About Midland Micro Finance Limited Unlisted Shares

About Midland Microfin

(i) Midland Microfin Limited (MML), founded in 2011, is the first Punjab-based microfinance institution (MFI). The institution focuses on financially and socially empowering women by providing small business loans. The Company is registered as an ‘NBFC – MFI’ with the Reserve Bank of India (RBI).

(ii) At present MML has got a network of 154 branches, which is spread out in 5 States and 1 Union Territory viz. Punjab, Haryana, Rajasthan, Uttar Pradesh, Bihar, and Chandigarh. In 2018-19, the company has opened 50 new branches and with an objective to increase the geographical diversification, the majority of the new branches during the year have been opened in the states of Eastern U.P. and Bihar.

(iii) In 2019, they have opened four Regional Offices in Jaipur, Chandigarh, Varanasi & Patna, to monitor the business progress effectively.

(iv) The core business philosophy of the company to have a stringent lending process and controls at every point of delivery which has enabled the company to maintain its asset quality. They had easily recovered their loans even during demonetization.

Type of Loan Products:

(i) Business Loan:

The company encourages entrepreneurship amongst women as a sustainable source of livelihood by providing business loans for working capital. Business Loans give economically active women access to finance in order to support their micro-enterprises.

They give Rs. 11,000-30,000 and 31,000-50,000 ticket size loan on interest rate of 25.20% for 1 year and 2 year, respectively.

(ii) Water Purifier Loan:

It was observed that people, especially in rural areas, spend a hefty amount of their money on their medical expenses. It not only causes a burden on their finances but is also too much bothersome. The quality of water in Punjab nowadays is not good and contains a lot of toxic elements that are hazardous for health, a water purifier has become the basic necessity of every household.

They give a loan in the range of Rs. 4200 to 8500, with an interest rate of 25.20%, for the duration of 6M, 9M and 11M.

(iii) Sewing Machine Loan:

To provide products and services of outstanding quality to our members, Midland Microfin Limited has collaborated with Greenlight Planet India Pvt Ltd., which is one of the leading Dealers & Manufacturers of Solar Products, to facilitate the services with the mission of Serving Members “Beyond Microfinance.

Loan Size of Rs. 3520 for an interest rate of 25.20%, for 6M, 9M and 11M.

(iv) Solar Lamp Loan:

To provide products and services of outstanding quality to our members, Midland Microfin Limited has collaborated with Greenlight Planet India Pvt Ltd., which is one of the leading Dealers & Manufacturers of Solar Products, to facilitate the services with the mission of Serving Members “Beyond Microfinance.

Loan Size of Rs. 2899 for an interest rate of 25.20%, for 6M, 9M and 11M.

(v) Udaan-Individual Loan:

Udaan loan product is given to MML’s existing customers for working capital as well as a capital investment in their existing business. It is one of MML’s first few attempts to develop individual credit products for its loyal customers.

Loan Size of Rs. 60,000 to 1,00,000 for interest rate of 25.20%, for 2 years.

Facts Sheet:

(i) Having service in 15,734 Villages of India.

(ii) As of March 31, 2019, the borrower base of the Company is 2,96,238.

(iii) Registered growth of 92% in terms of total assets, with total assets amounting to Rs. 748 Crores as on March 31, 2019.

(iv) Opened 54 new branches in 2019.

(v) Loan portfolio of Rs. 549.07 in 2019, up from Rs.350.79 crores in 2018, a growth of 56.53%.

Credit Strengths:

Improved Operational Performance: Number of active borrowers increased from 216336 as on March 31, 2018, to 296239 as on March 31, 2019. The number of branches increased from 104 as on March 31, 2018, to 154 as on March 31, 2019, and further increased to 177 during

the H1 FY20.

Healthy Capitalization: MML has maintained its CRAR at above the basic requirement of 15% since inception. It reported a CRAR of 23.32% as on March 31, 2019. The company Received 40 Crs of capital infusion during the last fiscal that helped the company keep enough cushion for expansion. Tier I CRAR improved from 14.27% as on 31 March 2018 to 18.19%

as of 31 March 2019.

Sustained Asset Quality: The Company has been consistent in maintaining its asset quality. As of March 31, 2019, Gross NPA was 0.47% of the total loan portfolio. The company has provided adequately for the same resulting in Net NPAs of 0.04%. The collection efficiency of the company increased marginally from 99.38% as on March 31, 2018, to 99.66% as on March 31, 2019.

MML has been promoted by Mr. Amardeep Singh Samra, who is also the promoter of Capital Small Finance Bank (erstwhile Capital Local Area Bank). The promoters have an experience of more than four decades in asset financing. The company has also hired qualified and experienced professionals to manage different aspects of its operations.

Business Updates of FY20-21

1. In FY20-21, Midland Microfin has completed 10 years of journey. The journey of MML is thrilling as they have started with one branch, have grown to 217 branches, from first group of women customers to serving & empowering more than 4 Lakh customers and from one state to 9 states & UT.

2. As on 31.03.2021, the Asset size has increased to 1100 Crores.

3. Less Impact of Covid-19= 97% of Midland Microfin Ltd.’s (MML) borrowers are in rural areas (which fortunately have relatively lesser Covid19 incidence), and 62% engage in “essential services” activities such as dairy or agricultural activities – hence their cash flows and repayment capability are largely intact. Pursuant to the order issued by the Ministry of Home Affairs on 15th April 2020, 45% of MML’s branches became operational by April-May end fully complying with the regulatory guidelines and prescribed Covid norms.

4. Midland Microfin has expanded its distribution capabilities and has expanded its presence in the state of Gujarat by adding 20 new branches overall to its network that has been scaled to the level of 217 branches as against 197 in the previous year.

5. During the Financial Year 2020-21, MML has disbursed loan worth Rs. 688 Crores showing decrease of 33.42% as compared to previous year’s loan disbursals of Rs. 1034 Crores due to COVID-19 pandemic and restrictions in certain regions. As on 31.03.2021, cumulative disbursed loan is worth Rs. ~3800 Crores.

State-wise distribution of loans

Bihar = 650 Crores, Gujarat = 1 Crores, Haryana = 400 Crores, HP = 4 Crores, Jharkhand = 58 Crores, Punjab = 1805 Crores, Rajasthan = 627 Crores, and Uttar-Pradesh = 242 Crores.

Financial Updates of FY20-21

1. During the Financial Year 2020-21, Gross Income of the Company increased to Rs. 192 Crores registering a growth of 4.45% over the previous year’s Gross Income of Rs. 184 Crores. The contributing factors to this growth in income were increase in the interest income on JLG loan portfolio.

2. Profit after Tax (PAT) stands at Rs. 14.6 Crores at the end of the Financial Year 2020-21 recording a decline of 21.91% over the previous year’s PAT of Rs. 18 Crores due to creation of higher provision (ECL) during the current year considering the impact of Covid.

3. As on March 31, 2021, the Gross NPA stood at 1.69% as against the previous year’s figure of 0.57%.