Arohan Financial Services Limited | Annual Report 2022-23

“Fraud Management System”, developed in-house for faster reporting, tracking, and closure of fraud cases in the business, providing a “Report to Resolution (R2R)” facility with real-time tracking and a dashboard of all fraud cases. 3. Arohan launched “Sandesh”, a first-in-the-industry, in-house developed Enterprise Risk Management (ERM) application to manage the risk of a growing business. This platform will enable the teams to monitor and manage risks that are related to the strategic goals of the Company in an efficient and robust manner. 4. Arohan deployed the microfinance industry’s first- in-the-sector credit acquisition scorecard, ‘NIRNAY’ during the year. With this, the Company now offers differentiated Credit Risk pricing to higher-risk customer segments, in line with the Credit Risk Pricing decision that came into effect on April 1, 2022, per the revised guidelines of the Reserve Bank of India. With the view of revamping its Bazaar loan product, which is specific to the male segment, Arohan announced the launch of a new business vertical, the Micro Enterprise Loans (MEL) with the aim of fulfilling the working capital needs of micro & small businesses. Arohan continues its focus on strengthening its connect with its stakeholders. To this effect, the Company launched its new website in FY 2023, which is in line with its Vision of becoming a preferred, digitally advanced financial inclusion institution for its customers, a preferred place to work for all employees, and a preferred partner for all investors and lenders. The new website is designed to be user-friendly with easy-to-access tabs on the latest uploads, Investor Relations, Newsroom, Careers, and the Company’s Environmental, Social, and Governance focus for quick information. Thefinancial year alsoearnedmany recognitions for the Company. Some notable ones include the ‘Microfinance Company of the Year’ Award at the 3rd Annual BFSI Technology Excellence Awards programme, organised by Quantic, the Best Risk Management Initiatives Award, and the Best in Technology Innovations Award by the Association of Microfinance Institutions, West Bengal. Our commitment to best-in-class and future- ready technology interventions was further reinstated with the landmark ISO/IEC 27001:2013 certification on Arohan’s Information Security and Management Systems received from the British Standards Institution (BSI), while our Internal Audit function continues to be an ISO 9001:2015 certified quality vertical. 4) The Assam Microfinance Incentive and Relief Scheme (AMFIRS) 2021: Earlier in June 2021, the Government of Assam announced a historic Assam Microfinance Incentive and Relief Scheme (AMFIRS) with the objective to strengthen the long-term view of ensuring the continuity of micro-finance in supporting the economic activities of low income and poor households in the state. In FY 2023, Cat 1 and 2 were successfully rolled out. Overview of Financial Year 2023 for Arohan The FY 2023 was a year of action and growth for Arohan, as the Company restored normalcy, post the ensuing impact of the pandemic. The Company grew by 30% on its Gross Loan Portfolio. While ensuring the reactivation of customers, Arohan also focused on helping customers get back to the centres and restore centre discipline through various initiatives, curing repayment and credit health. To this effect the Company structured out a Debt Receivable Department (the erstwhile Recovery Vertical) with an additional focus on recoveries from the PAR61-90 customers, along with the existing/usual NPA portfolio, thereby optimising productivities of its resources insyncwiththeBusiness&Collectionsvertical that focuses on sourcing new business and collections from customers under the 60 days’ delinquency. In FY 2023, Arohan focused on the credit requirements of existing customers rather than acquiring new customers. All these efforts have put the Company with one of the best NNPAs in the industry of 0.21%, as of March 2023. Our efforts are further recognised with our dual credit rating of A- from both CARE and ICRA (upgraded to Stable Outlook). The Company expanded operations to the states of Rajasthan, Haryana and Uttarakhand, and is present in 17 states with 829 branches, catering to 2.01 mn customers primarily in rural areas, as on March 31, 2023. Arohan continued to maintain a sharp focus on leveraging technology as one of the key pillars of its growth strategy. Some key highlights are: 1. Arohan launched the industry’s first Digital Lending platform for microfinance customers, “ArohanPrivilege”. Through this service, customers with exceptional credit disciplinewill get the benefit of receiving a loan within minutes of a successful application, through Arohan’s proprietary apnaArohan app from the comfort of their homes. 2. The Company has also launched a fully automated Management Discussion & Analysis Annual Report 2022-23 | 32