Arohan Annual Report 2023-2024

Lending Responsibly ANNUAL REPORT 2023-2024

Lending Responsibly

It is believed that only a true leader takes responsibility of all his stakeholders. At Arohan Financial Services Limited, as part of the Aavishkaar Group, it is our belief that as we navigate the intricate landscape of microfinance in India, it’s imperative to anchor our efforts in principles of responsibility and sustainability to successfully move forward in the journey of industry leadership. Microfinance in India has emerged as a powerful tool for financial inclusion, empowering millions with access to credit and fostering economic growth. However, with great power comes great responsibility, especially in a sector that directly impacts the lives of vulnerable communities. At the heart of Arohan’s responsible lending practices lies the principle of Client Protection. For Arohan, responsible lending entails transparency and fairness not only for its customers, but also for its employees, its partners and lenders, and most importantly the industry and the environment as a whole. As Arohan charts the course for the new future of microfinance in India, join us in our affirmation to our commitment to ethical conduct, social impact, and financial sustainability – a commitment to Lending Responsibly.

Commitment to Value Creation At Arohan, sustainable value creation does not merely transcend to profitability; it encompasses a holistic commitment to stakeholders and the environment. At the heart of this commitment lies its four pillars of customers, employees, shareholders, and the environment. Customers Employees Arohan recognises, anticipates and meets the evolving needs of its customers, in a constant quest to provide innovative solutions and best-in-class service experiences. By cultivating lasting relationships built on trust and integrity, Arohan aims to enhance customer satisfaction and loyalty, driving mutual growth and prosperity. To this effect, in FY 2024, the MFR Certification Committee has assigned the Company the prestigious GOLD Standard in Client Protection Principle under the Cerise+SPTF Methodology. The GOLD level is the highest level of achievement and signifies that the certified institution meets the most rigorous standards of Client Protection found in the Universal Standards for Social and Environmental Performance Management. The Company has successfully met 99.1% of the indicators and has bagged the prestigious Gold Standard in CPP certification in its inaugural attempt. Employees are the key stakeholders of the Company. Arohan’s people practices strives to foster a culture of inclusivity, respect, and professional development, where every individual can thrive and contribute their best. Through investment in training, career advancement opportunities, and a supportive work environment, Arohan empowers its employees to realize their full potential, driving collective success and fulfilment. As a result of its focused people orientation, in FY 2024, Arohan has successfully built a HighTrust, High-Performance Culture - and has been Great Place To Work® Certified™, for the 4th time, with a remarkable score of 92 in the Trust Index© Employee Survey of the Great Place to Work Institute that was conducted in the month of January 2024. Further, the Company has also been recognised among India’s Best WorkplacesTM in BFSI 2024: Top 25, in an assessment undertaken by the Great Place To Work® Institute.

Shareholders Environment Arohan is committed to shareholder value creation and delivering sustainable returns over the long term. By maintaining transparency, accountability, and prudent risk management practices, the Company generates value and continuously improves bottom line, while upholding the highest standards of corporate governance. In a milestone achievement, in FY 2024, Arohan’s credit rating has been upgraded from ‘A- (positive outlook)’ to ‘A (Stable Outlook)’ by rating agencies ICRA and CARE. Credit Ratings are forward-looking opinions on the relative credit risk associated with the rated debt instrument as represented by an appropriate symbol on the relevant rating scale. “A” rating outlook gives additional information to lenders, investors or other users about the expected direction of rating movement and the “Stable” outlook indicates a low likelihood of rating change in the near to medium term. This reinforces Arohan’s stance amongst the elite league of microfinance institutions in the country, and will enable the Company to serve its customers better. As a responsible corporate citizen, Arohan acknowledges the inter-connectedness between business activities and environmental sustainability. The Company is committed to empowering the communities it serves and the geographies its present in, while minimizing its carbon footprints. Through responsible sourcing, energy efficiency measures, and ecofriendly practices, Arohan strives to promote environmental stewardship. To this effect, in FY 2024, the Company earned the prestigious “Social Impact Certificate”, a recognition for its impactful endeavors at the Impact Summit, 2024 organised by d.light in Nairobi, Kenya. This accolade underscores the Company’s commitment to fostering social change by providing affordable and sustainable impact products to rural communities across India with unreliable energy access. This certification validates Arohan’s ongoing efforts to make a positive difference in the lives of those we serve.

Key Performance Indicators SOLVENCY & LIQUIDITY EFFICIENCY RATIO AROHANPRIVILEGE DIGITAL LENDING Networth INR 1,915 Cr Capital Adequacy Ratio 29.01% OPEX 7.44% Number of Customers 30,655 Portfolio INR 143.77 Cr Fee income (as a %age of Total income) 10% Credit Rating A (Stable Outlook) Funds Drawn INR 5,208 Cr Cash & Cash Equivalent INR 938 Cr

IMPACT NUMBERS Branch Employees Borrower’s Demography States 19 Districts 294 Customer Strength 24,10,896 Gross Loan Portfolio INR 7,112 Cr No. of Branches 975 Rural Branch (%) 67% Semi Urban Branch (%) 14% No. of Employees 9,333 Field Employee (%) 93% Rural 73% Semi Urban 17% Women 99% Urban 10% Disbursement INR 6,709 Cr

Awards & Recognitions Asset Triple A, 2023 for the “Best Payment and Collections Solution, India” in association with IDFC First Bank for their digital payments solution for Arohan SKOCH Order of Merit Awards for Innovation in Lending (ArohanPrivilege) SKOCH Order of Merit Awards for Solution in Lending (Nirnay) SKOCH Order of Merit Awards for Solution in Financial Inclusion Programme (ApnaArohan Customer App)

Rating,Grading & Certifications Assigned the prestigious GOLD Standard in Client Protection Principle under the Cerise+SPTF Methodology by the MFR Certification Committee. Corporate Agent (Composite) License by Insurance Regulatory and Development Authority of India. CARE MFI 1 Grading, highest on an 8-point scale. COCA Assessment score of C1 (top grade) indicating “Excellent Performance on COCA Dimensions”. Credit Rating A (Stable). Arohan’s Information Security Management Systems is certified with ISO/IEC 27001:2013 by BSI. Arohan’s Internal Audit practices is certified with I SO 9001:2015. Great Place to Work-Certified™ for the 4th time. Ranked 35th among India’s Top 100 Best Companies to Work for, Best WorkplacesTM in BFSI 2024: Top 25, and the Best in the Microfinance Industry, by the Great Place To Work® Institute.

Index Chairman’s Address 01 Founder & Group Chairperson’s Address 03 Managing Director’s Address 05 Corporate Information 09 Growth through the lens of Sustainability What Drives Us? - Our Mission, Vision and Values 11 Business Verticals 13 Our Product Offerings 15 ESG Focus 17 Geographic Footprints 19 Strong Corporate Governance • Board of Director’s Profile 21 • Management’s Profile 25 • Investor Profile 29 Management Discussion & Analysis • Lending to Millions 31 • Progressing with Purpose 35 • Enhancing Efficiency 45 • Pioneering Lending Solutions 51 • Safekeeping the Trust 55 • Building a Culture of Respect 61 • Board of Director’s Report 73 • Annexures to Director’s Report 82 • Independent Auditor’s Report 111 • Financials 125

Chairman’s Address Dear Shareholders, I am pleased to present to you the Annual Report of Arohan Financial Services Limited, marking yet another remarkable chapter in our journey together. The financial year 2024 has been nothing short of exceptional for the Indian financial landscape against the backdrop of a dynamic global economic canvas. The OECD’s latest Economic Outlook paints a picture of steady global GDP growth, projected at 3.1% for 2024, with a modest uptick to 3.2% anticipated in 2025. Despite significant central bank interest rate adjustments aimed at stabilizing prices, the global economy has shown surprising resilience, a testament to its robustness. In the midst of this global scenario, India shines brightly as a beacon of growth. According to Moody’s, India is poised to lead among the major G20 economies, with a GDP growth rate accelerated to approximately 8% in FY 2024 from 7% in the previous fiscal year. Notably, the third quarter of FY 2024 saw an impressive growth rate of 8.4%, surpassing market expectations, fuelled by robust public investment, resilient private consumption, and a thriving services sector. The Indian government, in tandem with the Reserve Bank of India, continues to create avenues for millions through financial inclusion initiatives. This conducive economic environment, coupled with revised regulatory frameworks, has propelled the microfinance sector forward, witnessing a decent 20% growth in loan portfolios, reaching INR 4.3 tn across 75 mn plus borrowers by the close of FY24. Notably, a study by NCAER underscores the MFI sector’s substantial contribution, constituting 2.7% of India’s GDP as of December 2023. The Government of India introduced the concept of “Amrit Kaal” or “The Era of Elixir”, outlining a transformative vision for a “New India” by 2047. This vision encompasses holistic economic growth, enhanced living standards, infrastructural advancements, technological innovation, and a renewed global stature for India. Microfinance emerges as a pivotal instrument in this journey, particularly in bolstering small industries and fostering employment opportunities. The pursuit of high-income status by 2047 necessitates inclusive growth, benefiting all strata of society. This entails not only economic reforms but also the creation of quality employment opportunities, with a special emphasis on bridging gender gaps in workforce participation. The microfinance sector in India has undergone a Dinesh Kumar Mittal Chairman Board of Directors 1 | Annual Report 2023-24

Chairman’s Address remarkable metamorphosis over the years, emerging as a linchpin for economic empowerment. By extending accessible and affordable financial services to the underserved, including women, microfinance institutions, including ours, have catalyzed economic development, enabling entrepreneurship, fulfilling household needs, and uplifting living standards. At Arohan, our dedication to empowering the underprivileged remains resolute. Upholding our unwavering commitment to corporate governance, we have bolstered our team with seasoned professionals, led by an agile and experienced management team, elevating our operational prowess and ensuring superior customer service delivery. Throughout the year, our leadership has demonstrated exceptional foresight, steering the Company towards robust growth and reinstating pre-COVID normalcy and a Net NPA Zero status. Grounded in our core values, we have nurtured an environment conducive to the prosperity of small businesses and individuals, harnessing the potential of micro-credit and related financial services. I am excited to announce our strategic expansion into the vibrant southern Indian market, marked by the inauguration of a new zonal office in Bengaluru. Additionally, we have ventured into promising territories such as Gujarat, Uttarakhand, and Haryana, further strengthening our presence while deepening our roots in existing geographies. In the fiscal year, our focus on product and geographic diversification has yielded remarkable results. We recorded a portfolio outstanding exceeding INR 7000 Cr, empowering a myriad of aspirations - from fuelling entrepreneurial ventures to facilitating educational pursuits, from realizing dreams of homeownership to ensuring access to essential healthcare services. Our unwavering commitment to operational excellence has propelled us forward, driving significant advancements in digitization with focus on IT-driven operational and lending platform, risk management practices, and strong corporate governance at the Company & Board levels. This transformative initiatives have not only enhanced efficiency but also fortified the security of our services, ensuring a seamless experience for our valued customers. Among our focus areas, highest priority remains to achieve highest standards of customer service and to be a Digitalfirst financial inclusion entity. I am happy to inform you that we have travelled a long distance in both areas and want to be a leader in these areas in India. Our standing on this is evidenced by our Gold Standard CPP certification, the various awards we have won for the IT platform we have created & an industry-first, ArohanPrivilege product for seasoned MFI borrowers to be treated with utmost respect. In closing, I extend heartfelt gratitude to all our stakeholders - customers, employees, and shareholders - for their unwavering support and dedication. It is their collective commitment that propels us forward on our mission to uplift the underprivileged and extend financial empowerment. As we chart our course into the next financial year, I am confident in our ability to achieve our objectives and continue making a positive impact on society. Warm Regards, Dinesh Kumar Mittal Chairman Board of Directors Annual Report 2023-24 | 2

3 | Annual Report 2023-24 Founder & Group Chairperson’s Address Vineet Chandra Rai Founder and Chairman Aavishkaar Group Dear Shareholders, Welcome to the Annual Report FY 2023-24 for Arohan Financial Services Limited, a Non-Banking Finance Company-Micro Finance Institution, an Aavishkaar Group Company. In 2001, we believed that Entrepreneurship has the potential to contribute toward solving complex social problem of the world. Today everything we do centres around the entrepreneur. We build entrepreneurial ecosystem through Intellecap, provide high growth capital through Aavishkaar capital, collateral free loan to MSME through Ashv Finance and Microfinance loans to millions of clients from Arohan Financial Services. Each year when we reminiscence the year gone by, we try to summarize our understanding from the point of view of our Clients, our regulator, our employees and our shareholders. Along with the reflections from these critical stakeholders, we diligently look at four critical metric, our values, our culture, our financials and our impact. As I look forward to the year gone by, our clients have been resilient. They fought through the upheaval of the pandemic and they are now dealing with the impact of El-Nino. The impact of climate change and related disruption has significantly increased the challenges in front of them in managing their cash flows and livelihood. Despite all the above, the clients have remained steadfast in making on time payment for the EMI and continue to be the most resilient stakeholder of the microfinance story. Reserve Bank of India our regulator has provided a light touch and nurturing regulatory ecosystem to microfinance institutions to thrive and deal with the challenges of the COVID pandemic. Our sector Self-Regulatory Organization - Microfinance Industry Network (MFIN) with the recognition and support of the RBI has been the anchor around which the credibility of Microfinance sector has been built and we are grateful to the leadership of MFIN for their contribution in helping the sector build such a credible track record. Arohan represents the ambition of its close to 10,000 strong workforce and it is them who continue to push the company forward. Our Chief Financial Officer - Milind Nare, Chief Business Officer - Sumit Mukherjee, Chief Compliance Officer - Anirudh Thakur, Chief Information Officer - Arvind Murarka

Promoter’s Address Annual Report 2023-24 | 4 and Chief Risk Officer - Ranjan Das are the leadership bull wark that has supported our Managing Director Manoj Nambiar to build Arohan into a world class institution. Our shareholders who have stuck with us through ups and downs and supported us while dealing with large and small disruptions. Their support and encouragement have allowed Arohan to scale new heights and deal with the toughest of times. Last but certainly not the least – millions of our microfinance borrowers who have given us the privilege of serving them with our products and services amongst so many other options available to them As promoter we aspired to build an institution on four pillars of transparency, governance, ethics and impact while delivering commercial returns and our commitment is best represented in the financial results presented in the annual report. Before I end, I wanted to thank our Chairman and Independent Directors who have selflessly contributed in helping us build a credible ethical and transparent institution. Warm Regards, Vineet Chandra Rai Founder and Chairman Aavishkaar Group

5 | Annual Report 2023-24 Managing Director’s Address Manoj Kumar Narayan Nambiar Managing Director Greetings, I am delighted to once again connect with all of you through our Annual Report for a landmark business and financial year gone by – FY 2024. The year 2023/24 has been a great one for us, as we ended the year with the highest ever disbursements and portfolio size, the highest ever profit in our 17-year history, a fully capacitized and diverse senior management team, the Company’s expansion into South India and many more. As of March 2024, we are over INR 7112 Cr in portfolio size across over 2.4 mn borrowers, covering 19 states with 975 branches, being managed through 10 zones/47 regions and an employee base of over 9300. The Indian microfinance sector grew by over 24% to serve over 78 mn BoP segment borrowers with a credit portfolio outstanding of over INR 4.3 Lakh Cr as of March 2024 across 29 states & 7 UTs. With the progressive policies of our regulator, the Reserve Bank of India on credit harmonisation and pricing deregulation, the sector is poised to grow its outreach to the millions of potential borrowers yet to access formal credit in the most populous country on the planet. The key issues facing the sector as identified by the first formal Self-Regulatory Organisation (SRO) in the financial services sector, Microfinance Industry Network (MFIN) are – higher delinquencies, high frontline employee attrition, lower centre attendance, higher operating costs and higher cost of funds, all of which, unfortunately, leads to higher end-borrower pricing. In this above background, I am delighted to inform you that Arohan has moved back to being a unique Net NPA Zero status company with effect from September 2023, and retained that position as of March 2024. We continue to track better than the overall sector and our peer group, on delinquencies with our conservative, prudent credit policies and a robust underwriting process. Like Net NPA Zero, we also plan to launch and institutionalise a new indicator – EGI (Ever Greening Index). Needless to add, Arohan will score a zero on this index as we do not lend to any delinquent borrower ever! 2023/24 has been an eventful year with many significant highlights for Arohan. The Company closed the INR 730 Cr capital equity raise with Nuveen, FMO, IFU & Piramal Alternatives as our new investors, as well as managed an efficient debt raise during the year on both cost & quantity. We received a credit rating upgrade to A (Stable Outlook) from 2 rating agencies and successfully conducted an ARC deal to clear the pandemic and Assam residue. The much awaited start of the Cat 3 relief was initiated in September 2024 with row 1 payment made under the Assam

Managing Director’s Address Annual Report 2023-24 | 6 Microfinance Incentive & Relief Scheme, 2021. Our focus on customer service excellence & client protection principles was recognised with a Gold standard CPP certification by MFR, a top-notch MFI 1 grading & COCA C1 rating from CareEdge Advisory and we becoming a formal Corporate Agency for selling insurance products licensed by IRDA. Arohan’s fully capacitised senior management team has successfully led our expansion programme with our entry into the Southern India markets with a zonal office and branches in Karnataka, setting up of a dedicated Micro Enterprise Loan team to leverage credit opportunities around our branches, an MFI Alliances business growing to over INR 440 Cr in portfolio outstanding and our unique seasoned MFI borrower ArohanPrivilege offering, maturing with close to INR 144 Cr portfolio with over 30,000 borrowers. We also relaunched “Sahbhaagi”, our unique center reward and loyalty programme for customers to enhance attendance. Ours is an employee intensive business as they make all the difference in our interaction with our borrowers. We therefore exercise an unfaltering focus on providing our employees with an environment of growth, positivity and trust. In that context, we recorded the highest ever employee satisfaction score of 92 in the Great Place to Work® Trust Index© Employee Survey, ranking 35th in the Top 100 companies’ list in India, among the Top 25 in the BFSI sector and the coveted Best in the Microfinance Industry in India. We launched an energising employee anthem – “Arohan Mera Garv Mera Sammaan” and also launched “Knowledge Tank Arohan” – a blog series by the senior management group of the Company. We launched a proprietary application, “Swagatam”, facilitating seamless mass recruitment, optimizing time and resources while delivering insights through Our Staff Loan process has been automated and made completely paperless this fiscal with tighter underwriting and credit bureau reporting. Additionally, we also launched our first ever“High Potential”employee programme across the Company. Our unique working Saturday morning field connect programme, “Pragati” continues to ensure growth and learning for our last mile feet-on-street while we also draw sharp focus on capacity building of all employees through Learning & Development, resulting in significant PIP pull backs. In our constant quest to improve and optimize operational efficiencies, we launched “Disha” a digital voice activated assistant in our Business Intelligence dashboard - Vishleshan, along with the launch of a digital Document Access module allowing users to get access to relevant information with ease. We launched “Arohi”, our first AI bot employee deployed in our Debt Receivable vertical effectively following up with our customers. We have also successfully leveraged Lok Adalats for our recovery efforts with good results. We have further enhanced PQR & I-PQR quality & control discipline with proactive credit policies & nonstarter/ early delinquency tracking. We have further detailed out our Enterprise Risk Management (ERM) initiative with our own system “Sandesh”. Our active Vigilance team ensures investigation and action on fraudsters and helps her adhere to our operational processes, policies and guidelines. Most of the above were recognised by the various awards/recognition we won – AMFI WB for best IT platform; 3 prestigious “Award of Merits” at SKOCH’23, Asset Triple A IT/Cash Management Awards; ISO 9001 recertification of our Internal Audit unit; ISO 27001 recertification of the Data Security network, amongst many others. Hon’ble Chief Minister of Assam, Dr. Himanta Biswa Sarma, handing over the Cat 3, Row 1 relief cheque Receiving the recognition of Rank 35 among India’s Top 100 Best Companies to Work For

Our board saw a few changes – Aditya Mohan passing on the baton to Rupa Vora as the FMO director; David Paradiso handing over to Karina Isabel as the MAJ Invest representative and Matangi Gowrishankar, our Human Resources specialist moving on after almost 9 years where she helped reorient our Human Resources Department in a new perspective. We welcomed Arun Diaz, who has a deep financial services Operations & IT experience and Ulhas Deshpande as the new Human Resources specialist on the board. In April 2024, Sumantro Banerjee also finished his 10 years with Arohan and stepped down from the board. Our heartfelt gratitude to all of them for having been with us for years adding value to the management thought process as we grew the business in scale & size. Our endeavour to strengthen the executive committee saw the addition of Sumit Mukherjee as our Chief Business Officer, Sharoni Pal as the new SVP & Head Central Operations and Kanchan Banerjee as our new SVP & Head Human Resources/ Administration/ Training & Development & Corporate Social Responsibility. This makes our team one of the best in the MFI sector in India with over 350 years of cumulative & varied work experience. I am delighted to be back on the governing board of MFIN, our microfinance Self-Regulatory Organisation, as its Vice Chair in July 2023, at a critical time as we take stock on the implementation of the new RBI guidelines on credit harmonisation & pricing deregulation and also transform MFIN into a holistic MFI body across banks and non-banks. A meeting of the Top 20 MFI CEOs resolved to “getting back to the basics” – addressing the key issues of centre attendance, employee attrition, pricing, adherence to a minimum Code of Conduct like not lending to delinquent borrowers, credit & employee bureau submission and usage, basic credit norms on indebtedness & number of lenders, etc. With such an eventful last year, our key priorities for the FY 2025 are even more critical – ensuring a good balance on quality & quantity aspects of our business; significantly growing our presence in the South, scale up the ArohanPrivilege and Micro Enterprise Loan businesses; focus on Diversity & Inclusion across levels; significantly enhancing productivity levels across field and non-field employees; manage the ambitious expansion plan well; enhance retention of both employees & borrowers; enhance our IT platform and launch the critical e-KYC facility; relaunch “Nirnay” our unique updated Credit Scoring model in the microfinance space and close the next equity fund raise between a PE or an IPO option. I wish to thank the government for their focus on Financial Inclusion, our regulator the Reserve Bank of India, for their progressive policies, our Self-Regulatory Organisation, MFIN for the critical sector building work, our promoter group, Aavishkaar for the belief in this business, our investors for their continued support and understanding, our esteemed board for their involvement & valuable contributions, our employees for the hard work and dedication and last but certainly not the least – our millions of borrowers for giving us the opportunity to serve them. I am privileged & honoured to receive your vote of confidence to be the Managing Director of this wonderful business and look forward to the next year with great expectations. Warm Regards, Manoj Kumar Narayan Nambiar Managing Director 7 | Annual Report 2023-24 The Executive Committee of Arohan Financial Services Limited

Managing Director’s Address Annual Report 2023-24 | 8

Corporate Information BOARD OF DIRECTORS MANAGEMENT REPRESENTATIVES • Mr. Sumantra Banerjee, owing to his completion of term as an Independent Director ceased to be a member of the Board with effect from April 29, 2024. • Mr. John Arunkumar Diaz and Mr. Ulhas Sharadkumar Deshpande have been appointed as Additional Directors under the category of Independent Directors w.e.f. January 03, 2024 and January 15, 2024 respectively thereafter appointed as Independent Directors w.e.f. February 13, 2024. • Mr. Vemuru Chandramouli, Ms. Rupa Rajul Vora and Ms. Karina Isabel Alva Alfaro was appointed as a Nominee Director w.e.f. May 12, 2023, August 08, 2023 and November 10, 2023 respectively. • Mr. Stephen Dongwon Lee and Mr. Nitish Chawla has been appointed as a Nominee Director w.e.f. August 07, 2023. Note: Mr. Dinesh Kumar Mittal Chairman of the Board & Independent Director Mr. Rajat Mohan Nag Independent Director Mr. Sumantra Banerjee* Independent Director Mr. John Arunkumar Diaz* Independent Director Mr. Ulhas Sharadkumar Deshpande* Independent Director Mr. Vineet Chandra Rai Promoter Nominee Director Mr. Anurag Agrawal Promoter Nominee Director Mr. Piyush Goenka Nominee Director Mr. Wilhelmus Marthinus Maria Van Der Beek Nominee Director Mr. Stephen Dongwon Lee Nominee Director Mr. Vemuru Chandramouli* Nominee Director Mr. Nitish Chawla* Nominee Director Ms. Karina Isabel Alva Alfaro* Nominee Director Ms. Rupa Rajul Vora* Nominee Director Mr. Manoj Kumar Narayan Nambiar Managing Director Mr. Manoj Kumar Narayan Nambiar Managing Director Mr. Milind Nare Chief Financial Officer Mr. Sumit Mukherjee Chief Business Officer Mr. Anirudh Singh G. Thakur Company Secretary & Chief Compliance Officer Mr. Ranjan Das Chief Risk Officer Mr. Arvind Murarka Chief Information Officer Mr. Shailesh Kumar Head of Credit Mr. Abin Mukhopadhyay Head of Internal Audit Ms. Kanchan Banerjee Head of HR, Admin, CSR & Training Ms. Sharoni Pal Head of Central Operations Ms. Reema Mukherjee Head of Digital Growth Mr. Ketan Agrawal Head of Accounts Mr. Vinod Pandey Deputy Business Head Mr. Joyanta Bakali Deputy Business Head Mr. Abhiroop Chatterjee Deputy Business Head Mr. Pradip Kumar Nath Head of Microfinance Audit Mr. Debarshi Chaudhuri Assistant Vice President - Accounts & Taxation Mr. Manish Kumar Head of Micro Enterprise Loan Business 9 | Annual Report 2023-24

Corporate Information REGISTERED AND CORPORATE OFFICE SECRETARIAL AUDITOR CORPORATE IDENTIFICATION NUMBER REGISTRAR AND TRANSFER AGENT STATUTORY AUDITOR Link Intime India Private Limited C-101, 1st Floor, 247 Park, L.B.S Marg, Vikhroli (West) Mumbai – 400083, Maharashtra, India M/s. MSKA & Associates Chartered Accountants (Registration No-105047W) 602, Floor 6, Raheja Titanium, Western Express Highway, Geetanjali Railway Colony, Ram Nagar, Goregaon (E) Mumbai – 400063, Maharashtra, India U74140WB1991PLC053189 S Basu & Associates Company Secretaries Registration No: S2017WB456500 Alapan Apartment, 3rd Floor, 10/6/2 Raja Rammohan Roy Road, Kolkata -700008, West Bengal, India PTI Building, 4th Floor, Block DP, DP-9, Sector V, Salt Lake, Kolkata – 700091, West Bengal, India Tele: + 91-33-4015-6000 E-mail: compliance@arohan.in Website: www.arohan.in Annual Report 2023-24 | 10

Our Mission, Vision and Values The heartbeat of an organisation resonates from the collective mindset and actions of its people, adapting to the ever-evolving ecosystem. At Arohan, our culture is steeped in the essence of our core values, fueling responsible lending and fostering growth. Guided by these principles, our leaders and managers chart the course towards fulfilling our Mission and Vision with unwavering commitment. What Drives Us?

Growth through the lens of Sustainability MISSION VISION CORE VALUES (ETHICS) To empower the under-served households by offering a range of financial services, in a manner sustainable for all stakeholders. To impact over 28 million lives by 2028. To be among the Top 3 MFI players, serving nearly 6 million households and being a preferred place to work for our employees. Employee Engagement: Arohan treats its employees as a major stakeholder and hence its processes and systems are designed to ensure employee satisfaction, development and high morale. Transparency: Arohan’s products and processes are transparent to its clients such that the information communicated to them is clear, sufficient and timely in a manner and language clients can understand so that clients can make informed decisions. It is also transparent in its communication to, and transactions with all other stakeholders, and employees. Honesty and Integrity: Led by exemplary governance, Arohan maintains high integrity in its delivery, products and processes. Arohan has zero tolerance for unethical practices. It strives to behave with honesty and integrity in all its internal and external communication, and dealings with all stakeholders. Innovation: Arohan strives to maintain a creative culture in the organisation, where employees are encouraged to learn and innovate in their day to day work, while adhering to Arohan’s standards of business and conduct. Also, product, process and business model innovation are integral to Arohan. Customer Centricity: Since customers are considered important stakeholders, Arohan’s products and processes are designed keeping customer needs and realities in mind. Arohan strives to serve customer needs in an effective and efficient manner and behave in a dignified and respectful manner with its customers at all times. Shareholder Value Focus: Arohan recognises its shareholders to be an important stakeholder whose interests it strives to protect, and to whom it seeks to deliver value by focusing on sustainability, profitability and growth of the business. Annual Report 2023-24 | 12

In the face of rapid economic changes, Arohan is cognizant of the opportunities and is seizing them to overhaul its processes and operations, on the cornerstones of sustainable lending model and business diversification. With a clear roadmap outlined by its four business verticals, the Company is advancing towards its Vision for 2028. This vision entails forging innovative business channels and models designed to spearhead its ambitious plan aimed at transforming the lives of 28 million individuals by 2028. Business Verticals

Growth through the lens of Sustainability Organic Business Vertical Arohan’s core business revolves around providing microcredit services to individuals representing the bottom half of the socio-economic pyramid, employing a joint liability group model. We extend a spectrum of financial and ancillary services tailored to their needs, with loan amounts ranging from INR 25,000 to INR 1,00,000, calibrated to foster their socio-economic advancement. Inorganic Business Vertical Arohan has been a forerunner in the industry to have a focused Inorganic business model, optimising its non-qualifying space. From offering Term Loan Services of up to INR 25 Cr to partnering for a Sourcing & Collection relationship with smaller microfinance entities, or through Direct Assignment & Securitizations, and even engaging in microfinance through loans specific to the business enterprise segment operating out of specified markets, this vertical allows the Company sustainable market advantage. Digital Lending Arohan offers an innovative Digital Loan Sourcing channel, ArohanPrivilege, a pioneering initiative in the industry, designed specifically for our goldstandard microfinance customers. This platform empowers individuals to seamlessly apply for and receive loan disbursements from the convenience of their homes, with funds deposited into their accounts within minutes of approval. Beyond enhancing service excellence for deserving customers, this advancement enables Arohan’s Customer Service Representatives to redirect their focus towards sourcing ‘New to Credit’ and ‘New to Arohan’ customers, thereby optimizing their bandwidth. Micro Enterprise Loan MSMEs serve as the cornerstone of the Indian economy, representing a staggering 63 million micro-segment enterprises. Acknowledging the immense market potential within this sector, Arohan has established a dedicated department: the Micro Enterprise Loan Programme. This innovative initiative aims to address the vital working capital needs of these enterprises by providing loans ranging from INR 50,000 to 5 lakhs, tailored to suit each customer’s specific business requirements. Annual Report 2023-24 | 14

Our Prodcuct Offerings Arohan empowers its expanding clientele with a diverse array of financial solutions tailored to meet their evolving needs. From income-generating loans to versatile household product financing options, the Company’s credit solutions cater to various facets of our customers’ lives. Complementing these offerings are our non-credit products, which encompass comprehensive Life and Non-Life insurance covers provided through strategic partnerships with leading Indian insurers. Moreover, we facilitate access to an assortment of lifestyle enhancement products, including but not limited to mobile phones, refrigerators, pressure cookers, televisions, mixer grinders, induction cooktops, energy-efficient bulbs, microwave ovens and air coolers. In alignment with our commitment to fostering financial inclusion, Arohan extends its support to the microfinance ecosystem through term loans to small Micro-Finance Institutions, enabling further outreach to underserved communities. Additionally, the Company empower micro-enterprises with flexible working capital solutions, ranging from INR 50,000 to INR 5,00,000 to fuel their growth and success. At Arohan, we strive to be a catalyst for positive change by providing holistic financial services that empower individuals and enterprises alike. NAME CUSTOMER PROFILE LOAN SIZE LOAN TENURE Saral Catering to women residing in low income areas, generally involved in trade & services. INR 25,000 – 1,00,000 24 - 30 months Micro Enterprise Loans Loans to address the working capital needs of small businesses operating out of authorised market places or clusters of shops organised under a trader’s association. Includes predominantly male customers. INR 50,000 - 5,00,000 18 - 30 months NAME MAXIMUM AMOUNT OF LOAN / CREDIT LIMIT / INSURANCE COVERAGE LOAN TENURE Cross Sell Products Upto value of active Primary Loan Disbursement amount associated with customer, in any given cycle 03-24 months NAME CUSTOMER PROFILE LOAN SIZE LOAN TENURE ArohanPrivilege Digital Lending Gold standard Microfinance customers INR 5,000 - 75,000 05-30 months CORE PRODUCTS SECONDARY PRODUCTS DIFFERENTIATOR SERVICE 15 | Annual Report 2023-24

Growth through the lens of Sustainability PRODUCT CATEGORY NAME OF LOAN/PRODUCT MAXIMUM AMOUNT OF LOAN / CREDIT LIMIT / INSURANCE COVERAGE TERM (MONTHS/WEEK) Insurance (offered through tie-ups with certain Indian insurance companies) Term Life Insurance Coverage is equal to loan amount disbursed to customer. Loan Term + 2 Months Hospicash INR 1,000/ INR 1,500 per day for normal hospitalisation up to 30 days and INR 2,000/ INR 3,000 per day for ICU hospitalisation up to 20 days in a year. Riders include Personal Accident benefit of INR 200,000 including permanent and partial disability. Convalescence benefit of INR 2,000/ INR 3,000 12/24 months Shopkeeper Insurance Sum Insured: (Stock – INR 1,25,000/ INR 1,50,000; Content – INR 1,25,000; Burglary – INR 2,50,000/ INR 2,75,000) 24 months Dwelling Insurance Upto INR 25,000 depending on extent of damage caused to the house 24 months Suraksha Kavach (Mediclaim) Sum Insured – INR 50,000, Daily benefit INR 500 daily benefit per day hospitalization with maximum limit up to 10 days in a year for Borrower & Co-Borrower (floater), Personal accident benefit INR 1 lakh 24 months Personal Accident Insurance Sum insured INR 1,00,000/ INR 2,00,000 24 months Loans to Small MFIs Term Loans INR 25 Cr 12-36 months OTHER PRODUCTS Annual Report 2023-24 | 16

ESG Focus INPUT OUTPUT BUSINESS FLOW Strong Financials Arohan is well capitalised to fuel the Company’s growth and expansion plans, towards is Vision of impacting 28 million lives by 2028. This ensures the promise of huge opportunities of employment for the rural youth, as well as enhanced access to credit for the financially under-penetrated segment of the society. Equity: INR 1,915 Cr Debt: INR 6,016 Cr Revolutionizing Processes: By investing in cutting-edge technology, Arohan redefines efficiency and elevates customer experiences. Our relentless pursuit of technological advancement positions us as pioneers in the industry, recognised across prestigious industry platforms. Thriving on a wealth of human capital and industry expertise With a stellar Board and formidable management, we maintain resilient operational processes, foster livelihoods at the grassroots, and continuously innovate. Committed to inclusivity, we strive for a workplace where diversity flourishes, aiming for a natural gender ratio of 50:50 by 2030. Total Headcount: 9,333 Upskilling Platforms: Hi Potential Programme, Leadership Development Programme, Pragati, Learning Management System, Saksham a. Revenue: INR 1,635 Cr b. PAT: INR 314 Cr c. AUM: INR 7,112 Cr a. Branch: 975 b. Customers: 24+ Lakh c. ISO/IEC 27001: 2013 certification by BSI for Arohan’s Information Security and Management Systems d. Digitalised, in-house processes: Audit Management System, Fraud Management System, Industry first Digital lending, Spotways Route tracker for the Debt Receivable Department, Field employee incentive calculator, realtime field monitoring platfiorm called Sanjaya a. Great Place to Work Certified, among the Top 25 in BFSI, India and the Best in Microfinance Industry b. Percentage of field employees: 93% c. Percentage of women in leadership: 21% d. On-premise, digitalised field recruitment system: SWAGATAM First-in-the-industry ArohanPrivilege Digital Lending platform, Aadhaar enabled eKYC Nirnay, proprietary credit scoring model, completely paperless sourcing of loans through e-Signature, completely paperless Document Management System, Stateof-the-art Customer App, Apna Arohan for enhanced customer delight and experience. Training and Financial Literacy of Customers. 17 | Annual Report 2023-24

Growth through the lens of Sustainability Driving service excellence with a relentless focus on customers experience Through strategic investments in cultivating credit and credit plus relationships, alongside strict adherence to regulatory standards, we have fostered a culture of unwavering customer-centricity. Our diverse range of products and services reflects our commitment to delivering excellence, ensuring that superior customer experience remains at the heart of everything we do. Total Number of Households impacted: 24+ Lakh Customer Retention Rate: 79.77% Languages available in Customer App: 6 (English, Hindi, Odia, Bengali, Assamese, Kannada) Prioritizing ESG-driven value creation Arohan channels its efforts into fostering a holistic impact on society and the environment through its blend of social responsibility and credit initiatives. By nurturing a triple bottom-line effect, our endeavors resonate across people, planet, and profit, ensuring sustainable growth and meaningful contributions to our customers and communities. a. Percentage of customers who have availed first-time loans in their life cycle: 24.64% b. Percentage of women customers: 99% c. Grading & Rating: GOLD Standard in Client Protection Principle by the MFR Certification Committee, COCA Assessment score of C1, M FI Grading of MFI1 by CARE Edge a. Total lives impacted through CorporateSocial Responsibility initiatives: 8,00,000 b. Number of Clean Energy Product Distribution (IncludingRetail Distribution): 2,34,753 units Cashless Collections (various modes of digital payments for customers including AEPS, Credit. Debit Cards, digital wallets, UPI, BBPS, and cash drop points) Re-engagement with customers and the communities we serve through credit plus service and social initiatives. Cashless Loan Disbursals, through a stateof-the-art Loan Management System Annual Report 2023-24 | 18

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Guided by its strategic blueprint to broaden and deepen its reach in economically marginalized regions, Arohan has consistently reached even the most remote corners of the nation, showcasing award-winning processes and services. In FY 2024, Arohan celebrated a significant milestone with the establishment of its Zonal office in Bengaluru, Karnataka, marking its entry into southern India. Additionally, the Company commenced operations in Gujarat, Uttarakhand, and Haryana during this fiscal year. As of March 31, 2024, Arohan’s presence spans across 19 states, including Assam, Bihar, Chhattisgarh, Gujarat, Haryana, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Odisha, Rajasthan, Tamil Nadu, Telangana, Tripura, Uttar Pradesh, Uttarakhand, and West Bengal. In FY 2024, the Company expanded its branch network to 975 from 829 in FY 2023. As Arohan embarks on its ambitious journey to impact 28 mn lives by 2028, it remains dedicated to fortifying its operations and penetration in existing geographies. Through its unique propositions, Arohan is committed to delivering an enhanced customer experience throughout their lifecycle. Growth through the lens of Sustainability Setting sail in new geographies Expanding to newer territories, offering unique propositions Annual Report 2023-24 | 20

Board of Director’s Profile Dinesh Kumar Mittal Vineet Chandra Rai Rajat Mohan Nag Anurag Agrawal Sumantra Banerjee Wilhelmus Marthinus Maria Van Der Beek 21 | Annual Report 2023-24 Dinesh Kumar Mittal is an Independent Non-Executive Chairman of Arohan’s Board. He has been a Director since May 15, 2018. He holds a Master’s degree in Physics from the University of Allahabad. He joined the Indian Administrative Services in July 1977 and has previously served with the Government of India as Secretary – Ministry of Finance, Secretary – Department of Financial Services and the Ministry of Corporate Affairs and as an Additional Secretary and Joint Secretary – Department of Commerce. He has also served as the Chief Executive Officer of IL&FS and with the Government of the state of Uttar Pradesh in various capacities including as Secretary to the Chief Minister. He has also served in the capacity of Managing Director of Uttar Pradesh Land Development Corporation, Vice Chairman of the Ghaziabad Development Authority and Special Secretary and Additional Director – Industries. He is an Independent Director on the Boards of Max Financial Services, Max Estates Limited, Niva Bupa Health Insurance. Rajat Mohan Nag is a Non-Executive Independent Director of the Company. He has been a Director since January 31, 2015. He holds a Bachelor’s degree in Electrical Engineering from the Indian Institute of Technology, Delhi, a Master’s degree in Science, a Master’s degree in Business Administration and an Honorary Doctorate from the University of Saskatchewan, Canada. He also holds a Master’s degree in Science (Economics) from the London School of Economics and Political Science, University of London, United Kingdom. He is also a Distinguished Fellow at the Emerging Markets Forum, and has been recognised as a Distinguished Professor at the Emerging Markets Institute at Beijing Normal University, as well as a member of several non-profit organisations, including Action for Autism. Previously, he has served as the Managing Director General of the Asian Development Bank from 2006 to 2013. Sumantra Banerjee is a Non-Executive Independent Director of the Company. He has been a Director since April 29, 2014. He holds a Bachelor’s degree in Chemical Engineering from the Indian Institute of Technology, Kharagpur, a Master’s degree in Polymer Science and a Master’s degree in Business Administration from the University of Connecticut, USA. Previously, he has served as the Managing Director of CESC Limited, the Sector Head of Spencer’s Retail Limited and a member of the RPG Group Supervisory Board. Vineet Chandra Rai is a Non-Executive Promoter Nominee Director of the Company. He is a nominee of Aavishkaar Venture Management Services Pvt. Ltd. (“AVMS”) and has been on the Board since October 24, 2013. He holds a Post Graduate Diploma in Forestry Management from the Indian Institute of Forest Management, Bhopal and is an Honorary Member of XLRI Alumni Association. He is the promoter of AVMS, which is a part of the Aavishkaar Group. He was awarded the Outstanding Social Change Agent by TiE Mumbai in January 2020 and also featured on the cover of Forbes India (January 2018 issue). He participated in the ‘Champions of Change’ event in August 2017 organized by the National Institution for Transforming India. Further, he was also appointed by SEBI as a member of the ‘Working Group on Social Stock Exchanges’ in India. He has also served as a commission member at the Global Commission on Business and Sustainable Development and is in the Executive Committee of Indian Venture Capital Association. Anurag Agrawal is a Non-Executive Promoter Nominee Director of the Company. He has been a Director since October 3, 2012. He holds a Bachelor’s degree in Business Administration and a Master’s degree in Commerce from the University of Madras, Chennai, and a Post Graduate Diploma in Management from T.A. Pai Management Institute, Manipal. He is currently a Partner at Aavishkaar Capital which is the Impact investing arm of Aavishkaar Group. He has been part of the founding team of Group Company, Intellecap and last served as its CEO. Prior to that, he has worked with ICICI Bank Limited.

Strong Corporate Governance Manoj Kumar Narayan Nambiar Piyush Goenka Vemuru Chandramouli Nitish Chawla Stephen Dongwon Lee Annual Report 2023-24 | 22 Wilhelmus Marthinus Maria Van Der Beek is a NonExecutive Nominee Director of the Company. He was nominated to Arohan’s Board of Directors by AG II. He has been a Director since December 5, 2016. He holds a Doctoral Degree in Economics and Business Economics from Erasmus University, Rotterdam and has completed the European Leadership Course 6 from Comenius Leergangen. He is the Founder of Goodwell Investments BV, and also manages the Aavishkaar Goodwell India Microfinance Development Company I Ltd. and AG II. Manoj Kumar Narayan Nambiar is the Managing Director of Arohan. He has been a Director since October 2012, when he was appointed as the Managing Director of Arohan with effect from October 3, 2012. He holds a Bachelor’s degree in Mechanical Engineering from VJTI and a Master’s degree in Management Studies from JBIMS, University of Bombay, and has tertiary qualifications in Insurance from the Insurance Institute of India. He has also completed the ‘Strategic Leadership in Microfinance’ course from Harvard Business School, USA, “Strategy meets Leadership” course from INSEAD, Fontainebleau, France, “Leading for Impact” from IMD Lausanne, Switzerland, and “Enabling Strategic Impact in the Boardroom” at London Business School, London in February 2024. He has worked with various companies in the fields of business development, consumer banking & finance and microfinance across India and the Middle East. His previous employers include Modi Xerox India Limited, Countrywide Consumer Financial Services Limited, ANZ Grindlays Bank, ABN Amro Bank N.V., National Bank of Oman, Alhamrani Company for Investment in Trade & Ahli Bank. He is the Vice Chairperson of the Group Executive Council at Aavishkaar, the holding company. He has served on the governing board of MFIN, the microfinance sector SRO recognised by the RBI for 7 years from 2013 including as its President from July 2015 to June 2016 and then as Chairman twice from July 2019 to June 2021. He is currently the Vice Chairperson of the Governing Board of MFIN, on the Board of Trustees AMFI WB and is also the Lead of the Steering Committee of the 37 MFI lenders in Assam liaising with the state government on the AMFIRS’21, the microfinance incentive & relief scheme 2021. Stephen Dongwon Lee is a Non-Executive Nominee Director of Arohan. He was nominated to our Board of Directors by Teachers Insurance and Annuity Association of America. Stephen is a Senior Director and Head of Asia on the Private Equity Impact Investing team at Nuveen. Prior to joining the firm in 2014, Stephen worked as Director of Access to Finance for Building Markets, a social enterprise based in New York that supports local businesses in post-conflict and developing countries. He has also held various positions at J.P. Morgan, Accenture and ATX Communications. Stephen graduated with a B.A. in Economics from the University of Pennsylvania, an M.B.A. from Georgetown University’s McDonough School of Business and an M.S. in Foreign Service with a concentration in International Development from Georgetown University’s Edmund A. Walsh School of Foreign Service. He is also a former Fulbright Scholar in Egypt. Piyush Goenka is a Non-Executive Nominee Director of the Company. He was nominated to Arohan’s Board of Directors by Tano. He has been a Director since March 31, 2015. He holds a Bachelor’s degree in Commerce from University of Calcutta and has completed the Post Graduate Programme in Management (equivalent to a Master’s degree in Business Administration) from Management Development Institute, Gurugram. He is a CFA Charter holder. He is the Founder and Managing Partner of Prath Ventures, an early-stage Venture Capital Fund. Earlier, he was a partner at Tano Capital for over 15 years, where he led investments in consumer, pharma, and financial services sectors. He has served on the boards of several portfolio companies. Prior to joining Tano, he worked with Infrastructure Leasing & Financial Services Limited, Export-Import Bank of India and First Global. Vemuru Chandramouli is a Non-Executive Nominee Director of the Company. He was nominated to Arohan’s Board of Directors by SIDBI. He has been a Director since May 12, 2023. He is a graduate in Electrical Engineering. He is currently working as a General Manager of SIDBI and has an overall experience of 30 years. He has also served as COO at TREDS/RXIL. Nitish Chawla is a Non-Executive Nominee Director of the Company. Nitish is an Investment Director at IFU, the Danish Development Finance Institution. Prior to joining IFU in 2020, Nitish has worked as an investment manager at a single family office where he managed the family’s investments in various businesses across logistics, renewable energy and water solutions, hospitality and real estate sectors. He started his career as a buy side equity research analyst, tracking the financial services and pharmaceutical sectors in India. Nitish is a graduate in Computer Science and an MBA from Indian Institute of Management Indore. He has also cleared all three levels of the CFA examination.

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