Utkarsh Micro Finance

Utkarsh Micro Finance Ltd., a NBFC-MFI, started operations in August 2009, provides affordable & accessible banking services in to the unbanked Northern and Central India population who have the skill but are in need of capital.

Company covers major areas of UP, Bihar, MP, Uttarakhand, Delhi, Himachal Pradesh, Haryana, Maharashtra, Jharkhand and Chhattisgarh

Utkarsh provides Group Loans in the name of "Utkarsh Pragati", "Utkarsh Kiran" and Utkarsh Asha" from Rs. 6,000 to Rs. 50,000. Micro Enterprice Loan in the name of "Samridhi Secured", "Samridhi Unsecured", "GrihSudhar Secured", "GrihSudhar Unsecured" for Working Capital or House Extension from Rs. 50,000 to Rs. 3,00,000. Under Housing Loan category, company provides Rs. 1,00,000 to Rs. 5,00,000 loans under the scheme "Utkarsh Grih Vistar" and "Utkarsh Grih Uthan". Apart from this company provides a pension scheme - "NPS Lite" that is with a mission of providing financial inclusion to the population during non productive years. The bank has also started lending to small corporates with a cap of Rs 25 crore. 

Utkarsh enjoys a support of eminent investors like Commonwealth Development Corp. (a UK Development Finance Institution wholly owned by UK Govt.) a world's oldest DFI with a history of making successful investments in businesses which have become industry leaders, IFC who is the member of World Bank Group, among others. Foreign holding in the holding company is about 47 per cent , brought down from about 85 per cent a year ago to comply with the regulation for small finance bank venture.

Domestic Equity of ₹395 crore – For setting up the Utkarsh Small Finance Bank, reputed institutional investors - HDFC Standard Life Insurance Co. Ltd, HDFC Ergo General Insurance Co. Ltd, ICICI Prudential Life Insurance Co. Ltd, Shriram Life Insurance Co. Ltd, RBL Bank Ltd, Small Industries Development Bank of India (SIDBI) and private equity firms like Faering Capital and Arpwood Capital have made equity investment. Post this investment, the company is now a Domestic Company, which is an important eligibility parameter for an SFB.

In the recent interview, Govind Singh, MD & CEO said that process of becoming a Scheduled Bank is on and Utkarsh is hoping to become a universal bank in next 5 years time. He said as soon as the bank can build a 15,000 crore balance sheet, it will seek RBI's nod for full banking.

In January 2017, company have mobilised ₹450 crore of deposits and have seen cost of funds coming down by 100 bps. The deposit base is low as compared to the overall borrowing which is ₹2,000 crore. Govind expect cost of funds to reduce another 150 bps in the next one year as company aims to mobilise ₹2,000 crore deposits by March ’18.

Utkarsh has 351 branches and are under core banking solution now. The plan of the company is to start accepting deposits in these branches. We have also launched 35 brand new branches and another 20 are in the pipeline.

The company has over 1.2 Mn active clients with over ₹17,700 Mn of portfolio outstanding as at the end of Q2FY17. Utkarsh aims to cater the financial needs of over 10 mn customers by 2021.

ICRA has assigned an MFI grading of M1 (pronounced M one) to Utkarsh Micro Finance Limited (UMFL). The grading indicates that in ICRA's current opinion, the MFI's ability to manage its microfinance activities in a sustainable manner is the highest.

Utkarsh registered an 86% increase in interest income from Rs. 120.97 crore in FY 2015 to Rs. 224.77 crore in FY 2016 which reflected in a 130% increase in PAT from Rs. 16.02 crore to Rs. 36.81 crore during the same period. While due to fall in the cost of funds, interest expenses showed a 72% increase from Rs. 65.07 crore to Rs. 111.64 crore resulting in higher net interest margins.

At the close of Q1, FY 2017-18 the JLG active client base was 1,211,936 with portfolio outstanding at ₹17,089.54 Mn. The MSME portfolio was ₹797.1 Mn with 16,389 active clients and Housing Loan had 171 active clients with ₹55.7 Mn portfolio outstanding. The total portfolio of the Bank was ₹17,942.34 Mn, as on June 30, 2017.