Arohan Annual Report FY 20-21

The Government, RBI and other lending institutions like National Bank for Agriculture and Rural Development (NABARD), Small Industries Development Bank of India (SIDBI) & State Bank of India (SBI) also launched several other schemes to ensure liquidity availability to different lending organisations. These are Long-Term Repo Operations (LTRO), Targeted Long-Term Repo Operations (TLTRO) 1.0 and 2.0, Partial Credit Guarantee Scheme (PCGS) from RBI, along with Term Loans & Non-convertible debentures (NCDs) facilities from SIDBI, SBI Capital and NABARD. These government schemes helped Indian NBFC-MFIs ensure sufficient liquidity in hand during the externally stressed situation. Overall, the funding to MFIs were majorly through debt arrangements as debt funding for MFIs increased by 9.2% in FY 2020-21 over FY2019-20 (1). According to a speech by the Governor of Reserve Bank of India on February 5, 2021, there is a pressing need to harmonise regulations governing the microfinance lending industry in India. In recent years, as several large MFI players converted into Small Finance Banks (SFBs), the current regulations are applicable to only NBFC-MFIs, who contribute to 31% of the total microfinance lending in India, as of March 31 2021, per MFIN Micrometer Issue 37. A potential harmonisation of regulations for MFI lending can have a positive impact on NBFC- MFIs as banks and SFBs will also be governed by same benchmarks, hence eliminating the competitive edge they have currently. A consultative paper, inviting feedback from the micro-lending industry, on the same was published by the RBI on June 14, 2021. With the onset of the pandemic, Arohan’s first line of action was to adopt precautionary measures against COVID-19 to ensure safety of all employees and customers. To create extensive awareness on social distancing, the proper use of face masks and overall safety and hygiene practices among the field employees and customers, Arohan introduced guidelines covering COVID-19 symptoms, sanitation measures, travel advisories, and social distancing know-how. Arohan also implemented hygiene measures, including providing sanitisers, masks and gloves at all of its 700+ branches. In addition, during initial lockdown in India, Arohan quickly transitioned to contacting customers virtually, instead of physically, at center meetings. The Company facilitated a work-from-home policy for most Overview of Financial Year 2020-21 for Arohan Debt & Equity Mix (INR cr) Source: MFIN Micrometer Issue 37 Annual Report | 2020-2021 36