Arohan Annual Report FY 20-21

We launched several new products and initiatives: Sahbhaagi – our center reward programme to motivate borrowers to attend center meetings and pay on time, Bharosa - product to help our regular clients with extra credit and Udaan - a special credit programme for existing customers. Wealsoscaledoureffortsoncashless repayments, through BBPS/ PayTM/ AePS and M-POS devices, making it convenient for the customers to repay during the pandemic. We raised an additional INR 168 Cr from our Promoter group, as well as an existing HNI investor and two new investors in February 2021. In line with our objective to raise capital andmove towards a possible listing, we filed our Draft Red Herring Prospectus (DRHP) with Securities and Exchange Board of India (SEBI) for a possible listing through an Initial Public Offering (IPO). We got the approval from SEBI on April 23, 2021, which is valid for 12 months from the date of such approval. Our ability to raise debt at fine rates continued last year where we raised over INR 3,000 Cr across lenders and instruments despite a very difficult external environment. With the fine borrowing rates, we could pass on the benefits to our borrowers and were among the three lowest-priced MFIs in the country. The continuing impact of the pandemic on the livelihoods and the slow journey back to normalcy has resulted in us having to take additional provisions as we operate on an IND-AS accounting methodology with an Expected Credit Loss (ECL) model. Given our conservative stance, we have preferred to take the additional provisions rather than change the model, even though this is unprecedented period. Our focus on strengthening the organisation structure and being ready for the next phase of growth continued. We strengthened our Recovery CSR cadre all across and initiated a settlement programme called Sandhi in February, 2021. We also established a separate and independent Credit function and a Deputy Business Head structure for better operational management. Our Bazaar and Recovery verticals would now be managed by a senior resource assigned to the Business Head for better tracking and progress. We also invested in building a Zonal and Regional training structure and the Internal Control & Quality vertical grew to have last mile connectivity and presence at the Branch level to ensure a strong “check and balance” mechanism for our growth plans. Our MSME business was hived off to Ashv, our Group NBFC company, to help consolidate all non- MFI lending activities in one place. Our inorganic business extended its support to existing and new relationships, given the overall tight liquidity position externally, especially for small and medium MFIs whom the vertical caters to. One of our key strategic focus areas is to move towards a balanced workplace, especially given the fact that as of September 30, 2020, over 97% of our borrowers were women. With a clear action plan, we improved our gender balance from about 6% in April 2020 to over 10.88% as of March 2021. In line with our employee focus, we were certified as a “Great Place to Work” and were ranked 86th among the best companies to work for in India by theGreatPlace toWork Institute, India in2020. The Company also ranks among the Best Workplaces in Microfinance India 2021, and among India’s 30 Best Workplaces in BFSI - 2021 as per assessment Managing Director’s Ad d ress 7