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U Gro Capital | An Overview December 2018

U Gro Capital | An Overview

December 2018

The SME Lending Market A large yet untapped market opportunity 2

The SME Lending Market

A large yet untapped market opportunity

The SME Lending Market A large yet untapped market opportunity 2
The SME Lending Market A large yet untapped market opportunity 2

India represents a large, significantly underpenetrated market

represents a large, significantly underpenetrated market One of the largest and fastest growing economies in the

One of the largest and fastest growing economies in the world

GDP PPP US$ Tn, Real GDP Growth

25.1

20.2 10.3 5.5 4.2 4.0 China US India Japan Germany Russia 6.9% 2.3% 6.7% 1.3%
20.2
10.3
5.5
4.2
4.0
China
US
India
Japan
Germany
Russia
6.9%
2.3%
6.7%
1.3%
2.2%
0.19%

However, the credit to GDP ratio is still much lower than other markets

Total credit to non-financial corporations as a % of GDP

160.0%

99.9% 73.6% 54.3% 44.8% 49.1% China US India Japan Germany Russia
99.9%
73.6%
54.3%
44.8%
49.1%
China
US
India
Japan
Germany
Russia
44.8% 49.1% China US India Japan Germany Russia Significant government impetus and for the growth of

Significant government impetus and for the growth of credit

Grant of universal banking, payment banking and small finance banking licenses

Focus on financial inclusion Jan Dhan Yojna,

Pradhan Mantri Awas Yojana

India Stack Cashless, Paperless, Presence-less

Leading to high credit growth in the country led by the NBFC sector

Total credit to the private non-financial

sector, US$ Bn

1,426

1,219 1,236 1,155 1,080 2013 2014 2015 2016 2017
1,219
1,236
1,155
1,080
2013
2014
2015
2016
2017

Credit Growth rate (%)

21.2

18.8 17.9 16.6 15.6 14.6 14.1 13.9 10.9 10.0 9.0 8.2 FY13 FY14 FY15 FY16
18.8
17.9
16.6
15.6
14.6
14.1
13.9
10.9
10.0
9.0
8.2
FY13
FY14
FY15
FY16
FY17
FY18
Bank
NBFC

The overall lending market in India is expected to grow at 10-11% with NBFCs growing at 15-17% over the

next 5 years

The overall lending market in India is expected to grow at 10-11% with NBFCs growing at
The overall lending market in India is expected to grow at 10-11% with NBFCs growing at

The lending market can be broadly divided into three segments…

lending market can be broadly divided into three segments… Corporate, Infra, Real Estate SME Consumer -

Corporate,

Infra,

Real Estate

SME

Consumer

- • Constrained credit growth - • Structural issues - • Higher NPA - •
- •
Constrained credit growth
- • Structural issues
- •
Higher NPA
- •
Low Rating and Leverage
- •
Long term sustainable ROE is challenged
- •
No Equity Value Creation.
+
Healthy credit growth
- •
Current players are limited by credit availability, lower
assessment ability & distribution reach.
+
Pricing Advantage & Structural support available.
+
Favorable demographics
+
Increasing income
+
Increasing debt appetite
- •
Faced with heavy price competition
- • Need strong capital base and long gestation period.

PSU Banks

¾ of total credit

Limited by high NPA

Low CAAR (Basel-III)

Systematic issues

PVT. Banks

Increasing NPA

Limited Geo. reach

Limited assessment ability

NBFC

Diversified geographical presence

Higher assessment ability

Limited by cost of funds and capital investment

▪ Higher assessment ability ▪ Limited by cost of funds and capital investment Current Scenario Future
▪ Higher assessment ability ▪ Limited by cost of funds and capital investment Current Scenario Future

Current Scenario

Future Projection

▪ Higher assessment ability ▪ Limited by cost of funds and capital investment Current Scenario Future

of which the SME segment is the most under-served

of which the SME segment is the most under-served With most SMEs depending on either self

With most SMEs depending on either self financing or informal channels

120% Source of SME financing % of MSMEs that have access to credit 30% 31%
120%
Source of SME financing
% of MSMEs that have access to credit
30%
31%
100%
18%
16%
16%
Family
14%
14%
80%
Savings
60%
Family
India
Mexico
Malaysia
Russia
Argentina
Brazil
Poland
Business
40%
Own Savings
Although MSMEs account for 45% of the Indian
Industrial output – the segment has been starved for
capital from formal sources
The SME financing opportunity is large
Self - Equity
70% of the market
still funded
through the
equity of the
owner/family
20%
Expected to become
a USD 600+ Bn market
Debt - Formal
Sources
0%
Category 1
616
CAGR 17%
NBFCs have been stepping in to fill the need
237
gap in the market
Fragmented market with very few specialised
players
FY16
FY18
SME lending market share
FY17
FY23P
US$ Bn
IndiaBulls
LIC HF
DHFL
Shriram City Union
Private
HDFC
Cholamandalam
Bajaj Finance
Capital First
PSU
banks
PNB HF
Others
banks
NBFC
NBFC
PSU
Category 1
Private
banks
banks
Diversified geographical presence and more
specialized assessment ability provide NBFCs the
Market dominated by large LAP providers and diversified
NBFCs – Absence of players with specialized focus on the
SME segment
competitive advantage

India lags behind other emerging markets when it comes to credit access for MSMEs

5

SME segment competitive advantage India lags behind other emerging markets when it comes to credit access

Specialization is key to success in the SME lending space…

Specialization is key to success in the SME lending space… Difficult to understand businesses/cash flows Challenges
Difficult to understand businesses/cash flows

Difficult to understand businesses/cash flows

Challenges in lending to the SME segment

Fragmented set of customers

Fragmented set of customers

High cost of customer acquisition

High cost of customer acquisition

High dependence on the ecosystem

High dependence on the ecosystem

?
?

Lack of

data

Products

Products

Create broader, more customer centric product offerings

Ability to design products that have EMIs,

tenors, collateral customized to the customer business and cash flows

Ability to build and sell customized third party products like insurance

How specialization helps Distribution
How specialization helps
Distribution

Build proprietary, differentiated and customized distribution channel

Better selection/appraisal of the

distribution channel due to the dedicated

focus

Understanding of customer needs which helps in ecosystem based lending strategies

Credit & Portfolio

Credit & Portfolio

Greater homogeneity leading to better understanding of risk

Deep understanding of the ecosystem and

hence cash flows, funding needs and risks

Ability to leverage data from public sources

Ability to assess macro-environment to build early warning systems

Ability to leverage data from public sources ▪ Ability to assess macro-environment to build early warning

… leading to the emergence of niche, focused SME lenders in India

to the emergence of niche, focused SME lenders in India Focus: K12 Segment AUM: INR 1,000+
to the emergence of niche, focused SME lenders in India Focus: K12 Segment AUM: INR 1,000+

Focus: K12 Segment AUM: INR 1,000+ crores Capital Raised: INR 300+ crores

Sector Focused

1,000+ crores Capital Raised: INR 300+ crores Sector Focused Focus: Travel, Hospitality AUM: NA Capital Raised:

Focus: Travel, Hospitality AUM: NA Capital Raised: INR 100 crores

Travel, Hospitality AUM: NA Capital Raised: INR 100 crores … Specialized NBFCs Product Focussed Geography/Segment
Travel, Hospitality AUM: NA Capital Raised: INR 100 crores … Specialized NBFCs Product Focussed Geography/Segment
… Specialized NBFCs Product Focussed
Specialized
NBFCs
Product Focussed

Geography/Segment Focused

NBFCs Product Focussed Geography/Segment Focused Focus: Tamil Nadu/sub-prime AUM: INR 1,000+ crores Capital

Focus: Tamil Nadu/sub-prime AUM: INR 1,000+ crores Capital Raised: INR 1,000+ crores

AUM: INR 1,000+ crores Capital Raised: INR 1,000+ crores Focus: Rajasthan/sub-prime AUM: NA Capital Raised: INR
AUM: INR 1,000+ crores Capital Raised: INR 1,000+ crores Focus: Rajasthan/sub-prime AUM: NA Capital Raised: INR
AUM: INR 1,000+ crores Capital Raised: INR 1,000+ crores Focus: Rajasthan/sub-prime AUM: NA Capital Raised: INR

Focus: Rajasthan/sub-prime AUM: NA

Capital Raised: INR 100+ crores

Rajasthan/sub-prime AUM: NA Capital Raised: INR 100+ crores Online Community Focus: Loans against machinery AUM: INR

Online Community

AUM: NA Capital Raised: INR 100+ crores Online Community Focus: Loans against machinery AUM: INR 400+

Focus: Loans against machinery AUM: INR 400+ crores

Capital Raised: INR 100+ crores

AUM: INR 400+ crores Capital Raised: INR 100+ crores Focus: POS Lending AUM: ~INR 1,000 crores

Focus: POS Lending AUM: ~INR 1,000 crores Capital Raised: INR 400+ crores

400+ crores Capital Raised: INR 100+ crores Focus: POS Lending AUM: ~INR 1,000 crores Capital Raised:
400+ crores Capital Raised: INR 100+ crores Focus: POS Lending AUM: ~INR 1,000 crores Capital Raised:
400+ crores Capital Raised: INR 100+ crores Focus: POS Lending AUM: ~INR 1,000 crores Capital Raised:
400+ crores Capital Raised: INR 100+ crores Focus: POS Lending AUM: ~INR 1,000 crores Capital Raised:
The U GRO Incarnation The Assimilation of Aspirations 8

The U GRO Incarnation

The Assimilation of Aspirations

The U GRO Incarnation The Assimilation of Aspirations 8
The U GRO Incarnation The Assimilation of Aspirations 8

Reputed founder backed by marquee private equity funds

Reputed founder backed by marquee private equity funds Mr. Shachindra Nath Executive Chairman and Managing Director
Reputed founder backed by marquee private equity funds Mr. Shachindra Nath Executive Chairman and Managing Director

Mr. Shachindra Nath

Executive Chairman and Managing Director

After 26 years of working with large corporates, Mr. Nath decided to embark on his entrepreneurship journey by acquiring control of a listed NBFC - Chokhani Securities Limited

As the Group CEO of Religare from 2010, he had led the entire integrated financial services business of the group - SME

focused lending, Retail Broking, Life Insurance, Health Insurance, Mutual Funds, Capital Markets, Investment Banking and Asset Management

Some of his marquee achievements include successfully leading the IPO process for Religare in 2007, establishing new businesses as well as stitching together successful joint ventures and partnerships together with global financial services firms

Mr. Nath is a qualified lawyer and a University Rank holder from the Banaras Hindu University (India)

Key Investors

▪ Mr. Nath is a qualified lawyer and a University Rank holder from the Banaras Hindu
▪ Mr. Nath is a qualified lawyer and a University Rank holder from the Banaras Hindu
▪ Mr. Nath is a qualified lawyer and a University Rank holder from the Banaras Hindu
▪ Mr. Nath is a qualified lawyer and a University Rank holder from the Banaras Hindu
▪ Mr. Nath is a qualified lawyer and a University Rank holder from the Banaras Hindu
▪ Mr. Nath is a qualified lawyer and a University Rank holder from the Banaras Hindu

Management team with a strong track record of execution…

Management team with a strong track record of execution… Abhijit Ghosh - Chief Executive Officer Kalpesh
Abhijit Ghosh - Chief Executive Officer Kalpesh Ojha - Chief Financial Officer ▪ Over 25
Abhijit Ghosh - Chief Executive Officer
Kalpesh Ojha - Chief Financial Officer
▪ Over 25 years of experience across BFSI, Consumer, Telecom,
healthcare
Over 20 years of experience in treasury, corporate finance, fund
raising
▪ Was the President & CBO of Religare Finvest where he managed
Was the ED and CFO of Aspire Home Finance
an AUM of INR 18,000 crores and 1,500+ employees
Chartered
Accountant
from
ICAI
and
Masters
in
Financial
▪ Alumnus of Kellogg, XLRI, HAYS Group
Management from JBIMS
▪ Previously worked with
Previously worked with
Manish Agarwal - Chief Risk Officer
J Sathiayan - Chief Business Officer
▪ Over 20 years of experience in underwriting, credit policy review,
business risk management and portfolio management
Over 25 years of experience in managing large sales &
distribution setups, portfolio review and collection management
▪ Over INR 1,20,000 crores of portfolio managed
Over INR 8,000 crores of AUM handled
▪ Chartered Accountant from ICAI, ICWA
BE from Sastra University
▪ Previously worked with
Previously worked with
Anuj Pandey - Chief Operating Officer
Rajni Khurana - Chief Human Res. Officer
▪ Over 19 years of experience in product & strategy, P&L management,
business planning, and portfolio management
▪ Over 18 years of experience in human resources management,
performance and talent development, employee engagement
▪ Over INR 12,000 crores of AUM handled
▪ Masters Degree in Human Resource Management
▪ BE from Thapar Institute and PGDM from IIM Lucknow
▪ Previously worked with
▪ Previously worked with
▪ BE from Thapar Institute and PGDM from IIM Lucknow ▪ Previously worked with ▪ Previously

… and guided by an independent board comprising of industry stalwarts

by an independent board comprising of industry stalwarts Name Designation Description S h a c h

Name

Designation

Description

S h a c h i n d r a N a t h Shachindra Nath

 

Executive Chairman & MD

Over 26 years of experience across lending, insurance and asset management

 

Qualified lawyer and a University Rank holder from the Banaras Hindu University (India)

A b h i j i t G h o s h Abhijit Ghosh

Chief Executive Officer & Director

Over 25 years of experience across BFSI, Consumer, Telecom and healthcare

Alumnus of Kellogg, XLRI and HAYS Group

Satyananda MishraIndependent Director, Head of the CSR Committee ▪ Ex – Chairman of MCX and the

Independent Director, Head of the CSR Committee

Ex Chairman of MCX and the Chief Information Commissioner of India

Over 40 years with the Indian Administrative Services (Batch of 1973)

Rajeev K. AgarwalIndependent Director, Head of the Stakeholders Committee ▪ Ex-Whole time member of the SEBI

Independent Director, Head of the Stakeholders Committee

Ex-Whole time member of the SEBI

Over 30 years of with experience with SEBI, FMC and Indian Revenue Service (Batch of 1983)

N K M a i n i NK Maini

Independent Director, Head of the Risk Management Committee

Ex-Deputy Managing Director of SIDBI

Over 38 years with experience in prestigious organizations like SIDBI, UCO Bank and IDBI

Abhijit SenIndependent Director, Head of the Audit ▪ Ex-CFO of Citi, Indian sub-continent

Independent Director, Head of the Audit

Ex-CFO of Citi, Indian sub-continent

Committee

Over 20 years of experience in corporate treasury, financial planning, product control and tax

R a n j a n a A g a r w a l Ranjana Agarwal

Independent Director, Head of the Nomination & Remunerations Committee

Ex-Senior Partner, Deloitte

Over 30 years of experience in audit, tax, risk assurance and due diligence

S. KaruppasamyIndependent Director, Head of the Compliance Committee ▪ Ex-Executive Director of Reserve Bank of India

Independent Director, Head of the Compliance Committee

Ex-Executive Director of Reserve Bank of India

Over 40 years of experience with the RBI across various departments

Chetan GuptaNon-executive Director ▪ Managing Director, Samena Capital

Non-executive Director

Managing Director, Samena Capital

Over 15 years of experience in private equity and equity research

A m i t G u p t a Amit Gupta

Non-executive Director

Founding Partner, NewQuest Capital Partners

Over 20 years of industry experience across investment banking and PE

 

Non-executive Director

Founding Partner, ADV Partners

 

M a n o j S e h r a w a t Manoj Sehrawat

Over 22 years of experience in PE, distress debt acquisition and resolution, and restructurings

of experience in PE, distress debt acquisition and resolution, and restructurings Represents an independent director 11

…supported by a strong, “fully formed” second layer team…

by a strong, “fully formed” second layer team… ED & CEO Abhijit Ghosh CRO COO CFO
ED & CEO Abhijit Ghosh CRO COO CFO CHRO CBO CGO Head Legal/ Compliance Manish
ED & CEO
Abhijit Ghosh
CRO
COO
CFO
CHRO
CBO
CGO
Head Legal/
Compliance
Manish Agarwal
Anuj Pandey
Kalpesh Ojha
Rajni Khurana
J Sathiayan
ETJ
Rajiv Kumar
Company Secretary
Head – Policy
Head - Marketing
Head Treasury
Regional HR (2)
Corporate Channel
Sector Heads (8)
Corporate Legal
Compensation &
Head – Collateral
CTO
Finance Controller
Benefits
Regional Heads (5)
Branch Heads (3)
Head-
Head -Product &
Strategy
Learning &
Business Head –
Investor Relations
Underwriting (2)
Development
BFSI
Fraud control &
Audit
▪ Policy of hiring only 4/5 rated
employees
Head- Analytics
HR operations
Business Head –
Co-lending
▪ A deep and large ESOP pool to
Head Collections &
Litigation
ensure the long term alignment
of incentives
Head - Operations
Head - Cross-sell
Head Collections & Litigation ensure the long term alignment of incentives Head - Operations Head -

The U Gro ethos | High levels of corporate governance

The U Gro ethos | High levels of corporate governance ❶ Choice of a listed vehicle:

Choice of a listed vehicle: High degree of regulatory oversight, transparency and the ability to create an institution for perpetuity

Corporate Governance Code: The U Gro Corporate governance code that captures best practices is enshrined into the Articles of Association

A Strong Board:

Independent directors to comprise more than half of the Board (Currently 6 of 11 members are independent)

Any shareholder holding more than 10% in the company to qualify for a board seat

Key committees like NRC, Audit, Risk Management to be headed by an independent member with required credentials

Auditors: Mandatory requirement for a Big 4 firm to be appointed as the statutory and internal auditors

Deloitte appointed as the statutory auditor and PWC appointed as the internal auditor

Organization Structure:

Strategy driving structure Unlike other NBFC start-ups, all key positions have been filled with senior individuals with more than 20 years of relevant experience

Collections head, collateral specialist, policy head appointed on day one

Clear line of separation between risk/credit and the business teams to ensure independence of the risk/credit function

Processes and policies: Systems and processes in place to ensure checks and balances

Any loan disbursed by the Company exceeding 1% of the net worth or to a related party to require the unanimous approval of the Asset Liability Committee and be subject to the approval of the Board

SOPs for all critical processes, board approved credit authority delegation matrix and deviations from policy to need C-level approval

processes, board approved credit authority delegation matrix and deviations from policy to need C-level approval 13

1994 - 2017

Dec, 2017

Aug, 2018

Our journey so far | Capital raise through multiple modes…

Our journey so far | Capital raise through multiple modes… Formation of Chokhani Securities 1994: Formation
Formation of Chokhani Securities 1994: Formation of Chokhani Securities 1995: Listing of Chokhani Securities
Formation of Chokhani Securities
1994: Formation of Chokhani
Securities
1995: Listing of Chokhani Securities
2004-Present: 14 year track-record of
profitability
First Round of Preferential Allotment Raised INR 435 Cr of capital from global private equity
First Round of Preferential
Allotment
Raised INR 435 Cr of capital from
global private equity firms - ADV
Partners, NewQuest and IndGrowth
Qualified Institutional Placement Raised INR 112 Cr of capital from public market funds, insurance companies
Qualified Institutional Placement
Raised INR 112 Cr of capital from
public market funds, insurance
companies and private equity funds
Acquisition of Chokhani Securities (later renamed as UGro Capital) by Shachindra Nath followed by a
Acquisition of Chokhani Securities
(later renamed as UGro Capital) by
Shachindra Nath followed by a
revamp of the management team
January
Raised INR 192 Cr of capital from
Approval for the demerger of the
large family offices / HNIs through a
lending business of Asia Pragati – INR
175 Cr
preferential allotment of shares
Reinvigoration of Chokhani
Securities
Second Round of Preferential
Allotment
Dec, 2017
May, 2018

Disbursements to begin in

Allotment Dec, 2017 May, 2018 Disbursements to begin in | One of the only companies in

…leading to a highly diverse shareholding structure

…leading to a highly diverse shareholding structure Calculation of Shares Outstanding # Shares Issued & Outstanding

Calculation of Shares Outstanding

# Shares Issued & Outstanding (as on November 30, 2018)

1,98,43,110

Add: Dilutive Instruments

Compulsorily Convertible Instruments

3,11,62,792

Warrants

87,83,785

Total Shares Issued & Outstanding (Fully Diluted Basis)

5,97,89,687

Add: Total number of shares to be issued post demerger

1,35,65,892

Total Shares (Fully Diluted Basis)

7,33,55,579

Shareholding Pattern (Fully Diluted Basis, Post the demerger)

Others IndGrowth 15% 5% Promoters 4% Samena 16% NewQuest 21% PAG 18% ADV Partners 21%
Others
IndGrowth
15%
5%
Promoters
4%
Samena
16%
NewQuest
21%
PAG
18%
ADV Partners
21%

Initial fund raise from large PE funds, public market,

insurance firms, family offices

and HNIs

INR 37 Cr

Initial Capital in the acquired company

and HNIs INR 37 Cr Initial Capital in the acquired company INR 611 Cr Capital raised

INR 611 Cr

Capital raised through shares/CCPS/CCDs

company INR 611 Cr Capital raised through shares/CCPS/CCDs INR 130 Cr Capital raised through issuance of

INR 130 Cr

Capital raised through issuance of warrants

INR 130 Cr Capital raised through issuance of warrants INR 175 Cr Capital to be raised

INR 175 Cr

Capital to be raised through the demerger

issuance of warrants INR 175 Cr Capital to be raised through the demerger INR 953 Cr

INR 953 Cr

Overall Capital Infused

issuance of warrants INR 175 Cr Capital to be raised through the demerger INR 953 Cr
Our Mission 16

Our Mission

Our Mission 16
Our Mission 16

Our Mission

To Solve the Unsolved

India’s US$ 600Bn SME

Credit Availability

Problem

Our Mission To Solve the Unsolved India’s US$ 600Bn SME Credit Availability Problem 17
Our Mission To Solve the Unsolved India’s US$ 600Bn SME Credit Availability Problem 17
Our Mission To Solve the Unsolved India’s US$ 600Bn SME Credit Availability Problem 17

Our Approach

Know More, Grow More
Know More,
Grow More
Our Approach Know More, Grow More Deep sector specialization to understand, reach, and service the customer

Deep sector specialization to understand, reach, and

service the customer better

Fin-touch + Fin-tech
Fin-touch +
Fin-tech
reach, and service the customer better Fin-touch + Fin-tech Leverage the best practices of traditional NBFCs

Leverage the best practices of traditional NBFCs and the

modern fin-tech providers to

create a technology and data centric organization

to create a technology and data centric organization Liability First Create an organization that pro-actively
Liability First Create an organization that pro-actively address the
Liability
First
Create an organization that
pro-actively address the

‘needs’ of rating agencies and

liability providers

First Create an organization that pro-actively address the ‘needs’ of rating agencies and liability providers 18
Know More, Grow More Sector based approach to specialization 19

Know More, Grow More

Sector based approach to specialization

Know More, Grow More Sector based approach to specialization 19
Know More, Grow More Sector based approach to specialization 19

Deep analysis of macro and micro economic factors…

180+ Sectors

analysis of macro and micro economic factors… 180+ Sectors Demand supply gap & Working Impact of
Demand supply gap & Working Impact of Input Environmental Capital change in cyclicality in risk
Demand
supply gap &
Working
Impact of
Input
Environmental
Capital
change in
cyclicality in
risk
issues
Cycle
technology
Sector specific
government
policy
demand
Criteria
Asset
Upgrade &
Revenue
EBITDA
Median
Interest
Turnover
downgrade
Gearing
Growth
Margins
rating
coverage
ratio
ratio

20 Sectors

Criteria
Criteria

Future business prospects

Size of lending opportunity

Relative

competition

lending

Impact of regulatory developments

Top 8 Sectors

lending Impact of regulatory developments Top 8 Sectors An 18 month process involving extensive study of

… to arrive at a set of eight sectors…

Unlike most NBFCs that have a negative sector list, U Gro will have a positive list of sectors that we will lend to

Even within these sectors, U Gro has selected 38 sub- sectors on which to focus

Ratified by

38 sub- sectors on which to focus ▪ Ratified by ▪ These 8 sectors constitute ~50%

These 8 sectors constitute ~50% of the overall lending market

Validated independently by CRIF, CRISIL and the

company distribution team

Large lending

Large lending Lower impact of regulatory changes

Lower impact of regulatory changes

opportunity

Lower impact of regulatory changes opportunity Healthcare Light Education engineering Top 8 Auto
Lower impact of regulatory changes opportunity Healthcare Light Education engineering Top 8 Auto
Healthcare Light Education engineering Top 8 Auto Chemicals components Sectors Electrical Food equipment
Healthcare
Light
Education
engineering
Top 8
Auto
Chemicals
components
Sectors
Electrical
Food
equipment
processing/
and
FMCG
components
Hospitality

Relatively lesser competition from

banks

Hospitality Relatively lesser competition from banks Secular consumption driven growth Low geographical

Secular consumption driven growth

Hospitality Relatively lesser competition from banks Secular consumption driven growth Low geographical concentration 21

Low geographical concentration

Hospitality Relatively lesser competition from banks Secular consumption driven growth Low geographical concentration 21

…and sub-sectors and key clusters to focus on

…and sub -sectors and key clusters to focus on Healthcare Auto components Key Sub-sectors : General
…and sub -sectors and key clusters to focus on Healthcare Auto components Key Sub-sectors : General

Healthcare

…and sub -sectors and key clusters to focus on Healthcare Auto components Key Sub-sectors : General

Auto components

Key Sub-sectors: General nursing

homes, eye clinics, dental clinics, diagnostic labs, radiology/pathology labs, pharma retailers Key clusters: NCR, Mumbai, Bengaluru, Hyderabad and Chennai

Key clusters: NCR, Mumbai, Bengaluru, Hyderabad and Chennai E d u c a t i o

Education

Key Sub-sectors: K-12 Schools, Play

Schools Key clusters: NCR, Mumbai, Coimbatore, Chennai, Hyderabad and Pune

NCR, Mumbai, Coimbatore, Chennai, Hyderabad and Pune C h e m i c a l s

Chemicals

Key Sub-sectors: Dyes and pigments, bulk and polymers, agro-chemicals, other chemicals (except specialty

chemicals)

Key clusters: Mumbai, NCR, Ahmedabad, Vadodara and Surat

Key clusters: Mumbai, NCR, Ahmedabad, Vadodara and Surat H o s p i t a l

Hospitality

Key Sub-sectors: Fine dining (standalone), QSRs, fine dining chains, manpower agencies, boutique hotels, guest houses Key clusters: NA

agencies, boutique hotels, guest houses Key clusters: NA Electrical equipment and components Key Sub-sectors : B2B,

Electrical equipment

and components

Key Sub-sectors: B2B, B2C

Key clusters: NCR, Pune, Bengaluru,

Chennai, Aurangabad and Rajkot

Key Sub-sectors: Engine parts, drive transmission and steering parts, body and chassis, suspension and breaking parts, electrical parts, other

equipment, traders

Key clusters: NCR, Mumbai, Kolkata, Hyderabad and Bengaluru

Key clusters: NCR, Mumbai, Kolkata, Hyderabad and Bengaluru Food processing/FMCG Key Sub-sectors : Dairy and dairy

Food processing/FMCG

Key Sub-sectors: Dairy and dairy products, non-alcoholic beverages,

consumer foods, poultry, sea food,

food and beverage traders Key clusters: NCR, Mumbai, Chennai, Hyderabad and Pune

Key clusters: NCR, Mumbai, Chennai, Hyderabad and Pune Light engineering Key Sub-sectors : Casting and forging,

Light engineering

Key Sub-sectors: Casting and forging,

medical equipment and devices, pipes, process control instruments, traders Key clusters: NCR, Chennai, Pune, Ludhiana, Bengaluru, Ahmedabad and Rajkot

process control instruments, traders Key clusters: NCR, Chennai, Pune, Ludhiana, Bengaluru, Ahmedabad and Rajkot 22
Product Approach 23

Product Approach

Product Approach 23
Product Approach 23

Product Offerings

Moving beyond conventional products…

Product Offerings Moving beyond conventional products… Secured Loans Unsecured Loans Supply chain financing Ticket
Secured Loans Unsecured Loans Supply chain financing Ticket Size: INR 50 lakhs to 5 Cr
Secured Loans
Unsecured Loans
Supply chain financing
Ticket Size: INR 50 lakhs to 5 Cr
Ticket Size: INR 10 to 50 lakhs
Ticket Size: INR 3 to 30 lakhs
Interest rate: 10.5% to 12%
Interest rate: 16% to 19%
Interest rate: 13% to 15%
LTV: Up to 80%
LTV: NA
LTV: NA

To create sub-sector specific products by modulating the following attributes to meet customer requirements…

Collateral Assessment Tenor Loan Pricing Parameters Structuring  
Collateral Assessment Tenor Loan Pricing Parameters Structuring  
Collateral Assessment Tenor Loan Pricing Parameters Structuring  
Collateral Assessment Tenor Loan Pricing Parameters Structuring  
Collateral Assessment Tenor Loan Pricing Parameters Structuring  
Collateral Assessment Tenor Loan Pricing Parameters Structuring  
Collateral Assessment Tenor Loan Pricing Parameters Structuring  

Collateral

Assessment

Tenor

Loan

Pricing

Parameters

Structuring

 
customer requirements… Collateral Assessment Tenor Loan Pricing Parameters Structuring   24

Deep sectoral understanding leading to finely tailored solutions

sectoral understanding leading to finely tailored solutions Scenario : Hospitality/restaurants; franchise set up ▪

Scenario: Hospitality/restaurants; franchise set up

1st disbursal Rs 50 lac security transferred to master franchisee account repayment to start post 6M

2nd disbursal Rs 1 crore to borrower for infrastructure development repayment post 6M

3rd Disbursal Rs 3.5 crores after 3 months of first disbursal as a line of credit, valid for 12M, quarterly bullet repayments

Loan structuring

Ability to offer structured disbursement and repayment solutions

Collateral Movable/ Immovable Property Scenario: Education Industry ▪ Future fee receivables of an educational
Collateral
Movable/ Immovable
Property
Scenario: Education Industry
▪ Future fee receivables of an educational institute to be
taken as primary collateral along with the institution
building as a secondary collateral for a secured loan
Sector based
product
parameters
Pricing
3
Rate of Interest / Processing Fee
Scenario: Type of collateral available in a sector
▪ ROI to vary basis the collateral available
▪ Self occupied residential property to have lower ROI as
compared to a vacant residential property
▪ Education institute building/ Hospital buildings to have
higher ROIs.

Methods of assessment

| Financial |Banking|Turnover |

Scenario: Healthcare

Super distributor supplying to retailers; data on prospective borrower is provided by super distributor

Data includes monthly / yearly procurement and payment pattern which is used to create customized products

Sales and recovery report from the supplier / super distributor are taken as document proofs

Tenor

Repayment Frequency/

Repayment Period

Scenario: Education

Repayment frequency to match the frequency of fee receipt

If the fee is received once in a quarter, the EMI frequency can also be structured accordingly.

of fee receipt If the fee is received once in a quarter, the EMI frequency can

Illustrative Examples

Illustrative Examples Based on our sectoral capabilities, we would deliver customized solutions, faster TAT, better yields

Based on our sectoral capabilities, we would deliver customized solutions, faster TAT, better yields through a combination of higher loan to value and exposure limits, vis-à-vis being a pure play LAP focused lender

Sector

Sub-sector

Products (basis cash flow)

Assessment Parameters

Collateral

Healthcare

Hospitals

Term loan for capacity expansion/upgradation. Medical equipment financing Working capital term loans

Number of patients per day, Doctor’s experience, Bed capacity, Share of IPD revenues

General Practitioners/ Diagnostic labs   Vintage of practice, Quality of Combination of property (business +

General Practitioners/ Diagnostic labs

 

Vintage of practice, Quality of

Combination of property (business + personal), inventory, receivables

Equipment financing, working capital loan

equipment, Degree of practitioner

Medical Devices

Receivables discounting, supplier chain finance, working capital loan

Area covered, Client concentration, Length of relationships with customers

 

Education

 

Term loan for capacity expansion, working capital loan

Promoter's experience, Number of existing branches, Type of locality

Schools - K12 Combination of property, fees receivable

Schools - K12

Combination of property, fees receivable

Vocational Institutes

Primarily working capital loan

Number of branches, premises owned or leased, Increase in salaries

Auto

Auto
 

Receivable discounting, supply chain finance,

Ability to pass on price hikes, Average

Auto components

term loan, working capital

credit period, Discounts offered

Auto dealers

Primarily work capital loan, working capital term loan

Location of the entity, type of dealer (distributor, stockiest)

Auto shop traders

Primarily working capital

Area covered, turnaround time, proportion of slow moving inventory

Combination of property,

inventory, cash flows

Area covered, turnaround time, proportion of slow moving inventory Combination of property, inventory, cash flows 26
Distribution Approach 27

Distribution Approach

Distribution Approach 27
Distribution Approach 27

Channels ChannelsTraditionalNew

Client Acquisition Strategy

Channels ChannelsTraditionalNew Client Acquisition Strategy Channels Direct Sales Agents R o l e ▪ Develop strong

Channels

Direct Sales Agents
Direct Sales Agents

Role

Develop strong relationships with DSAs and DSA aggregators operating in target segments / geographies

Driven by competitive commissions/ sales contests, faster processing, better experience, etc.

Branch Sales Team
Branch Sales Team

Channels

Digital Channels
Digital Channels

Leverage branch sales teams for customer acquisition through outreach/ walk-ins; support with technology

Build targeted sales force with sector / segment experience and community understanding to ensure deep knowledge of

customers

Role

Leverage third party digital origination platforms for lead sourcing, if available in specific segments

Create own digital channels to acquire directly and as a support to own sales force

E.g. Partnerships with loan aggregation platforms

Industry Partnerships
Industry Partnerships

Develop partnerships in prioritized segments with key participants e.g. sector specific lenders, industry bodies

E.g. Anchor led supply chain financing, partnerships with equipment suppliers

Co-lending with NBFCs
Co-lending with NBFCs

Partner with specialized NBFCs in order to co-lend with the partner

E.g. Partnerships with NBFC specializing in K12 lending

specialized NBFCs in order to co-lend with the partner ▪ E.g. Partnerships with NBFC specializing in

Distribution Network

Locations identified through extensive analysis of portfolio and SME cluster performance

Branch Office Head Office Delhi Jaipur Ahmedabad Kolkata Mumbai Hyderabad Bangalore Chennai Phase I -
Branch Office
Head Office
Delhi
Jaipur
Ahmedabad
Kolkata
Mumbai
Hyderabad
Bangalore
Chennai
Phase I - Locations
Mumbai Hyderabad Bangalore Chennai Phase I - Locations Rigorous DSA Selection Criteria ▪ An initial list
Rigorous DSA Selection Criteria

Rigorous DSA Selection Criteria

An initial list of 130+ channel partners arrived at post rigorous vetting of 1,200+ DSAs

Selection criteria

Minimum three year track-record

Infrastructure Readiness

Portfolio performance: Bounce rate, NPAs

DSAs selected have a track-record of acquiring INR 5,000+ Cr on a monthly basis

An onboarding fee charged from each channel partner A first in the industry

Partnerships to boost productivity of sales team

Partnerships to boost productivity of sales team

Analytics led pre qualification basis data available from partner platform

Upfront application of underwriting rules using data-driven indicators

Partner-led customer campaign with pre-populated eligibility amount/ rates

Personal discussion by credit manager to be done before disbursal

with pre-populated eligibility amount/ rates ▪ Personal discussion by credit manager to be done before disbursal
Credit Appraisal and Portfolio Approach 30

Credit Appraisal and Portfolio Approach

Credit Appraisal and Portfolio Approach 30
Credit Appraisal and Portfolio Approach 30

Credit Appraisal Process | A Three Pronged Approach

Credit Appraisal Process | A Three Pronged Approach File Flow For A Secured Loan In principal

File Flow For A Secured Loan

In principal approval in 60 mins Statistical Sub-sector Score-cards Policies ~Sub-sector specific PD templates
In principal
approval in 60
mins
Statistical
Sub-sector
Score-cards
Policies
~Sub-sector specific
PD templates
Loop
Expert
Scorecards
~30 sub-segment
specific
scorecards
Experience Led

~8 segment specific statistical scorecards

Data Enrichment

Data Enrichment 1,000+ Parameters evaluated 20+ Data Sources Feedback

1,000+ Parameters evaluated

20+ Data Sources

Feedback

Data and Analytics Led

Pre-defined Criteria Met?
Pre-defined
Criteria Met?

Sourcing Channel

Sourcing through a mix

of channel partners

and own staff

AI based OCR software

Channel partners with direct LOS integration

software ▪ Channel partners with direct LOS integration Criteria ▪ Defined ticket size, sectors, turn-over ▪

Criteria

Defined ticket size, sectors, turn-over

Geographical location

Borrowing history

Onward processing towards disbursal

Loan Approved

Pre-approval checks

Legal verification

Fraud Control Unit Check

Field Investigation

Valuation

Physical Verification/Visit Led

Quarterly

Monitoring

Investigation ▪ Valuation Physical Verification/Visit Led Quarterly Monitoring Final approval in 48 to 72 hours 31
Investigation ▪ Valuation Physical Verification/Visit Led Quarterly Monitoring Final approval in 48 to 72 hours 31
Investigation ▪ Valuation Physical Verification/Visit Led Quarterly Monitoring Final approval in 48 to 72 hours 31

Final approval in 48 to 72 hours

Investigation ▪ Valuation Physical Verification/Visit Led Quarterly Monitoring Final approval in 48 to 72 hours 31

Credit Scoring Model Currently being used by NBFCs / banks

Scoring Model – Currently being used by NBFCs / banks Business Risk 10% Financial Risk 30%
Business Risk 10% Financial Risk 30% Parameter Weights Transaction History 40% Management Risk 20%
Business Risk
10%
Financial Risk
30%
Parameter
Weights
Transaction
History
40%
Management Risk
20%

Parameters

Factors

Factor weightage

 

Increase In ATNW in last 2 years

2%

EBITDA margin for the last audited year

4%

Current Ratio

10%

Financial Risk

TOL/ATNW

5%

Inventory + Debtor Turnover Period

3%

Total Debt to NCA

3%

Interest Coverage

3%

Management

Promoter property profile / Net worth

12%

Risk

Promoter Bureau

5%

Business Vintage in the same line of business

3%

 

Number of business loans taken

10%

Credit summation as percent of TO

6%

Transaction

Average limit utilization in last 6 months

6%

History

Interest servicing for last 6 months

8%

Overdrawing in OD/CC Account

5%

Inward cheque return due to financial reasons

5%

Business Risk

Supplier concentration

6%

Buyer concentration

4%

Generic template for all companies within the SME space | Focus only on financial parameters

Buyer concentration 4% Generic template for all companies within the SME space | Focus only on

Data based decision making

‘’Destination state” data infrastructureData based decision making ▪ Universal data environment storing data from all source systems, such as

Universal data environment storing data from all source systems, such as LOS, LMS, Accounting, HRMS

360 degree view of financial assessment through credit bureau,

financials, banking data all coming into one platform

Digitization of traditionally unstructured information such as

Personal Credit Appraisals, FI data, collateral valuation data, policy parameters

API integrations making it possible to bring a fast evolving data ecosystem into the fold

A fast evolving data ecosystemto bring a fast evolving data ecosystem into the fold Customer Credit Business Location/ Verification

Customer

Credit

Business

Location/

Verification

worthiness

footprint

Property

Customer Credit Business Location/ Verification worthiness footprint Property
Verification worthiness footprint Property Ability to front-load the entire credit assessment cycle

Ability to front-load the entire credit assessment cycle

Ability to front-load the entire credit assessment cycle Credit evaluation ▪ Borrowing and repayment history

Credit evaluation

Borrowing and repayment history

Sales transaction data from partner platform

history ▪ Sales transaction data from partner platform Verification of authenticity ▪ Negative database

Verification of authenticity

Negative database de-dups

Comprehensive litigation search

Other entity linkage

Comprehensive litigation search ▪ Other entity linkage Business prominence ▪ Presence in listing sites ▪

Business prominence

Presence in listing sites

Promoter and company profile on social media

Collateral valuation

Using places data, base property price index & borrower profile in the neighborhood

Collateral valuation ▪ Using places data, base property price index & borrower profile in the neighborhood
Collateral valuation ▪ Using places data, base property price index & borrower profile in the neighborhood

Proprietary Statistical Scorecards For Assessment At The Application Stage

Scorecards For Assessment At The Application Stage Illustration of scorecard benefit: Default rate across score

Illustration of scorecard benefit: Default rate across score ranges

‘Bad rates’ across intervals

3.45%

1.23% 0.75% 0.56% 0.45% 0.40% 0.26% 0.12% 0.08% 0.00% 718 751 798 823 846 871
1.23%
0.75%
0.56%
0.45%
0.40%
0.26%
0.12%
0.08%
0.00%
718
751
798
823
846
871
907
980
1341
1500

Visible reduction in residual default rates after removing bottom 20%

Healthcare

Chemicals

Auto parts

Education

Hospitality

Electrical equipments

Food processing

Light engineering

0.56% 0.18% 0.90% 0.16% 0.76% 0.28% 0.85% 0.34% 0.60% 0.49% 0.15% 0.44% 0.74% 0.24%
0.56%
0.18%
0.90%
0.16%
0.76%
0.28%
0.85%
0.34%
0.60%
0.49%
0.15%
0.44%
0.74%
0.24%

Segment overall default rate0.85% 0.34% 0.60% 0.49% 0.15% 0.44% 0.74% 0.24% Bad rate post removing bottom 20% 1.23% 1.20%

Bad rate post removing bottom 20%0.15% 0.44% 0.74% 0.24% Segment overall default rate 1.23% 1.20% ▪ Scorecards developed in consultation with

1.23%

1.20%

Scorecards developed in consultation with CRIF basis 80,00,000 loans in the bureau database basis borrowing behavior

Loan base selected on ‘look-alike’ basis to resemble target segments after filtering out known negative segments with high default rates

Analyzed ~ 1.43L loans and more than 850 parameters

Prediction of default using logistic regression method, validated statistically GINI coefficient: 60%+, KS statistic score: 45%+

Score able to eliminate ~70% of ‘bads’ by rejecting 20% of population

60%+, KS statistic score: 45%+ ▪ Score able to eliminate ~70% of ‘bads’ by rejecting 20%

Expert Scorecards

Case A: Less than 20 bedded nursing home

Financial 20% Facility 40% Operational 40%
Financial
20%
Facility
40%
Operational
40%

Case B: 20-50 bedded nursing home

Facility Financial 30% 40% Operational 30%
Facility
Financial
30%
40%
Operational
30%

Parameters

Factors

Case A

Case B

Case C

 

Vintage of the entity

20%

15%

10%

Facility

Doctor’s Experience

20%

15%

10%

related

Arrangement with pharmacy unit

30%

30%

40%

NAHB accreditation

30%

40%

40%

 

Share of IPD revenues in overall nursing home revenue

15%

20%

20%

Share of insurances cases in overall IPD admissions

15%

20%

20%

Operational

Share of government empanelled cases in overall insurance admissions

10%

10%

10%

Occupancy rate

30%

20%

20%

Revenue per occupied bed

30%

30%

30%

 

Operating margins

15%

15%

15%

Return on Capital Employed

20%

20%

20%

Financial

Interest coverage

30%

30%

30%

Asset turnover ratio

20%

20%

20%

Receivable days

15%

15%

15%

Sector: Healthcare Sub Sector: Nursing Homes

15% 15% Sector: Healthcare Sub Sector: Nursing Homes Case C: 50-100 bedded nursing home Facility 20%

Case C: 50-100 bedded nursing home

Facility 20% Operational Financial 20% 60%
Facility
20%
Operational
Financial
20%
60%

Combination of operating parameters specific to the sector and financial parameters

Scorecards developed in consultation

with CRISIL market experts combining

market research with CRISIL’s in-house rating knowledge

Methodology

Scorecards based on 1,000+ personal interviews across 9 locations, collecting responses for over 50+ curated questions for each sub-sector

35

personal interviews across 9 locations , collecting responses for over 50+ curated questions for each sub-sector

Strong Risk Management Framework

Strong Risk Management Framework PORTFOLIO LEVEL RISK Appraisal Policies and deviations are standardized Completely

PORTFOLIO LEVEL RISK

Appraisal

Policies and deviations are standardized

Completely automated CAM to prevent manual errors and ensure quality/shorter TATs

Data pulling from source through APIs mitigating fraud

FCU Checks

An independent team with deep market expertise

Partnerships with multiple FCU agencies and Hunter

Property appraisal

Collateral specialist hired

2 valuation agencies appointed for loan disbursal > INR 1 crore

FI verification

Personal visits by employees

Geo-tagging of customer location

End-to-end automation of FI initiation and completion

Early warning systems

Automated, analytics led, early warning systems basis

proprietary rules framework incorporating social, sector,

macro-economic feeds

framework incorporating social, sector, macro-economic feeds ENTERPRISE LEVEL RISK Asset Liability Management Liquidity

ENTERPRISE LEVEL RISK

Asset Liability Management

Liquidity equivalent to 6 months of liability and 2 months of

advances to be maintained at all times

The one year bucket mis-match will be positive or equivalent to zero

Asset strategy influenced by liability strategy

Fraud Risk

Background/Fraud checks on all outsourcing partners,

agencies and employees before onboarding

Seeding checks conducted regularly

Operational Risk

Standard operating procedures defined for all processes

End to end automation of processes to limit manual intervention

Standard operating procedures defined for all processes End to end automation of processes to limit manual
Fin-touch + Fin-tech Building a Technology enabled organization 37

Fin-touch + Fin-tech

Fin-touch + Fin-tech Building a Technology enabled organization 37

Building a Technology enabled organization

Fin-touch + Fin-tech Building a Technology enabled organization 37

Hybrid Lending Model

Traditional Fin-Touch

Hybrid Lending Model Traditional – Fin-Touch Traditional credit assessment models like CIBIL scores Physical processes

Traditional credit assessment models like CIBIL scores

Physical processes such as visits to customers

Focus on collateral driven lending

Limited to term loans

Focus on collateral driven lending Limited to term loans Fin-Touch + Fin-Tech Adopting a hybrid model

Fin-Touch + Fin-Tech

Adopting a hybrid model

comprising best practices of

traditional lenders and

modern fin-tech companies

of traditional lenders and modern fin-tech companies Alternative – Fin-Tech Alternate credit assessment

Alternative Fin-Tech

and modern fin-tech companies Alternative – Fin-Tech Alternate credit assessment models leveraging analytics +

Alternate credit assessment models

leveraging analytics + publicly available data

Leverage technology to automate processes

thus reducing manual errors

Unsecured credit solutions

Variety in loan products

technology to automate processes thus reducing manual errors Unsecured credit solutions Variety in loan products 38

The U GRO business model is backed by a “best in class” technology design…

is backed by a “best in class” technology design… Process automation Transaction experience Rapid scalability
Process
Process

automation

Transaction
Transaction

experience

Rapid
Rapid

scalability

In place

Planned

Transaction experience Rapid scalability In place Planned System driven workflows at every stage of the customer
Transaction experience Rapid scalability In place Planned System driven workflows at every stage of the customer

System driven workflows at every stage of the customer journey

15 different eligibility assessment

templates

10 product specific onboarding modules

100+ policy rules digitized

40 APIs integrated

30+ credit scorecards configured

Partner integrations

Portfolio monitoring systems

Customized user interfaces for internal and external stakeholders

12 user categories to participate/view

Customized screens for collateral

assessment, FI, FCU

Lead Management System

Dedicated DSA screens

Customer self service

Chatbots

Collection modules

Cloud based architecture and customization-oriented design

All rules put in configurable box easily customizable

End-to-end workflows on system

Integration friendly design

Cloud based architecture

Integrate a large partner ecosystem, facilitating innovation in risk management & business acquisition

▪ Integrate a large partner ecosystem, facilitating innovation in risk management & business acquisition 39

to

complement traditional “touch and feel” across the value chain

traditional “touch and feel” across the value chain Sourcing Verification and Disbursal Collection and Recovery

Sourcing

Verification and Disbursal

Collection and Recovery

Online process to augment traditional fraud

control process

Collection and litigation team already in place

Analytics led predictive collection model to optimize efficiency of field collection

Partnerships with traditional/digital marketplaces to create customized offerings

Intuitive client and partner UI to streamline onboarding

DSA integration into U Gro’s LOS

▪ Collateral management team in place before start of business ▪ Bucket-wise collection strategy Underwriting
▪ Collateral management team in place before start
of business
▪ Bucket-wise collection strategy
Underwriting
Portfolio Monitoring

End to end paperless journey with touch and feel checks

API integrations to pull credit bureau, financials, social, legal and other relevant data

Statistically validated automated credit models

through a bureau partnership

Expert judgement based sub-sector specific score-cards

Automated, analytics led, early warning systems basis proprietary rules framework

incorporating social, sector, macro-economic

feeds

Quarterly visits by team members for account review

Yearly review of financials

60 mins

In-principal Loan Approval

40+

API Integrations

1,000+

Parameters assessed

4040

Yearly review of financials 60 mins In-principal Loan Approval 40+ API Integrations 1,000+ Parameters assessed 40

Highly customized and flexible technology stack to meet business needs

and flexible technology stack to meet business needs Enterprise architecture design Service Oriented S/W Customer

Enterprise architecture design

Service Oriented S/W

Customer portal and mobile apps

DSA and partner apps

Sales hierarchy

Sales assistant

Operations portal

Chatbots

Reporting

Advanced analytics/ Machine learning

Client interfaces

for internal and external front end users

Notification Engine Web sockets
Notification Engine
Web sockets
Identity Access Management Platform booting and runtime configuration Audit and reporting Monitoring, reporting,
Identity Access Management
Platform booting and runtime
configuration
Audit and reporting
Monitoring, reporting, notification
and escalation
Monitoring, reporting, notification and escalation Orchestration layer to secure and optimize data flow

Orchestration

layer

to secure and

optimize data flow

Enterprise Service Bus

Enterprise level software solution to orchestrate and optimize data flow within system

Script execution

Synchronous and asynchronous processing

Database execution

Integration gateway

API Gateway Dedicated API server to secure data flow between

internal/external sources and manage performance

Authentication and authorization

Traffic maintenance and throttling

Loan balancing

Circuit breaker

HRMS

Rule Engine

▪ Loan balancing ▪ Circuit breaker HRMS Rule Engine Core systems a n d sub -

Core systems

and

sub - modules tuned to

product customization

LOS

Dedupe

Credit

Engine

LMS

Operations

G L

Business

Integration

Databases

Workflow

engine

Partner

management

Dedupe Credit Engine LMS Operations G L Business Integration Databases Workflow engine Partner management 41
Dedupe Credit Engine LMS Operations G L Business Integration Databases Workflow engine Partner management 41
Dedupe Credit Engine LMS Operations G L Business Integration Databases Workflow engine Partner management 41
Liability First The Missing Link 42

Liability First

The Missing Link

Liability First The Missing Link 42
Liability First The Missing Link 42

Liability Strategy

Focus on building the “right” book

Partner with ratings agencies from start to create the right quality of asset book

Build a diversified granular book

Start with a primarily secured book and slowly build the unsecured part. Unsecured book to not exceed 20% of the overall book.

Diversify Provider Base

From Year 2, we will start leveraging our strong capital base and high quality, secured book to open credit lines from all forms

of conventional liability sources

Diverse liability mix to include all major banks, debentures, capital market and insurance companies

Over a time period, increase the credit line exposure from existing providers

Specialized source of funding

Access funding from new sources of funding such as multilateral agencies (IFC), impact funds, development banks (SIDBI) etc.

- Engage & understand the specific needs/development agenda of such multilateral agencies. Identify & construct part of

loan portfolio which is attractive to such lenders

part of loan portfolio which is attractive to such lenders Target to reach a D/E of

Target to reach a D/E of 5x and cost of borrowing of 8.5% by FY23

| Build loan book starting from high equity/low leverage to higher leverage over a period of time | Achieve low cost of borrowing basis high credit rating over a period of time |

higher leverage over a period of time | Achieve low cost of borrowing basis high credit