Arohan Financial Services Limited | Annual Report 2022-23

These loans target to meet the working capital needs of micro and small enterprises. In the month of January 2023, Arohan inaugurated its first Mirco-Enterprise Loan Branch, exclusively dealing in Bazaar and Micro- enterprise loan products. Arohan is the first NBFC-MFI to launch an exclusive branch for its business loan vertical and plans to open more such branches going forward. Secondary Loan Products The Secondary Loan Product vertical of Arohan has, over the years, emerged as a strong platform for establishing multiple touchpoints with the customer and her family. In FY 2023, the vertical scaled its business significantly by increasing its partnerships to cater to the needs of its customers for both financial products such as life and non-life insurance, as well as, non-financial products via Cross Sell. Cross Sell plays a key role in increasing customers’ access to a range of financial inclusion products and helps Arohan in improving credit relationships and engagement with its customers. Cross Selling Process: Arohan’s Cross Sell business model allows the Company to increase touchpoints with its customers while also helping its customers improve their standard of living. Arohan believes that this diversifies its operational risk by providing new revenue streams and generating additional sources of income for the Company. Arohan uses the scheduled meeting slots of its Customer Service Representatives with its customers to also talk about and highlight new products. Cross selling at Arohan is facilitated through an in-house technology platform called “ApnaBazaar”, on which various products are made available to the company’s field employees on mobile or tablet devices, for them to, in turn, make it available to the customers. Over the years, Arohan has been able to successfully establish multiple linkages and Valued-Added Product Lines Over the years, the Company has transformed its existing product range by strengthening the existing product dynamics, with the help of digitalisation, focused on customer experience and increasing the tenure of the customer lifecycle with Arohan. Core loan products Saral Suite of Products: Arohan’s flagship product, ‘Saral’, which caters to women who are residing in low- income areas generally involved in trade and services, continues to hold a dominant share in the Company’s portfolio. Arohan predominantly provides loans to groups consisting of three to five women, using the Joint Liability Group (JLG) model. The product is for economically active women residing in low-income areas, generally involved in trade and services. Additionally, if a customer has repaid a minimum of 14 EMIs under her existing loan and she has a good attendance record at centre meetings, the customer becomes eligible for ‘Saral Repeat’, which provides access to larger loan amounts for a longer tenure under a Joint Liability Centre (JLC), which consists of all the women in that customer’s centre, the number ranges typically between 25 to 30 women. This product offers loan sizes from INR 25,000 to INR 75,000. Overall, the Saral loan amounts range from INR 25,000 to INR 75,000 (including Saral New to Credit, Saral Use to Credit and Saral Repeat) and typically have a term of 18 to 30 months. Bazaar: Arohan’s ‘Bazaar’ product is a loan product offered to address the working capital needs of small businesses operating out of authorised marketplaces or clusters of shops organised under local Traders’ Associations. Bazaar loan borrowers are predominantly men involved in small trading and micro-enterprises. Arohan is among the pioneers in the industry to diversify into a product for male customers. The Bazaar loan amounts generally range from INR 25,000 to INR 1,00,000 and have a term of 12 to 24 months. Micro-Enterprise Loans: In FY 2023, Arohan launched Micro-enterprise loans for the higher segment customers with ticket sizes ranging from INR 1,05,000 to INR 1,50,000. 37 | Annual Report 2022-23