Creditaccess Grameen Ltd. · NSE:CREDITACC
Creditaccess Grameen — Investor Presentation (December 2023)
49 slides from Creditaccess Grameen's investor presentation, December 2023
Slide 1: CreditAccess Grameen Limited Corporate Presentation
CreditAccess Grameen Limited Corporate Presentation December 2023 www.creditaccessgrameen.in
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 CreditAccess Grameen
Slide 3: Discussion Summary
Discussion Summary Indian MFI Industry Overview Business Overview & Strategy Performance Track Record ESG Adherence www.creditaccessgrameen.in 3
Slide 4: Why Microfinance (micro-credit)?
Effective, Tried & Tested Model To Drive Financial Inclusion Why Microfinance (micro-credit) ? Lack of access to formal sources of credit Low-income households, Informal lenders charging exorbitant unserved / underserved by formal interest rates along with poor service credit system, fall into the t
Slide 5: Group Lending Model Focused Towards Women Borrowers
Group Lending Model Focused Towards Women Borrowers • Individual women living • Group training • Upon successful • Centre meetings are in same village, with conducted to educate completion of conducted for JLG mutual know-how and on microfinance trainings, interested customer (Joint trust, form a gr
Slide 6: Indian MFI: Largest In The World, Powering Rural Entrepreneurship
Indian MFI: Largest In The World, Powering Rural Entrepreneurship India MFI: Significant Share in Global MFI India MFI: Low Penetration, High Growth Potential Serves 70 million households 1,408 160 India accounts for MFI borrowers in India 140 ~23% of global MFI AUM are 4 per 100 population, vs. Ful
Slide 7: Evolution of Regulatory Environment Over Past Three Decades
Evolution of Regulatory Environment Over Past Three Decades Pre-2005 2006 – 2011 2012 to 2022 2022 Onwards Mostly NGOs with NGOs converting into Most consequential A significant change to support from DFIs, NBFCs and new NBFCs period the regulatory structure SIDBI, NABARD starting up New structure o
Slide 8: New Harmonized Guidelines To Protect Customer Interest
New Harmonized Guidelines To Protect Customer Interest Pre-April 2022 Pre-April 2022 Regulations Post-April 2022 Regulations Area of Regulation Regulations NBFC-MFIs Uniform Across All Entities Banks & SFBs All collateral free loans provided to households Borrower Profile A maximum borrowing cap of
Slide 9: India Is The Best Place For Microfinance Business
India Is The Best Place For Microfinance Business Strong Govt Support 1 For Financial Inclusion 6 Priority Sector Lending Efficient Business 2 (“PSL”) From Banks Model - JLG Best Microfinance Market with Long History & Proven Track Record Extensive Credit 5 Strong RBI Oversight 3 Bureau Data Strong
Slide 10: Indian MFI Industry Offers Significant Growth Potential
Indian MFI Industry Offers Significant Growth Potential Low Industry Penetration Levels, Large Untapped Opportunity Potential To Grow by 2.5x – 3.1x over Next Five Years Addressable Borrowers Rural Urban Total Active Avg. O/S Per States HHs Industry AUM HH FY23 Penetration Penetration Penetration FY
Slide 11: Discussion Summary
Discussion Summary Indian MFI Industry Overview Business Overview & Strategy Performance Track Record ESG Adherence www.creditaccessgrameen.in 11
Slide 12: Quick Snapshot
Quick Snapshot ✓ The largest and best credit rated NBFC-MFI in India with over 2 decades of experience ✓ Joint Liability Group (JLG) based lending model focused on rural women ✓ Diverse product suite catering to entire customer life cycle ✓ Calibrated, contiguous district-based expansion strategy fo
Slide 13: Growth Journey Supported By Our Promoter And Investors
Growth Journey Supported By Our Promoter And Leading Global And Domestic Investors Over The Years Received the order from NCLT to amalgamate ✓ Strong commitment by our Promoter CreditAccess India B.V. (CAI) MMFL into CA Grameen ✓ Independent, stable and professional management team ✓ Capital support
Slide 14: Strong Parentage of CreditAccess India B.V.
Strong Parentage of CreditAccess India B.V. • Wide shareholding base: 247 shareholders • Key Investors: • Olympus ACF Pte Ltd. 15.4% • Asian Development Bank 8.8% Committed to Micro Finance Business • Asia Impact Invest SA 8.8% • CreditAccess India B.V. (CAI) specializes in Micro and Small Enterpris
Slide 15: Shareholding Structure
Shareholding Structure Shareholding Pattern – September 2023 Top 10 Institutional Investors – September 2023 Axis Mutual Fund Canara Robeco Mutual Fund Others 6.08% Government Pension Fund Global (Ashmore Investments) MF, AIF, Insurance ICICI Prudential Life Insurance 15.77% Promoter Invesco Mutual
Slide 16: Experienced Management Team & Robust Board Governance
Experienced Management Team & Robust Board Governance Management Team with Decades of Experience across Banking and Finance Industries Udaya Kumar Hebbar Ganesh Narayanan Balakrishna Kamath Managing Director Chief Executive Officer Chief Financial Officer Sudesh Puthran Firoz Anam Gururaj K S Rao Ch
Slide 17: Largest Standalone NBFC-MFI As On September 30, 2023
Largest Standalone NBFC-MFI As On September 30, 2023 6.6 (Sep-23 AUM in USD Bn) 4.2 CA Grameen Market Share: 6.0% 2.7 2.6 2.3 1.6 1.5 1.4 1.3 1.2 1.1 1.1 1.1 1.1 1.1 1.0 1.0 Satin Creditcare CA Grameen Asirvad Spandana Samasta Belstar Bandhan Annapurna L&T Finance Utkarsh SFB Ujjivan SFB ESAF SFB (M
Slide 18: Consistent Value Creator
Consistent Value Creator Emerging Stronger After Every Crisis Covid-19 2,565 2,024 1,657 1,463 Demonetization 873 AP Crisis 607 375 310 CAGR 53% 176 AUM (USD Mn) 99 22 40 31 46 64 6 10 Consolidated FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 Branches 44 51 82
Slide 19: Robust Cross-Cycle Profitability
Robust Cross-Cycle Profitability Cross-Cycle ROA (%) Cross-Cycle ROE (%) Strong Cross Cycle FY19 FY21 FY22 FY17-FY18 Performance Despite Floods, Covid Covid Demonetisation Several Crisis NBFC crisis Wave 1 Wave 2 5.1% 22.2% 5.0% 4.2% 18.0% 16.3% 3.6% Avg: 13.5% Avg: 3.3% 12.3% 12.9% 2.3% 2.2% 9.0% 0
Slide 20: Consistently Displaying Strong Asset Quality Trend
Consistently Displaying Strong Asset Quality Trend Only 2.3% Write-offs (Net Of Recoveries) Over The Past 13 Years, Of Which ~80% Is Attributed To Covid Excluding Covid Period, Effective Write-offs Were Only 0.5% Of The Total Disbursement Over The Past 13 Years Performance Over April 2010 to March 2
Slide 21: Competitive Strengths
Competitive Strengths Continuous Technology Calibrated Expansion Enhancement 2 Through Contiguous 3 to Drive Operational District-Based Approach Efficiency Customer Centric Key 4 Classical Joint Lending 1 Business Model Differentiators (JLG) Model Strong Human Capital, Integrating Risk Future Proof
Slide 22: Focus on Customer Centricity, Loyalty & Retention
Focus on Customer Centricity, Loyalty & Retention “One of the Lowest Cost Organised Financer” - One Stop Shop providing Support to Various Lifecycle Needs of the Customer One of the lowest lending rates in MFI industry Loan Customer Centric Ticket Size Tenure Purpose Type Products (INR) (months) Bus
Slide 23: Calibrated Expansion Through Contiguous District-Based Approach
Calibrated Expansion Through Contiguous District-Based Approach Systematic geography selection based on the availability of CA Grameen’s contiguous infrastructure, competition, historical performance trend, social/ district-based expansion economic/ political/ climate risk, growth potential Ensures
Slide 24: Continuous Technology Enhancement to Drive Operational Efficiency
Continuous Technology Enhancement to Drive Operational Efficiency Ensures Quick And Seamless Delivery of Need Based Financial Products and Services backed by Robust Technology Infrastructure High touch-high tech delivery model: Future Upgrades & Investments • Digitized all customer touchpoints • Upg
Slide 25: Committed to Basics Through Classical JLG Lending Model
Committed to Basics Through Classical JLG Lending Model Microfinance loans are unsecured. JLG mechanism acts as security/ loan collateral Fully aligned with new harmonized guidelines in terms JLG Benefits: of - ✓ Strong group bonding ✓ Formulation of Board approved policies ✓ Mutual support – both f
Slide 26: Integrating Risk Management in Every Operating Process
Integrating Risk Management in Every Operating Process Microfinance is a Collection Business, hence Risk Management is Integral to Core Strategy and Operating Processes Contiguous Customer Employee Hiring Target Customer Customer Employee District-based Lending Model Engagement & Incentive Segment D
Slide 27: Unique Human Capital, Internal Audit & Risk Management
Unique Human Capital, Internal Audit & Risk Management Well-Established Operational Structure Multi-Pronged Approach For Risk Management Employee Hiring & Incentive 4 Business Heads Structure Internal Audit (IA): • ~90% of employees are hired fresh • IA frequency – 6 times in a year at branches, 4 t
Slide 28: Strong Internal Control Structure: Three Lines Of Defence
Strong Internal Control Structure: Three Lines Of Defence 3rd line of defence: Internal Audit team 2nd line of defence: Risk team 1st line of defence: Field & Quality Control teams Zonal Manager / State Head Zonal Manager handles 100 – 120 branches Regional / Divisional Regional Manager handles 40-5
Slide 29: Well-Diversified Presence Across India
Well-Diversified Presence Across India Our Presence as on Sep-23 Uttar Pradesh Branch Network Q2 FY24 % Share Q2 FY23 % Share 16 States & 1 UT 84 Karnataka 334 17.8% 308 18.3% 364 Districts Bihar Maharashtra 310 16.5% 294 17.5% 1,877 Branches 148 Tamil Nadu 384 20.5% 378 22.5% West Bengal Madhya Pra
Slide 30: Focus On New Product Segments, Basis Customer Needs
Focus On New Product Segments, Basis Customer Needs The Head Room Of 25% Assets Under Non-microfinance As Provided By The Regulator, Provides Us The Opportunity To Diversify Our Lending Portfolio Into Secured Lending Segments And Improve The Overall Balance Sheet Stability New Products Target Segmen
Slide 31: Well Placed To Capitalise On The Untapped Rural Financing Opportunity
Well Placed To Capitalise On The Untapped Rural Financing Opportunity Potential To Tap Large Rural Financing Opportunity ~4.6 Mn MFI Customer Base Offers Significant Rural Financing Potential Beyond Microfinance 23% Of Our Existing Customers Have Availed Retail Loans Beyond Microfinance 1% Conversio
Slide 32: Internal Capabilities Built For New Lending Products
Internal Capabilities Built For New Lending Products 88 Dedicated Branches 700+ Retail Finance Employees 500+ Field Employees (Loan Officers, Branch Managers, Area/ Regional/ Zonal work-force) 170+ Credit Appraisal Team at Branch/ Area/ Regional/ Zonal/ Centralized Technology Stack Customer Onboardi
Slide 33: Future-Proof Liability Strategy (1/2)
Future-Proof Liability Strategy (1/2) Funding Diversification • Diversify across both domestic and global markets • Expand wholesale funding base - banks, NBFCs, DFIs, SWFs, & impact investors Highest standalone rating of • Strengthen access to domestic retail/ HNI investors AA- / Stable in MFI indu
Slide 34: Future-Proof Liability Strategy (2/2)
Future-Proof Liability Strategy (1/2) Liability Mix - Institution / Instrument Wise (%) Liability Mix - Tenure Wise (%) Positive ALM Mismatch (in NBFCs - TL Months) FIs - TL Medium Term 24.4 25.2 2.8% 24.2 10.7% 23.5% MLD 19.0 19.2 19.0 0.3% Short Public NCD Term Banks - TL 6.7% Long 52.9% 7.9% Term
Slide 35: Aiming 20-25% CAGR To Cross INR 50,000 Cr AUM
Aiming 20-25% CAGR To Cross INR 50,000 Cr (USD 6 Bn) AUM Over Next 4-5 Years • Microfinance: 85-90% • Non-Microfinance: 10-15% (60-65% secured book) • Growth: 8-10% Branch, 10-15% Customer, 20-25% GLP 1 Asset Strategy • Diversify across domestic & foreign sources • Diversify across institutional & r
Slide 36: Target ROA/ROE Profile Over Next 5 Years
Target ROA/ ROE Profile Over Next 5 Years Profitability Metrics FY24 FY25 - FY28 Sustainable Growth Engine Capable GLP Growth % 24% - 25% 20% - 25% To Grow At 20-25% CAGR NIM % 12.7% - 12.8% 12% - 12.2% Cost-to-Income Ratio % 31% - 33% 33% - 35% Operating Costs / AUM % 4.7% - 4.8% 4.5% - 4.7% Strong
Slide 37: Discussion Summary
Discussion Summary MFI Industry Overview Business Overview & Strategy Performance Track Record ESG Adherence www.creditaccessgrameen.in 37
Slide 38: H1 FY24: Key Performance Highlights
H1 FY24: Key Performance Highlights NIM Cost/Income Ratio GLP Disbursements PPOP 13.1% 31.3% INR 22,488 Cr INR 9,737 Cr INR 1,106 Cr (USD 2.7 Bn) (USD 1.2 Bn) (USD 135 Mn) Wtd. Avg. COB Opex/GLP Ratio (+36.0% YoY) (+49.3% YoY) (+77.3% YoY) 9.7% 4.6% Total Equity ROA CRAR Total GNPA: 0.77% PAT INR 5,
Slide 39: Performance Vs. Annual Guidance
Performance Vs. Annual Guidance FY24 H1 FY24 Reasons For Revised Key Indicators Guidance Performance Outperformance FY24 Guidance • YoY growth is higher on a low base GLP Growth % 24.0% - 25.0% 36.0% 24.0% - 25.0% of H1 FY23 • Superior asset quality leading to minimal interest reversals • Strong con
Slide 40: Past Five Years Performance Track Record (1/4)
Past Five Years Performance Track Record (1/4) Gross Loan Portfolio (AUM) (INR Cr) Active Borrowers (‘000) CAGR 31% CAGR 15% 22,488 (USD 2.7 Bn) 4,603 21.031 (USD 2.6 Bn) 4,264 4,055 3,912 3,824 16,599 (USD 2.0 Bn) 13,587 (USD 1.7 Bn) 11,996 (USD 1.5 Bn) 2,470 7,159 (USD 0.9 Bn) FY19 FY20 FY21 FY22
Slide 41: Past Five Years Performance Track Record (2/4)
Past Five Years Performance Track Record (2/4) Branch Network Loan Officers Employees CAGR 28% CAGR 19% CAGR 20% 1,877 1,786 1,635 13,336 19,241 1,424 11,490 1,393 16,759 10,770 15,667 9,688 9,559 14,496 14,399 5,768 670 8,064 FY19 FY20 FY21 FY22 FY22 H1 FY24 FY19 FY20 FY21 FY22 FY23 H1 FY24 FY19 FY
Slide 42: Past Five Years Performance Track Record (3/4)
Past Five Years Performance Track Record (3/4) Disbursements (INR Cr) Margin Analysis (%) INR 18,539 20.9% 15,466 20.0% 19.4% (USD 2.3 Bn) 18.8% 18.3% 18.9% (USD 1.9 Bn) 10,389 11,011 INR 9,737 12.7% 12.2% 13.1% 8,221 (USD 1.3 Bn) (USD 1.3 Bn) 10.7% 10.9% 11.6% (USD 1.2 Bn) (USD 1.0 Bn) 10.4% 10.0%
Slide 43: Past Five Years Performance Track Record (4/4)
Past Five Years Performance Track Record (4/4) Total Income, NII, PPOP (USD Mn) PAT (USD Mn) 433 101 335 85 301 272 295 205 202 156 181 187 44 39 40 133 103 184 16 116 131 135 70 84 FY19 FY20 FY21 FY22 FY23 H1 FY24 FY19 FY20 FY21 FY22 FY23 H1 FY24 Total Income NII PPOP Total Equity (USD Mn) & Debt/E
Slide 44: Early Risk Recognition & Conservative Provisioning Policy
Early Risk Recognition & Conservative Provisioning Policy RBI Norms IND-AS (NBFC_MFI) CA Grameen Policy Standard 0-15 days (MFI) 0-90 days Stage I 0-30 days Assets 0-30 days (Non-MFI) Asset Sub-Standard 16-60 days (MFI) 91-180 days Stage II 31-90 days Classification Assets 31-90 days (Non-MFI) Loss
Slide 45: CA Grameen Vs. MFI Industry: Asset Quality Trend During Covid
CA Grameen Vs. MFI Industry: Asset Quality Trend During Covid MFI Industry 15.0% 14.1% 9.3% 9.1% 9.1% 6.9% 8.4% 9.2% 4.5% 3.7% 3.3% 6.0% 5.8% 2.2% 1.6% 3.7% 3.7% 2.7% 2.2% 0.7% 1.1% Jun-20 Dec-20 Jun-21 Dec-21 Mar-22 Jun-22 Mar-23 PAR 30 - 180 PAR 90 - 180 PAR 180+ Note: PAR – Portfolio at Risk at v
Slide 46: Discussion Summary
Discussion Summary MFI Industry Overview Business Overview & Strategy Performance Track Record ESG Adherence www.creditaccessgrameen.in 46
Slide 47: ESG Compliance Opens Access To Larger Pool Of Impact Funds
ESG Compliance Opens Access To Larger Pool Of Impact Funds Inherent Business Strengths Strategic CSR Initiatives • 99.9% loans with positive E & S impact • Mobile health check-up vehicles • Responsible Lending at one of the lowest interest rates • Improvements in rural health infrastructure • 99.9%
Slide 48: Social Bond / Loan Framework: For Socially Relevant Funding
Social Bond / Loan Framework: For Socially Relevant Funding Second Party Opinion (SPO) From Sustainalytics Sustainalytics Is Of The Opinion That The Ca Grameen’s Social Bond & Loan Framework Is Credible And Impactful And Aligns With The Social Bond Principles 2021 & The Social Loan Principles 2023 S
Slide 49: Thank You!
Thank You! Thank You 49 www.creditaccessgrameen.in www.creditaccessgrameen.in
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