Ujjivan Financial Services
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Ujjivan disbursed Rs. 4,328 crore during the financial year 2014-15. The company clocked its net profit at Rs 55.03 crore for FY 2013-14. Since its inception, it has 423 branches in 24 states across India with a staff of over 6,500 employees.
Ujjivan is one of the founding members of Microfinance Institutions Network (MFIN) and Association of Karnataka Microfinance Institutions – organizations for propagating best practices in microfinance industry. It is an early adopter of codes of conduct prescribed by RBI and MFI industry. Ujjivan has worked closely with RBI to develop ‘Diksha’, a financial literacy program.
Ujjivan was founded by banker Samit Ghosh (now Chief Executive Officer and Managing Director). He started with a corpus of Rs. 27 million, of which Rs. 7 million came from Bellwether Microfinance Fund, a private equity investor and the remaining came from his savings and that of his friends and colleagues.
Ujjivan was chosen in 2009 to participate in a Social Performance Management Implementation Project (SPM IP) launched by Unitus, an international nonprofit organization. Social performance management (SPM) is an institutionalized process that involves setting clear social objectives such as improved quality of housing, healthcare, and monitoring and assessing progress toward achieving these goals. This information can then be used to improve the performance and impact of MFIs.
Micro Finance Industry Crisis
The 2010 Microfinance Crisis in India led to the closing down of many small micro-lending companies while the big ones came under the radar when deeply indebted borrowers started to commit suicide. Ujjivan however was not affected by the crisis since they did not operate in Andhra Pradesh, the center of the crisis.
Even during the crisis period Ujjivan was able to raise capital twice through private placements of Rs. 127.9 crores in January and Rs. 47.2 cores in September 2012. The capital raise was not only subscribed by existing investors but also inducted new investors such as International Finance Corporation, FMO and Wolfensohn Fund Management. Ujjivan went on to win the best Large Microfinance Institution award in the year of crisis, closing the year FY11-12 with modest profits.
Growth and diversification
Beginning its operations as an urban focused MFI, Ujjivan substantially expanded in the semi-urban and rural space. Currently Ujjivan has a network of 423 branches spread across 24 states and union territories, 35% of its branches are located in under-banked districts. Ujjivan is growing its group lending business steadily. Ujjivan has applied for the Small Finance Bank License and closed its 6th round of equity infusion with Rs.3000 million each of primary infusion and secondary sales.
In 2013-14, with Rs 1,617 crore, Ujjivan registered a 44% growth over the previous financial year. It achieved a pre-tax profit of Rs 83.81 crore, among the highest in the industry. Ujjivan had taken its services to 22 states across India through 350 branches that serve over 1.3 million active customers. It had disbursed loans amounting to over Rs 6,800 crore with a repayment rate of above 99%. It had achieved a customer retention rate of 85%.
In January 2016, Ujjivan has filed for IPO (Initial Public Offering). According to the draft red herring prospectus filed by Ujjivan, the company is looking to raise Rs.650 crores(just under $100 million) through the sale of new shares.
Ujjivan developed several changes in customer management. Ujjivan formed groups of five people who knew each other and then centers were formed by merging four or five of these groups. Instead of following the self-help group model, they follow the Grameen model. For 2015, their main focus is mainly micro-entrepreneurs, marginal farmers and workers in the factory and office and domestic workers across the country.
In August 2014, Ujjivan approached IBM for a fully managed cloud service to support its rapid growth and ensure high availability and always-on operations. They selected IBM’s private cloud resilience services to ensure continuous business operations for its clients’ critical financial transactions. This will ensure uninterrupted customer engagement, protection and access to the company’s data during service interruptions and unforeseen incidents.
In April 2015, Ujjivan rolled out hand-held field technology devices as it seeks to take the loan approval process online and expedite disbursals. It has collaborated with fin-tech firm Artoo to enable field staff with internet-enabled handheld tablets which run a lending solution.
The project is aimed at providing quick and appropriate loans to its customers, reduce the turnaround time as well as improve efficiency and productivity in disbursing loans. The project has been launched in 282 branches across 16 states and is expected to handle Rs 3,000 crore of disbursements over three years once it is rolled out in all operating branches of Ujjivan.
Ujjivan allocates a portion of its profits in running the Social Development Program. Last year (2012) under this initiative, it covered more that 200 branches investing over Rs.47 lakhs and helping over 70,000 beneficiaries across India. In Mawlai, Ujjivan serves over 3000 families and has disbursed loans of over Rs.5 crore.
Four NBFC-MFIs (non-banking finance company-microfinance institutions) have been given ‘mfR1’ grading by CRISIL, which is the highest under its eight-point scale specially designed for evaluating operations of MFIs in 2013. Ujjivan was one of those MFIs.
Rating agency ICRA has upgraded the ratings of three MFIs, Ujjivan being one of them in 2013. The upgrade of these microfinance-focused non-banking financial companies (NBFCs) reflects likely improvement in their earnings and superior ability to control asset quality, ICRA said.
Ujjivan received the MFI Transparency Award, Social Performance Reporting Award and First ever Unitus Accelerator Award (awarded to an MFI that best exemplifies the goal of accelerating microfinance through innovation, growth, and commitment to client needs), amongst others in 2010.
In 2011, Ujjivan won the “Microfinance Organization of the Year Award” for large MFIs. This award was a part of the Microfinance India Awards which were presented by ACCESS Development Services in association with HSBC at the 8th Annual Microfinance India Summit.
The internationally recognised Great Place to Work Institute which studies and compiles a list of the best workplaces listed Ujjivan Financial Services 14th in the best Indian companies to work in 2011.
In 2012, Ujjivan received the following awards:
- 16th place in the category ‘Top 50 firms above thousand employees’ 
- 2nd place in the Financial Services category for Best Companies to work for 
- One of the Best Companies in Leadership Development.
Ujjivan was recognized by The Smart Campaign, a global initiative to incorporate strong client-protection practices into the microfinance industry, as one of the five Indian Microfinance institutions that were Client Protection Certified for meeting strong standards of client care in 2013. It again got the 2nd place in the Financial Services category for Best Companies to work for.
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- "Ujjivan Financial plans capital infusion by year-end." The Hindu Business Line.
- MFI Ujjivan to raise Rs 100-cr via private placement - Indian Express
- Ujjivan Financial Services raises Rs 29 crore via non convertible debentures - Economic Times
- Ujjivan Financial Services raises $25 mln in PE fund | Reuters