Experiences & Learning from Impact Assessment Study Spandana Sphoorty Financial Ltd.
Spandana 
Key Mile Stone 1998
2005
2006
2007
2008
2009
Karnataka – 2 States
Tamil Nadu – 3 States
Orissa, MH, Chhattisgarh – 6 States
Rajasthan and MP – 8 States
Jharkhand & Goa – 10 States
PE Infusion
First Round PE – JM Financial and LOK Capital
Second Round Equity Infusion – Valiant Capital Partners
PAT
2.6 Crores
21 Crores
94 Crores
391 Crores
731 Crores
1868 Crores
Outreach
AP – 1 State
AUM
289 Crores
Registered as a Society
3
Post Conversion to NBFC 2 Yr CAGR in Loan Book: 28%
Nov 2009 Gujarat – 11 States Third Round of Equity – Tamaseak Holding (Under Process)
Post External Equity Funding 2 Yr CAGR in Loan Book: 117%
2562 Crores
SPANDANA – Growth Story “ Opera9on” Operational Highlights November 2009 March 2009 March 2008 March 2007
4
Presence in States
11
8
8
6
No. of Branches
1293
944
435
295
No. of Clients (000)
3,563
2,543
1,240
916
Loan O/s. (Rs Cr.)
2,562
1,868
731
425
Total Staff
9,045
6,373
3,024
1911
Mo@va@on for the Study • All evidence on microfinance impact was anecdotal and from memory • Spandana has been experimental and result based in its approach – Innova@on through pilot projects
• A research of this kind was a natural fit for our philosophy • Hyderabad chosen for having control slums • We wanted valida@on of our assump@ons
Assump@ons Not Supported • Assump@ons that were proved incorrect – – Over 1/3rd of every slum become members of Spandana Only 20% penetra.on is naturally achieved – All loans result in entrepreneurship About 1/5th of loans lead to entrepreneurship First cycle loans used for clearing debt etc.
… and those that were Supported • Assump@ons found to be valid – – Lesser consump@on of tempta@on goods – Higher propensity to purchase durable goods, leading to higher standard of life – Microfinance loans lead to new business forma@on
• Impact on earnings were higher among the higher income bracket
Key Learning • Penetra@on levels not as per Guntur experience – effects of migra@on, conserva@ve lending etc – Focused efforts to increase awareness – Penetra.on being tracked on monthly basis
• If borrower is unlikely to start business – – Higher consump@on – Income smoothing effect – Stringent assessment of repayment ability at the .me of approving loans
Key Learning • Slums are heterogeneous unlike previous experiences – Customer requirements were different – Spandana responded with individual loans, monthly collec.on etc
• Most borrowers do not have house ownership and have tendency to migrate
Some Lingering Ques@ons • Microfinance in thought to have longer term impact on quality of life • Longer term impact not seen in present study – Health – Educa@on • Children in school • Educa@on of girl child
– Women’s empowerment
Our Next Step • Spandana has taken the ini@a@ve to commission a second endline study – To understand the long term impact – Especially on health & educa@on – Expec@ng higher levels of entrepreneurship since the borrowers would be on 3rd – 4th cycle loans
• MIT/ CMF is doing this study • The industry as a whole would benefit from these findings
THANK YOU