership roles in Fortune 500

and Nifty 50 companies

• Prior to Ajivika Finance Limited,

he was the Country Business

Head of Bharti Infratel, the

leading telecom tower company

of the world

• His profitability focus,

operational efficiencies and

relentless execution continue to

shape Ajivika Finance as a fast

growing NBFC in India.

BOARD OF DIRECTORS

Mr. Titus MathewIndependent Director

• Held the position of an Executive Director

at Sa-Dhan for 16 years where he worked

closely with the Government of India and

the Reserve Bank of India.

• Member of the Board at Caspian Impact

Investment Fund from the last 15 years.

• Has been an Advisory Board Member in

two government backed entities, IRDA

and NABARD.

• Appointed as a Member of Prime

Ministers Council of Micro, Small and

Medium Enterprises.

• Was a part of the board of The SEEP

Network, based in Washington D.C.

• He is also a Managing Partner in

Market and EcoSystem Advisory.

Mr. Anuj Srivastava CTO

• 22 years of experience in the

microfinance industry

• Held the position of Director- IT

in a leading publicly listed Non

Banking Financial Company

(NBFC)

• He holds a degree in

Engineering from Bangalore

University.

• Responsible for spear-heading

the company’s IT & MIS division,

ensuring leading technology is

available for the company’s

operations.

Mr. Aditya Sahai CFO

• Brings on-board experience in

Private Equity, Investment

Banking, Corporate Finance,

Financial Engineering and Public

Economics.

• Holds a Masters in Financial

Analysis Degree from London

Business School (LBS).

• Alumnus of Shri Ram College of

Commerce, Delhi University.

• Advisor to funds in Europe.

• Founder of Blue Run Investment

Consultants.

• Cleared CFA Level 1.

MANAGEMENT TEAM

Mr. Kamal Kant Dang CEO

• 30 years of industry experience

• Kamal has established

numerous companies creating

value in social-impact, micro-

credit, automobile and

education.

• Pro-actively overlooks the field

operations to ensure seamless

delivery of the company’s micro-

loans at the last mile.

• He is also a Director at a

prominent Business School in

the National Capital Region

(NCR) of India.

Mr. Siddharth ArurAdvisor

• 16+ years in Impact Investments/Sustainable

Investments.

• Managed Financial Inclusion and Renewable

Energy portfolio of more than US $ 100 million in

Asia Pacific region.

• Senior Financial Inclusion Specialist at Grameen

Capital, Saija Finance and Sindh Microfinance

Bank.

• Has been a Business Consultant to Catalyst

Capital Advisors and CapAleph Advisors India

• Co-Founder, Agribusiness Consultancy,

AgroAccess Consulting LLP

• Has been the Regional Representative of Asia in

Developing World Markets (DWM)

Advisory Council

Present Branches• Vijaynagar

• Pilkhuwa

• Hapur

• Gajraula

• Kashipur

• Modinagar

Upcoming Branches• Pantnagar

• Haldwani

• Rudrapur

• Bajpur

• Jaspur

BRANCH NETWORK OF AFL

• Upcoming Branches are subject to

change, according to the preference of

our investors, if any.

• Due diligence of areas for opening new

branches is conducted personally by senior

management.

• Branch Offices are set-up in a cluster of 5-

6.

• AFL focusses on geographic diversification

at both state and district level.

• The company plans to expand further in the

neighboring states of Haryana, Punjab and

Rajasthan with good economic prospects

and proximity to the Head office in Noida.

Present Branches

Upcoming Branches

OUR MICRO CREDIT PORTFOLIO

Our portfolio consists of 3 loan products. The features of these loans are tailored to serve thecritical needs of the micro-entrepreneurs we empower. We systematically manage our portfolio,and seek to introduce more products including Limited Liability Group Loans, ConsumerDurable Loans, Individual Micro-Loans and Micro-insurance products to cater to the needs ofour customers.

Loan

Amount

Loan

Tenure

Equated Fortnight

Instalment

Allocation

₹ 25,000 15 months ₹ 1,000 45%

₹ 30,000 15 months ₹ 1,210 35%

₹ 35,000 18 months ₹ 1,210 20%

RISK MANAGEMENT PRACTICES

Cashless Credit

Disbursement, Zero Cash

Handling by Field Officers,

Pilot Testing of Mobile

Payments in all Branches

Financial Risk

Joint Liability Groups, Peer

Monitoring Incentives,

Regular Group Meetings,

Rigid KYC and Due Diligence

Processes, Loan Utilisation

Monitoring

Credit Risk Moral Risk

Geographic Diversification,

Area Tracking, Litigation,

Areascreening

Political Risk

Independent and Objective

Board, Strong Governance

Frameworks, Reputed Board

Advisory Team

Governance Risk

Fortnightly Instalment

Collections, Maintenance of

reserves over regulatory

minimum, diverse funding base, re-investment of returns

Liquidity and Solvency

Model Code of Conduct,

Stringent Rules, System of

Incentives, Dedicated

Employee Trainings, Field

Rotations and Best

Practices System.

Employee Risk

KYC norms, Group

Recognition Tests, Field

Officer Engagements, House

Visits

Asymmetric Information

Vigilance with help of Group

Leader, Regular House-Visits,

Verbal Pledge, Social

Pressures, Co-Borrower

Provision

Moral Risk

PROJECTIONS

FY 2018-19 (A) FY 2019-20* FY 2020-21 (P) FY 2021-22 (P) FY 2022-23 (P) FY 2023-24 (P)

Revenue ₹ 2,22,21,967 ₹ 4,47,60,640 ₹ 10,44,10,570 ₹ 23,96,25,720 ₹ 49,15,01,090 ₹ 93,17,33,920

EBIT ₹ 22,78,260 ₹ 98,87,600 ₹ 1,94,06,420 ₹ 4,27,40,680 ₹ 10,06,67,990 ₹ 20,94,23,300

PAT ₹ 12,59,350 ₹ 58,69,400 ₹ 1,16,43,850 ₹ 2,56,44,410 ₹ 6,04,00,790 ₹ 12,56,53,980

Portfolio O/S ₹ 10,19,36,278 ₹ 22,27,76,610 ₹ 52,82,30,180 ₹ 115,47,70,490 ₹ 245,17,97,670 ₹ 4,55,81,58,720

Branches 6 9 23 43 85 133

₹0

₹2,000

₹4,000

₹6,000

₹8,000

₹10,000

FY 2018-19(A)

FY 2019-20*

FY 2020-21(P)

FY 2021-22(P)

FY 2022-23(P)

FY 2023-24(P)

Projected Financials

Revenue EBIT PAT

(In Lakhs)

₹ 0

₹ 100

₹ 200

₹ 300

₹ 400

₹ 500

₹ 600

FY 2018-19(A)

FY 2019-20*

FY 2020-21(P)

FY 2021-22(P)

FY 2022-23(P)

FY 2023-24(P)

Portfolio Outstanding

(In Crores)

^Projected as on 31st July, 2019) *Actual Figures for 4 Months, till July’19, and 8 Months of Projections

FUTURE ROAD MAP

Ajivika Finance aims to capitalize on the massive opportunity in micro-enterprise lending by

expanding the business pan-India.

The company aims to achieve a Gross Loan Portfolio of ₹ 500 Million by 2020 and ₹ 2,000 Million

by 2021 that would allow it to deliver financial services to over 100,000 households.

The company also wants to foray into secured lending to micro-enterprises and to launch

it’s LLG, CGL, Individual micro-loans and micro-insurance products.

The company has set an ambitious target of establishing itself as a Small Finance Bank by 2023,

which would then lead to mandatorily listing as per Indian Regulations. This could also serve as

a lucrative exit strategy for investors of Ajivika Finance.

THANK YOU

Contact: 0120-4317430 | E-mail: investors@ajivikafinance.com | Website: www.ajivikafinance.com