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
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