Annual Report
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Annual Report SHAKTI MAHILA SANGH 2018-19 Letter from the CEO This year has been a year of growth coupled with efficiency for Shakti Mahila Sangh (SMS). SMS could expand to 814 villages building a membership base of 28, 540 women with a per- mission to operate in seven districts of Madhya Pradesh. Operationally we focused on expand- ing in the two new branches opened during 2017 -2018. As on 31st March 2019, the gross portfolio out- standing was INR 38.1 crore which is 22% more than as on March 2018. This year, we focused on increasing our own portfolio and achieved 65% of the gross portfolio (INR 24.65 crore) as own portfolio. This year, SMS reduced its de- pendence on BC portfolio restricting its BC portfolio to 35% of total portfolio. SMS has doubled its deposits from INR 4.9 crore as on March 2018 to INR 8.2 crore as on March 2019 with increasing the average deposit per member to double its value during the last 12 months and introduction of daily deposit product. SMS has launched a new saving product wherein the members can save daily deposits of Rs 30/50/100 for a period ranging from 1-2 years. SMS projects daily collections to reach Rs. 50 lakhs by the end of August 2019.SMS will also launch its new individual loan product in the coming finan- cial year. SMS has been able to achieve 100% repayment rate in the last 5 years and this year also we could maintain the same. The overall good performance on the portfolio quality is due to good credit culture, client selection and orientation, peer pressure to maintain client discipline, reli- able assessment of repayment capacity of borrowers and prompt follow-up in case of delin- quency. This year SMS could also able to improved operating expenses ratio (OER) has improved from 15.5% in FY18 to 12.9% in FY19 due to decrease in personnel expenses. Operational Self Suffi- ciency for FY19 increased to 121% from 118% in FY18. SMS has applied and is hoping to receive Multi State Cooperative Licence and start operations in adjoining districts of Uttar Pradesh and Chhattisgarh and envisions to reach gross outstanding portfolio of Rs.75 crore. In Nutshell, I would like to conclude that FY 2018-2019 was a successful years for SMS. SMS not only could provide financial services to its members but also a set of non financial services. It has also given the confidence to expand our operation in more areas that we could serve more people from underprivileged section and achieve our mission and vision. Shakti Mahia Sangh in Brief Name of the Organization Shakti Mahila Sangh Bahu-Uddeshiya Sahkari Samiti Maryadit Majholi (SMS) Head Office Address Sai Sadan, Near Petrol Pump, Sihora Road, Majholi- 483336, District Jabalpur, Madhya Pradesh Email: [email protected], [email protected] Cell phone: +91 777 301 2405, +91 9584 433 328. Landline: +91 7624 244 488, Fax : +91 7624 244 008. Registration Number and Date Amended number J.R./J.B.R / 13 / 20, (Old number J.R / J.B.R / Swa / 05 / 31, Dated – 2 / 4 / 2007) Niti Ayog Registration MP / 2018 / 0199889 Rating (External) for MFI β+ by M- CRIL in June 2019 β+ by M- CRIL in May 2018. Act Under Which Registered Registered as Cooperative Society under Madhya Pradesh Swayatta Sahkarita Adhiniyam, 1999 ( Old Act) on 2nd April 2007 and is Currently Recognized Under the Amended Act Madhya Pradesh Sahkari Society Adhiniyam, 2012 Operational Area Seven Districts of Madhya Pradesh: Jabalpur, Mandla, Seoni, Dindori, Narsingpur, Chhindwara and Katni district of Madhya Pradesh state of India. Name of the chief functionary Mr. Narendra Kumar Parihar, Chief Executive Officer, Shakti Mahila Sangh, Email: [email protected], [email protected] Cell phone: +91 777 301 2405, +91 9584 433 328. Background of Shakti Mahila Sangh (SMS) Shakti Mahila Sangh was started as a three year action research project of Ministry of Rural Develop- ment (MORD) which organised women SHG members in the form of a federation to collectively carry on retail business. However, despite the novel objectives of the project, it could not be continued primar- ily due to fund crisis and typical low margins in retail business. The project officially ended in 2007, with the federation having no legal standing and in deep financial crisis. However, the Social Capital created during the project could not have been left in vain so the federation of women was registered as a “Shakti Mahila Sangh Bahu-Uddeshiya Sahkari Samiti Maryadit” or Shakti Mahila Sangh (SMS) under the Madhya Pradesh Swayatta Sahkarita Adhiniyam, 1999 (Old Act) on April 2nd, 2007 and is currently recognized under the amended act Madhya Pradesh Sahkari Society Adhiniyam,2012 .The main purpose for creating this co-operative was to use the power of the collective for financial inclusion along with livelihood support services to its members. This was done with our belief that along with the financial services, we also need to provide livelihood support service to bring positive change in the lives of its members. Over the period of time, Shakti Mahila Sangh has grown and now provides a range of financial and live- lihood support services to its members. As on March 31, 2019 SMS was operating in 814 villages through 2,815 SHGs with a membership of 28,540 women with active borrowers base of 27, 465 women maintaining client attrition rate low at only 1.6%. The total portfolio was INR 38.1 crore with 65% of the portfolio (INR 24.65 crore) as own portfolio. This year, SMS reduced its dependence on BC portfolio restricting its BC portfolio to 35% of total portfolio. SMS has doubled its deposits from INR 4.9 crore as on March 2018 to INR 8.2 crore as on March 2019 with introduction of daily deposit prod- uct. SMS could double its borrowings from public sector banks from INR 3.3 crore in FY 2018 to INR 7 Crore in FY 2019. Operational Area: SMS has its head office at Majholi (Jabalpur) and currently has 9 microfi- nance branches in Jabalpur, Katni and Mandla districts. We are planning to open 3 new branches during the current finan- cial year, 2018-19. SMS has the permis- sion to operate across seven districts (Jabalpur, Katni, Mandla, Dindori, Narsinghpur, Seoni and Chindwara) of Madhya Pradesh. Team Shakti Vision “To establish an economically & socially empowered and healthy society where women become financially independent with sus- tainable livelihood activities.” Mission "To work with poor women by providing financial & non-financial services that enable them to enhance their income and make them financially literate & socially empowered" Values of the organisation Values are timeless principles that guide an organization. They set the norms of behaviour for every- body in the organization. These values are summarised as “SHAKTI” and are explained below: Service: SMS will strive to provide efficient, convenient and timely service to its members Honesty: SMS will be honest in its workings and in dealing with its members and other stakeholders, as well as in terms of reporting and information management Attitude: SMS will strive to achieve the highest degree of member service in workings with members Knowledge: SMS will strive to know the needs of members to serve them in most efficient and con- venient way Transparency: SMS will provide complete and accurate information to our members and external stakeholders about financial and livelihood support services Integrity: SMS will endeavour to empower members by providing financial and livelihood support services in a manner that is ethical, dignified, equitable and cost effective. Member Protection Principles APPROPRIATE PRODUCT DESIGN AND DELIVERY: We will take adequate care to design products and delivery channels that do not cause our members any harm. Products and delivery chan- nels will be designed considering our situation and our need. PREVENTION OF OVER-INDEBTEDNESS: We will take adequate care in all phases of our credit process to determine that our members have the capacity to repay without becoming over- indebted while offering loan products to them. TRANSPARENCY: We will communicate clear, sufficient, and timely information in a manner and language that our members can understand so that they can make informed decisions. RESPONSIBLE PRICING: Pricing, terms, and conditions will be set in a way that is affordable to our members while allowing for our institutions to be sustainable. We will also follow the guidelines of the regulatory bodies in deciding the price, terms and conditions. FAIR AND RESPECTFUL TREATMENT OF MEMBERS: We will treat their members fairly and respectfully. There will not be any scope for discrimination. We will ensure adequate safeguards to detect and correct corruption and abusive treatment. PRIVACY OF MEMBER DATA: The privacy of individual member data will be respected in ac- cordance with the laws and regulations and will only be used for purposes specified when the infor- mation is collected, unless otherwise agreed with the member. Organisational Structure Governance: SMS has 12 members’ active Board of Directors including 9 democratically elected community members. The CEO, CGM-Operations and CGM-HR & Admin are non‐elected members of the Board. To provide professional guidance in strategic decisions to Board, SMS has constituted a five- member Advisory Committee, having enriched experience in microfinance and banking sector. They provide support through fund mobilisation, systems upgrade, formation of policies, review the audit findings operational practices and filing of returns. Both Board and Advisory Committee meet every quarter. OUR PRODUCTS AND SERVICES Financial Services : Our approach is inclusive and membership to SMS is available to all who qualify our minimum basic criteria i.e.