Arohan Financial Services Limited | Annual Report 2021-22

Sahbhaagi: Arohan introduced Sahbhaagi’, an industry-first centre reward programme, which seeks to recognise regular centre attendance and timely repayment with benefits to the Centre Members and Centre Coordinators for their efforts in ensuring attendance and repayment of their peer groups. Khaas: Arohan intends tooffer afirst-of-its kind model in the industry called ‘Khaas’ for used- to-credit customers which will require fewer in-person interactions with Field staff. Through this model, Arohan’s customers are likely to have a fully digitised loan renewal processes, cashless repayments and special benefits such as lower interest rates and better rewards. Digital Arohan: In FY2022-23, Arohan plans to open, a first of its kind in the industry, ‘Digital Arohan’. Digital Arohan will enable Arohan’s microfinance customers to opt for a loan service effortlessly with the use of a mobile application alone, without any human touch, and get her bank account credited in amatter of just a couple of hours. Arohan will leverage its robust digital process, that lays the foundation of going digital with its lending model. PROCESS FRAMEWORK Operational Architecture Arohan’s entire organic operation is categorise under six Zones. Each Zone has three to five RegionalOffices (RO)witha total of 28Regional Offices overall and each RO has four to seven Areas mapped to it. Under each Area there are four to six Branches summing to a total of 740 Microfinance branches as of March 31, 2022. Cashless Focus Establishing a completely cashless back-end is one of the key focus areas of Arohan. This is in tune with one of the key national agendas of a cashless economy. Arohan has steadily transformed its disbursement and collection processes to maintain consistent levels of customer service while enhancing operational efficiencies and scale. Cashless Disbursement: Arohan continued with its 100% cashless disbursement system as of March 31, 2020 and continued to maintain the same during FY2021-22. This process is enabled through the centralised Loan Management System, Profile by FiS, which facilitates initiation of NEFT transactions directly to customers’ accounts. Cashless Collection: During the pandemic, Arohan achieved significant progress in its drive for cashless collections. Having partnered with a leading Payments Bank, Arohan has introduced cash-drop facility for its customers at the Banking Outlet points which are easily accessible across geographies. The organization is live on most of the customer-initiated and Arohan- assisted cashless payment solution models such as Bharat Bill Pay System (BBPS), Aadhaar Enabled Payment System (AEPS) and Point-of-Sale (POS) machines for debit card payments. Additionally, the Company has introduced UPI AutoPay (2 nd in Microfinance industry), WhatsApp payment services and Payment through the “Apna Arohan” Customer app. RECOVERY VERTICAL Arohan takes a measured approach for the prevention, maintenance and curing of overdue accounts. The Company applies careful strategic methodology to identify the best collection and recovery mechanisms, and appropriate steps are undertaken to cure stressed accounts at the earliest. In FY2021- 22, Arohan strengthened its recovery efforts and established a dedicated frontline cadre of Recovery-CSRs (RCSR) monitored centrally for the management of NPA customers. Recovery performance With the surge in COVID-19 cases and the resultant impact on livelihoods, the Recovery team was strengthened and scaled appropriately. Arohan also participated in the National Apprenticeship Programme Scheme and on boarded young recruits through the programme for its Recovery vertical. 57 Annual Report | 2021-2022 Management Discussion & Analysis