Arohan Annual Report FY 20-21

The improved collection efficiency has led to improved Portfolio At Risk (PAR) figures which settled at 8.66% of PAR 30 (%) in March 2021 as compared to a high of 12.93% in December 2020, as per MFIN Micrometer, Issue 36. In response to the COVID-19 situation, different measures were introduced by Indian regulatory bodies to ensure credit availability for regular paying customers and also to lower economic stress for customers during the period of lockdown. 1 Moratorium to Regular customers: The Reserve Bank of India first announced the moratorium for a period of three months from March to May 2020, which was then extended to August 31, 2020. Also, India’s Honourable Supreme Court further provided relief to borrowers by providing an order to lenders to provide ex-gratia compound interest relief for the moratorium period. 2 Loan interest subvention scheme: The Government of India provided 2% interest subvention to loans given under the MUDRA Shishu scheme for eligible borrowers. These loans are up to a ticket size of INR 50,000 and are primarily given by NBFC-MFIs catering to low-income groups of borrowers. 3 Loans for Street Vendors: The government unveiled an INR 50 billion special credit facility for street vendors under the Pradhan Mantri Street Vendor’s Atmanirbhar Nidhi (PMSVANidhi) scheme, which allowed them to get access to an initial working capital of up to INR 10,000 collateral-free. Over 2.18 mn street vendors have already been supported through this special credit facility and have received INR 21.64 Bn as of March 31, 2021 (source: https:// pmsvanidhi.mohua.gov.in/Home/PMSDashboard. 4 Code for Responsible Lending (CRL), which was launched in September 2019 by MFIN and Sa-Dhan along with Finance Industry Development Council (FIDC) for India’s micro- credit industry with an aim of bringing more transparency and addressing customer centric issues, got wider acceptance in FY 2020-21, with more than 100 entities adopting it for their operations. Microfinance Industry PAR(%) Trend Management Discussion & Analysis 35