Executive Summary

A
DISSERTATION PROJECT REPORT

ON
“A STUDY ON FINANCIAL PERFORMANCE OF MICROFINANCE

COMPANY-BHARAT FINANCIAL INCLUSION LTD.”
SUBMITTED TO
SAVITRIBAI PHULE PUNE UNIVERSITY
IN PARTIAL FULFILLMENT OF TWO YEARS FULL TIME COURSE OF
MASTERS IN BUSINESS ADMINISTRATION (MBA)
SUBMITTED BY
SACHIN PACHARNE.
(Finance)
UNDER THE GUIDANCE OF
PROF. CHETAN PATIL
PIMPRI CHINCHWAD EDUCATION TRUST’S

PIMPRI CHINCHWAD COLLEGE OF ENGINEERING
NIGDI - PUNE- 411044
BATCH – 2018-2020
COLLEGE CERTIFICATE
DECLARATION
I SACHIN RAMDAS PACHARNE, of MBA SYMBAFIN17, hereby declare that the

project work titled “A STUDY ON FINANCIAL PERFORMANCE OF
MICROFINANCE COMPANY-BHARAT FINANCIAL INCLUSION LTD.” which
has been submitted to SAVITRIBAI PHULE PUNE UNIVERSITY, is an original
work of the undersigned and has not been reproduced from any other sources and has not
been submitted to any university.
Signature of student
SACHIN PACHARNE
Date:
Place: Nigdi, Pune.

ACKNOWLEDGMENT
I wish to express my sincere gratitude to my institute to provide this opportunity to learn

the A study on financial performance of micro finance company-Bharat financial
inclusion Ltd.. I would also like to thanks Pimpri Chinchwad Collage of Engineering,
Pune. For providing me the platform for learning and home sting my skill that enabled
me to put in my best efforts into this work.
I would like to present my sincere gratitude to ward our principal Dr.
Nilkanth B. Chopde for his moral support to our department in any activity & the one to
whom I owe my success is our Head of department Dr. Santosh Shinde & my project
guide Prof. Chetan Patil for walking the steps of failure & success with me anytime. I
again Thanks all of the personals & Individuals that has even small amount of
contribution in my project.
INDEX
Sr. No TOPIC Page No
1 INTRODUCTION
2 OBJECTIVES OF THE STUDY
3 INDUSTRY PROFILE
4 THEORETICAL BACKGROUND
5 RESEARCH METHODOLOGY
6 DATA ANALYSIS & INTERPRETATION
7 FINDINDG OF THE STUDY
8 CONCLUSION
9 REFERENCES & BIBLIOGRAPHY
10 APPENDIX
INTRODUTION
Microfinance means providing very poor families with very small loans (micro credit)
to help them engage in productive activities /small businesses. Over time,
microfinance has come to include a broader range of services (credit, savings,
insurance, etc.) as we have come to realize that the poor and the very poor who lack
access to traditional formal financial institutions require a variety of financial products.
The Eleventh Five Year Plan aims at inclusive growth and faster reduction of poverty.
Micro Finance can contribute immensely to the financial inclusion of the poor without
which it will be difficult for them to come out of the vicious cycle of poverty. There is
a need to strengthen all the available channels of providing credit to the poor such as
SHG- Bank Linkage programmes, Micro Finance Institutions, Cooperative Banks,
State financial corporations, Regional Rural Banks and Primary Agricultural Credit
Societies. The strength of the micro finance industry lies in its informality and
flexibility which should be protected and encouraged.
Landlords, local shopkeepers, traders, suppliers and professional money lenders, and
relatives are the informal sources of micro-credit for the poor, both in rural and urban
areas.
The sector which is still in its infancy faces shortage of experienced

consultants/manpower/experts. There is a need to have good quality professionals,
trained in best practices in governance for effective corporate governance. A need-
based capacity building programme to meet the requirements of all categories of Micro
Finance Organisations (MFOs) is essential to bring about sustainability in the sector.
Some of the important areas where capacity building is needed are transformation, best
practices, interest rate management, delivery management, managing growth, risk
mitigation, product designing, market research etc.
The poor, like the rest of society, need financial products and services to build assets,
stabilize consumption and protect themselves against risks. Microfinance serves as the
last-mile bridge to the low-income population excluded from the traditional financial
services system and seeks to fill this gap and alleviate poverty. Microfinance loans serve
the low-income population in multiple ways by: (1) providing working capital to build
businesses; infusing credit to smooth cash flows and mitigate irregularity in accessing
food, clothing, shelter, or education; and (3) cushioning the economic impact of shocks
such as illness, theft, or natural disasters. Moreover, by providing an alternative to the
loans offered by the local moneylender priced at 60% to 100% annual interest, 2
microfinance prevents the borrower from remaining trapped in a debt trap which
exacerbates poverty.
Microfinance loans in India range in size from $100 to $500 per loan with interest rates
typically between 25% and 35% annually. The microfinance model is designed
specifically to help the low income population overcome typical challenges such as
illiteracy, lack of financial knowledge and deficiency of collateralizable assets. At the
same time, the model takes advantage of existing community support systems and
networks to encourage financial discipline and ensure high repayment rates.
OBJECTIVE OF STUDY
1. To understand the microfinance company in India. and role of microfinance

economic development.
2. To analyses the financial performance of BFI.Ltd.
3. To know the financial position of the Bharat financial inclusion Ltd.
INDUSTRY PROFILE
As of December 31, 2009, there were 1,395 MFIs globally with an estimated borrower
base of 86 million with a total outstanding portfolio of over $44 billion as reported by the
MFIs to the Microfinance Information Exchange or “MIX Market”, excluding MFIs that
do not report to MIX Market.3 If they did report, the total size of the global microfinance
industry is estimated to be roughly 200 million borrowers.4 From 2003 to 2008, the
global industry experienced a growth in borrowers at a CAGR of 12% and a portfolio
outstanding CAGR of 34%.5 Inter-regionally, South Asia, East Asia and the Pacific
region had the highest growth rates in terms borrowers, and Sub-Saharan Africa, Middle
East and North Africa have experienced the slowest growth. Latin America continues to
lead in terms of portfolio outstanding with $16 billion or 36% of the total global
portfolio; however, South Asia has the lead in terms of borrowers with over 50% of the
global borrower base.6 The disparity between these two trends is explained by the
variance of average loan sizes in the two regions, which is a product of their economic
well-being and the business models followed by their respective microfinance sectors.
MICROFINANCE IN INDIA – AN OVERVIEW
The Indian microfinance sector presents a strong growth story. Its growth performance
was impressively sustained through the liquidity crunch and continued at an increased
rate in the second half of 2009. As of March 2009, the MFIs in India reported a client
base of 22.6 million with an outstanding portfolio of more than $2 billion.7 Over the past
five years, the sector has delivered a CAGR of 86% in the number of borrowers and 96%
in portfolio outstanding. In the 12 months from March 2008 to March 2009, the
microfinance industry experienced a 59% growth in its client base from 14.2 million to
22.6 million and 52% growth in its portfolio outstanding which increased from $1.5
billion to $2.3 billion.8 This reflects a 14% increase in the absolute growth in portfolio
outstanding and 33% increase in the absolute growth in the number of borrowers from
2008 to 2009.
Growth in Indian Microfinance Sector

Year Ending March 31st 2004 2005 2006 2007 2008 2009
Outstanding Portfolio ($$80 $252 $496 $824 $1,53 $2,34
million) 5 6
Growth Rate 215.0 96.80 66.10 86.30 52.80
0% % % % %
Borrowers (million) 1 2.3 4.9 7.9 14.2 22.6
Growth Rate 130.0 113.0 61.20 79.80 59.20
0% 0% % % %
Source: Microfinance India State of the Sector Report 2009
These numbers demonstrate the fundamental strength of the industry and the potential it
still has to expand. Nonetheless, as presented by the table, the year- on-year growth rate
has been declining, illustrating the increasing maturity of the sector. Though decreasing,
the growth rate is still high and is reflective of the industry approaching a more
sustainable rate of expansion rather than a reversal of the trend observed thus far. As the
industry matures, it is also nearing an inflexion point and is considering more
sophisticated growth strategies through diversifying product offerings, client targeting
and creative financial and non- financial solutions, which will allow the sector to grow at
a continuous pace while preserving its solid performance and abiding by its social
mission. The equity financing flowing into the industry is reflective of the growth story it
has experienced. Microfinance is gaining increasing ground as a viable investment sector.
Since 2006, in India more than 25 equity transactions totaling more than
$295 million in primary investments in the microfinance space have been completed.
While the liquidity crunch did affect the availability of equity for microfinance players in
the second and third quarters of fiscal year 2008-09, contrary to the trend in the financial
services sector overall, Indian microfinance saw a surge in equity infusions in the first
quarter of fiscal year 2009-10. In fact, the current fiscal year has also witnessed the
entrance of mainstream private equity firms in the microfinance space, which had been
previously occupied singularly by socially oriented investors such as Lok Capital.
While the sector is still dominated by socially-focused investors, pure commercial
investors are beginning to play a significant role by participating in a few, but large
transactions.
Primary Investments in Indian MFIs 2006 – Present

Investment
Date MFI ($ million Investors
)
Jan-10 Bandhan 11.0 Small Industries Development Bank of India
Dec-09 Utkarsh 0.7 Aavishkaar Goodwell, IFC
Nov-09 Sonata 4.4 Bellwether, Michael and Susan Dell
Foundation
Nov-09 Grameen 6.0 Microventures, Incofin, Aavishaar Goodwell
Koota
Oct-09 Spandana 47.1 Temasek
Oct-09 Equitas 0.0 Sequoia
Sep-09 Asmitha 5.5 Blue Orchard
Sep-09 Asirvad 1.5 Lok
May-09 Suryoday 1.0 Aavishkaar Goodwell
Feb-09 Equitas 11.0 Bellwether, Microventures
Jan-09 ASA-GV 4.4 Microvest
Dec-08 BASIX 7.1 Lok, Aavishkaar Goodwell
Dec-08 Asomi 0.6 Incofin
Nov-08 SKS 80.3 SVB Financial Group, Kismet
Nov-08 Ujjivan 20.6 Lok, Sequoia, Existing
Nov-08 Spandana 21.9 Valiant
Sep-08 Asmitha 5.5 Blue Orchard
Jul-08 MMFL 6.0 Unitus
Jun-08 Arohan 1.4 Lok
Apr-08 Sonata 0.4 Bellwether
Dec-07 ASA 2.6 Unitus
Dec-07 SKS 32.3 Sandstone
Aug-07 Spandana 10.7 Lok, JM Financial
Aug-07 Satin 1.1 Lok
Mar-07 SKS 10.6 Unitus, Sequoia
May-06 Ujjivan 0.5 Bellwether, Unitus
Total 295.2
Source: Lok Capital To fulfill the growth projections at play in the microfinance industry,
it will continue to rely increasingly on equity versus debt. This need is compounded by
the Reserve Bank of India’s (“RBI”) capital adequacy requirement for the sector which is
currently 12% and is set to increase to 15% by April 2010. According to internal
estimates, growth targets and capital adequacy requirements together create an annual
equity need of approximately $200 million for the top ten MFIs until fiscal year 2013.
The growth of Indian MFIs has been enhanced by the availability of debt financing from
both private and public sector banks, which have significantly increased their exposure to
microfinance over the last five years. As of March 2009, banks and financing institutions
had a total exposure to MFIs of $2.45 billion. This represents an almost 150% increase
from the exposure in March 2008 of $984.8 million and a 200% increase from the
exposure in March 2007 $805.6 million.9 The priority sector lending (“PSL”)
requirements set by the RBI have encouraged banks to lend to MFIs as a way to satisfy
their financial inclusion quotas for lending to agriculture and weaker and more deprived
sections of society. During the 2008 liquidity crisis, some banks reduced on their
exposure to microfinance, particularly to smaller MFIs. However, the Small Industries
Development Bank of India (“SIDBI”) played an important counter-cyclical role, and the
new public sector banks such as Punjab National Bank and State Bank of India entered as
significant debt providers to Indian MFIs. As liquidity conditions eased by early 2009,
the market witnessed the entrance of non-bank debt entities such as IFMR Trust. The
large private Indian banks such as HDFC Bank and ICICI Bank that have historically lent
to Indian MFIs, have begun to increase their exposure to the microfinance sector. ICICI
Bank increased its exposure from fiscal year 2008 to fiscal year 2009 by 176% to $567
million, and HDFC increased its exposure over the year by 260% to $568 million. Other
private sector banks such as Karnataka Bank, Kotak Mahindra Bank, Dhanalakshmi Bank
and a couple others have also entered the debt financing market. Besides term loans, there
has been a rise in non-traditional products such as non-convertible debentures,
securitizations and portfolio buyouts available to MFIs through domestic as well as
foreign debt funds. As of the end of fiscal year 2008-09, banks and new entrants had
capital worth $100 billion available for lending to MFIs.11 As a result, today, larger
MFIs have adequate and easy access to debt financing. However, smaller and emerging
MFIs are still struggling to find adequate funds as they have unproven business models
and present a higher default risk to banks. Alternative debt providers are emerging in an
attempt to fill this gap with subordinated-debt, guarantees and pooled securitizations.
COMPANY PROFILE
Bharat Financial Inclusion Limited (formerly known as SKS Microfinance Limited)

BFIL is a banking & finance company (NBFC), licensed by the Reserve Bank of India. It
was founded in 1997 by Vikram Akula, who served as its executive chair until November
2011. The company's mission is to provide financial services to the poor under the
premise that providing financial services to poor borrowers helps to alleviate poverty. In
2013, the company operated across 17 Indian states
History
In an early interview at Wharton in 2008, Akula recounted having worked with an NGO
in India as a loan officer on the field in 1997. The potential for impact that these loans
had given him the idea of setting up SKS as a more scaled up version for micro finance.
He formed it as a charity in 1998 in Hyderabad, India as a part of his PhD studies to
explore the then nonexistent micro finance industry in India. Though claimed to be based
on the Grameen bank model, SKS granted high interest (36%) loans of Rs. 10,000 to R. 2
lakh to men and women in Andhra Pradesh belonging to poor families (as compared to
Grameen bank which grants income producing loans at 20% APR). However, unlike
Grameen bank, SKS used an aggressive commission based system to encourage loans,
thus forming a network of loan marketers who were not direct employees of SKS, but
worked on a commission basis in smaller villages of Andhra Pradesh. SKS used a
network of loan sharks to pursue matters with defaulters.
Meanwhile, Akula got married and his wife Malini Byanna, a lawyer by profession was
appointed director of some of the organisations of SKS. By this time, SKS had four major
arms - SKS Foundation, SKS Education, SKS Microfinance and SKS Technologies. The
foundation was subsequently able to receive grants from Indian and foreign institutions,
mainly for their education related charity.
1997 to 2005
BFIL was started as a non-profit NGO named Swaya Krishi Sangam (SKS Society) in
1997 by Vikram Akula.
In 2003, Akula created SKS Mutual Benefit Trusts (MBT) to change SKS Society into a
for-profit entity named as SKS Microfinance.
The trusts raised INR 20 million through donations as it was the minimum capital
required to form an NBFC entity. With its invested capital, the trusts held 99.5% stake in
SKS Microfinance.
SKS Microfinance secured a Non-Banking Financial Company (NBFC) licence in 2005

by the Reserve Bank of India.
In 2004, Sitaram Rao was appointed as the company CEO after Akula. Akula retook the
position in 2005.
2005 to 2010
In 2007, SKS Microfinance raised $11.5 million through equity investments led by Sequoia
Capital.
In 2008, it further raised $74.5 million through equity investments led by Sandstone
Capital
On 28 July 2010, SKS Microfinance debuted on the BSEwith an IPO that was
oversubscribed 14 times. Muhammad Yunus expressed concern that going public would
put the demands of shareholders ahead of the poor. He added further, "If they do it, I
cannot stop them but I would encourage genuine Microcredit programs.
SKS founder Vikram Akula resigned from the board on 23 November 2011. In 2015, P.
H. Ravi Kumar became the non-executive chairman. The company's shares meanwhile
lost 96% of their value from a high of Rs. 1491.50 in 2010.
2012 to 2018
In a 2012 cover story, The Hindu reported that a marked shift took place in the values and
incentives of SKS in 2008, after largescale investment began to flow in from venture
capitalists and prospectors including Boston based Sandstone capital and Sequoia capital.
In September 2010, reports surfaced in the media of nearly 200 suicides by defaulters of a
number of micro finance institutions, including SKS finance. This led to an enquiry by
the Andhra Pradesh government.
In 2014, the investors in the SKS Microfinance, Mauritius Unitus Corporation, Sequoia
Capital India Growth Investments and SKS Mutual Benefit Trust as well as its founder
Vikam Akula relinquished their roles as promoters.
In 2016, SKS Microfinance was renamed to Bharat Financial Inclusion Ltd.
In 2017, the company launched a loan approval system based on Adhaar to reduce the
time and cost involved in the loan approval process. In the same year, it also launched its
Kirana store (general store) service which allowed its customers to do financial
transactions by visiting its designated stores.
Later in 2017, the company entered into discussions of a possible merger with IndusInd Bank.
The merger received approvals from Reserve Bank of India, National Stock Exchange of
India and Bombay Stock Exchange later in 2018
Founded in 1998, Bharat Financial Inclusion Limited (Formerly known as SKS
Microfinance Limited) BFIL is a non-banking finance company (NBFC), regulated by
the Reserve Bank of India. BFIL distributes small loans that begin at Rs. 2,000 to Rs.
12,000 (about $44-$260) to poor women so they can start and expand simple businesses
and increase their incomes. Their micro-enterprises range from raising cows and goats in
order to sell their milk, to opening a village tea stall. BFIL uses the group lending model
where poor women guarantee each other’s loans. Borrowers undergo financial literacy
training and must pass a test before they are allowed to take out loans. Weekly meetings
with borrowers follow a highly disciplined approach. BFIL also offers micro-insurance to
the poor as well as financing for other goods and services that can help them combat
poverty. Currently, BFIL has 1324 branches in 18 states across India. The Company’s
mission is to provide financial services to the economically weaker sections.
THEORETICAL BACKGROUND
Microfinance
Microfinance is a category of financial services targeting individuals and small
businesses who lack access to conventional banking and related services. Microfinance
includes microcredit, the provision of small loans to poor clients; savings and checking
accounts; micro insurance; and payment systems. Microfinance services are designed to
reach excluded customers, usually poorer population segments, possibly socially
marginalized, or geographically more isolated, and to help them become self-sufficient.
Microfinance initially had a limited definition - the provision of microloans to poor

entrepreneurs and small businesses lacking access to credit. The two main mechanisms
for the delivery of financial services to such clients were: (1) relationship-based banking
for individual entrepreneurs and small businesses; and (2) group-based models, where
several entrepreneurs come together to apply for loans and other services as a group.
Over time, microfinance has emerged as a larger moment whose object is "a world in
which as everyone, especially the poor and socially marginalized people and households
have access to a wide range of affordable, high quality financial products and services,
including not just credit but also savings, insurance, payment services, and fund
transfers."
Proponents of microfinance often claim that such access will help poor people out of
poverty, including participants in the Microcredit Summit Campaign. For many,
microfinance is a way to promote economic development, employment and growth
through the support of micro-entrepreneurs and small businesses; for others it is a way for
the poor to manage their finances more effectively and take advantage of economic
opportunities while managing the risks. Critics often point to some of the ills of micro-
credit that can create indebtedness. Due to diverse contexts in which microfinance
operates, and the broad range of microfinance services, it is neither possible nor wise to
have a generalized view of impacts microfinance may create. Many studies have tried to
assess its impacts.
History of Microfinance
Over the past centuries, practical visionaries, from the Over the past centuries, practical
visionaries, from the Franciscan friars who founded the community-oriented pawnshops
of the 15th century to the founders of the European credit union movement in the 19th
century (such as Friedrich Wilhelm Raiffeisen) and the founders of the microcredit
movement in the 1970s (such as Muhammad Yunus and Al Whittaker), have tested
practices and built institutions designed to bring the kinds of opportunities and risk-
management tools that financial services can provide to the doorsteps of poor people.
While the success of the Grameen Bank (which now serves over 7 million poor
Bangladeshi women) has inspired the world,[citation needed] it has proved difficult to
replicate this success. In nations with lower population densities, meeting the operating
costs of a retail branch by serving nearby customers has proven considerably more
challenging. Hans Dieter Seibel, board member of the European Microfinance Platform,
is in favour of the group model. This particular model (used by many Microfinance
institutions) makes financial sense, he says, because it reduces transaction costs.
Microfinance programmes also need to be based on local funds.
The history of microfinancing can be traced back as far as the middle of the 1800s, when
the theorist Lysander Spooner was writing about the benefits of small credits to
entrepreneurs and farmers as a way of getting the people out of poverty.[citation needed]
Independently of Spooner, Friedrich Wilhelm Raiffeisen founded the first cooperative
lending banks to support farmers in rural Germany.
The modern use of the expression "microfinancing" has roots in the 1970s when
Grameen Bank of Bangladesh, founded by microfinance pioneer Muhammad Yunus, was
starting and shaping the modern industry of microfinancing. The approach of
microfinance was institutionalized by Yunus in 1976, with the foundation of Grameen
Bank in Bangladesh. Another pioneer in this sector is Pakistani social scientist Akhtar
Hameed Khan.
Since people in the developing world still largely depend on subsistence farming or basic
food trade for their livelihood, significant resources have gone into supporting Over the
past centuries, practical visionaries, from the Franciscan friars who founded the
community-oriented pawnshops of the 15th century to the founders of the European
credit union movement in the 19th century (such as Friedrich Wilhelm Raiffeisen) and
the founders of the microcredit movement in the 1970s (such as Muhammad Yunus and
Al Whittaker), have tested practices and built institutions designed to bring the kinds of
opportunities and risk-management tools that financial services can provide to the
doorsteps of poor people. While the success of the Grameen Bank (which now serves
over 7 million poor Bangladeshi women) has inspired the world,[citation needed] it has
proved difficult to replicate this success. In nations with lower population densities,
meeting the operating costs of a retail branch by serving nearby customers has proven
considerably more challenging. Hans Dieter Seibel, board member of the European
Microfinance Platform, is in favour of the group model. This particular model (used by
many Microfinance institutions) makes financial sense, he says, because it reduces
transaction costs. Microfinance programmes also need to be based on local funds.
SUPPORT OF MICROFINANCE INSTITUTIONS TO PEOPLE Industry data from

2006 for 704 MFIs reaching 52 million borrowers includes MFIs using the lending
methodology (99.3% female clients) and MFIs using individual lending (51% female
clients). The delinquency rate for solidarity lending was 0.9% after 30 days (individual
lending—3.1%), while 0.3% of loans were written off (individual lending—0.9%).
Because operating margins become tighter the smaller the loans delivered, many MFIs
consider the risk of lending to men to be too high. This focus on women is questioned
sometimes, however a recent study of micro entrepreneurs from Sri Lanka published by
the World Bank found that the return on capital for male-owned businesses (half of the
sample) averaged 11%, whereas the return for women owned businesses was 0% or
slightly negative. It is argued that by providing women with initial capital, they will be
able to support themselves independent of men, in a manner which would encourage
sustainable growth of enterprise and eventual self-sufficiency. This claim has yet to be
proven in any substantial form. Moreover, the attraction of women as a potential
investment base is precisely because they are constrained by socio-cultural norms
regarding such concepts of obedience, familial duty, household maintenance and
passivity. The result of these norms is that while microlending may enable women to
improve their daily subsistence to a steadier pace, they will not be able to engage in
market-oriented business practice beyond a limited scope of low-skilled, low-earning,
informal work. Studies have noted that the likelihood of lending to women, individually
or in groups, is 38% higher than rates of lending to men. The result is that microfinance
continues to rely on restrictive gender norms rather than seek to subvert them through
economic redress in terms of foundation change: training, business management and
financial education are all elements which might be included in parameters of female-
aimed loans and until they are the fundamental reality of women as a disadvantaged
section of societies in developing states will go untested. MICROFINANCE
INSTITUTIONS IN INDIA Loans to poor people by banks have many limitations
including lack of security and high operating costs. As a result, microfinance was
developed as an alternative to provide loans to poor people with the goal of creating
financial inclusion and equality.
Microfinance is defined as, financial services such as savings accounts, insurance funds
and credit provided to poor and lowincome clients so as to help them increase their
income, thereby improving their standard of living. In this context the main features of
microfinance are:
 Loan given without security

 Loans to those people who live below the poverty line.
 Members of SHGs may benefit from micro finance.
 Maximum limit of loan under micro finance Rs.25,000/-.
 Terms and conditions offered to poor people are decided by NGOs.
 Microfinance is different from Microcredit- under the latter, small loans are given
to the borrower but under microfinance alongside many other financial services
including savings accounts and insurance. Therefore, microfinance has a wider
concept than microcredit. In June 2014, CRISIL released its latest report on the
Indian Microfinance Sector titled "India's 25 Leading MFI's. This list is the most
comprehensive and up to date overview of the microfinance sector in India and
the different microfinance institutions operating in the sub-continent.
TYPES OF FINANCIAL ANALYSIS
A distinction may be drawn between various types of financial analysis either on the
basis of material used for the same or according to the modus operandi or according to
the objective of the analysis.
ACCORDING TO NATURE OF THE ANALYST
1. External Analysis It is made by those who do not have access to the detailed records
of the company. This group, which has to depend almost entirely on published financial
statements, includes investors, credit agencies and governmental agencies regulating a
business in nominal way. The position of the external analyst has been improved in
recent times owing to the governmental regulations requiring business undertaking to
make available detailed information to the public through audited accounts.
2. Internal Analysis The internal analysis is accomplished by those who have access to
the books of accounts and all other information related to business. While conducting this
analysis, the analyst is a part of the enterprise he is analysing. Analysis for managerial
purposes is an internal type of analysis and is conducted by executives and employees of
the enterprise as well as governmental and court agencies which may have regulatory and
other jurisdiction over the business.
ACCORDING TO MODUS OPERANDI OF ANALYSIS

1. Horizontal Analysis: When financial statements for a number of years are reviewed
and analyzed, the analysis is called ‘horizontal analysis’ As it is based on data from year
to year rather than on one date or period of time as a whole, this is also known as
‘dynamic analysis. This is very useful for long term trend analysis and planning.
2. Vertical Analysis: It is frequently used for referring to ratios developed for one date or
for one accounting period. Vertical analysis is also called ‘Static Analysis’. This is not
very conducive to proper analysis of the firm’s financial position and its interpretation as
it does not enable to study data in perspective. This can only be provided by a study
conducted over a number of years so that comparisons can be effected. Therefore,
vertical analysis is not very useful.
ACCORDING TO THE OBJECTIVE OF THE ANALYSIS
On this basis the analysis can be long-term and short-term analysis:
1. Long-term Analysis:
This analysis is made in order to study the long-term financial stability, solvency and
liquidity as well as profitability and earning capacity of a business. The objective of
making such an analysts is to know whether in the long-term the concern will be able to
earn a minimum amount which will be sufficient to maintain a reasonable rate of return
on the investment so as to provide the funds required for modernization, growth and
development of the business. 2. Short-term Analysis:
This analysis is made to determine the short-term solvency, stability, liquidity and
earning capacity of the business. The objective is to know whether in the short-run a
business enterprise will have adequate funds readily available to meet its short-term
requirements and sufficient borrowing capacity to meet contingencies in the near future.
METHODS OF FINANCIAL ANALYSIS
The analysis of financial statements consists of a study of relationship and trends, to

determine whether or not the financial position and results of operations as well as the
financial progress of the company are satisfactory or unsatisfactory. The analytical
methods or devices, listed below, are used to ascertain or measure the relationships
among the financial statements items of a single set of statements and the changes that
have taken place in these items as reflected in successive financial statements. The
fundamental objective of any analytical method is to simplify or reduce the data under
review to more understandable terms.
Analytical methods and devices used in analyzing financial statements are as follows:
1. Comparative Statements.
2. Company Analysis
3. Ratio Analysis.
4. Cash Flow Statement.
Here we are discussing the Ratio analysis method in details, as it is very important to
measure the profitability, liquidity and leverage situation of the company for the Mergers
and Acquisitions.
RATIO ANALYSIS
Ratio analysis is used to evaluate relationships among financial statement items. The
ratios are used to identify trends over time for one organization or to compare two or
more organizations at one point in time. Ratio analysis focuses on three key aspects of a
business: liquidity, profitability, and solvency.
Ratio Analysis is a important tool for any business organization. The computation of
ratios facilitates the comparison of firms which differ in size. Ratios can be used to
compare a firm's financial performance with industry averages. In addition, ratios can be
used in a form of trend analysis to identify areas where performance has improved or
deteriorated over time.
Ratio is the symptoms like the blood pressure, the pulse or the temperature of an
individual. Just as in the case of an individual, a doctor or a valid by reading the pulse of
a patient or by studying the blood pressure or the temperature of a patient can diagnose
the cause of his ailment, so also a financial analyst through ration analysis of the
employment of resources and its overall financial position. Just as in medical science the
symptoms are passive factors, to diagnose them properly depends upon the efficiency
ACCOUNTING RATIOS
An absolute figure often does not convey much meaning. Generally, it is only in the light
of other information that significance of a figure is realized. A weighs 70 kg. Is he fat?
One cannot answer this question unless one knows A’s age and height. Similarly, a
company’s profitability cannot be known unless together with the amount of profit and
the amount of capital employed. The relationship between the two figures expressed
arithmetically is called a ratio. The ratio between 4 and 10 is 0.4 or 40% or 2:5. “0.4”,
“40%” and “2:5" are ratios. Accounting ratios are relationships, expressed in arithmetical
terms, between figures which have a cause and effect relationship or which are connected
with each other in some other manner.
Accounting ratios are a very useful tool for grasping the true message of the financial
statements and understanding them. Ratios naturally should be worked out between
figures that are significantly related to one another. Obviously no purpose will be served
by working out ratios between two entirely unrelated figures, such as discount on
debentures and sales. Ratios may be worked out on the basis of figures contained in the
financial statements.
Ratios provide clues and symptoms of underlying conditions. They act as indicators of
financial soundness, strength, position and status of an enterprise.
Interpretation of ratios forms the core part of ratio analysis. The computation of ratio is
simply a clerical work but the interpretation is a taste requiring art and skill. The
usefulness of ratios is dependent on the judicious interpretations.
2.6.2 USES OF RATIO ANALYSIS
A comparative study of the relationship, between various items of financial statements,

expressed as ratios, reveals the profitability, liquidity, solvency as well as the overall
financial position of the enterprises.
CLASSIFICATIONS OF RATIOS
Different ratios calculated from different financial figures carry different significance for
different purposes. For example, for the creditor’s liquidity and solvency ratios are more
significant than the profitability ratios, which are of prime importance for an investor.
This means that ratios can be grouped on different basis depending upon their
significance. The classification is rather crude and unsuitable to determine the
profitability or financial position of the business. In general, accounting ratios may be
classified on the following basis leading to overlap in many cases.
2.6.3.1 According To The Statement Upon Which They Are Based
Ratios can be classified into three groups according to the statements from which they are
calculated:
1) Balance Sheet Ratios
They deal with relationship between two items appearing in the balance sheet, e.g.,
current assets to current liability or current ratio. These ratios are also known as financial
position ratios since they reflect the financial position of the business.
2) Operating Ratios or Profit and Loss Ratios
These ratios express the relationship between two individual or group of items appearing
in the income or profit and loss statement. Since they reflect the operating conditions of a
business, they are also known as operating ratios, e.g., gross profit to sales, cost of goods
sold to sales, etc.
3) Combined Ratios
These ratios express the relationship between two items, each appearing in different
statements, i.e., one appearing in balance sheet while the other in income statement, e.g.,
return on investment (net profit to capital employed); Assets turnover (sales) ratio, etc.
Since both the statements are involved in the calculation of each of these ratios, they are
also known as inter-statement ratios.
Since the balance sheet figures refer to one point of time, while the income statement
figures refer to events over a period of time, care must be taken while calculating
combined or inter-statement ratios. For example while computing assets turnover ratio,
average assets should be taken on the basis of opening and ending balance sheets.
Role of Microfinance in Economic Development
Poverty Alleviation
According to World Bank report 1.4 billion population in developing countries is living
on less than 1.25 US dollar a day. That’s why to alleviate poverty by the year 2019 is one
of the major millennium development goal announced by UNO in 2008. To eradicate
poverty most of the nations have been pursuing various policies and programs. Among
these most effective policy adopted by the low income countries in the world is
microfinance because it has been found an effective tool for lifting the poor by providing
them financial services to start or expand a small business that enables them to break out
of poverty. In other words, it enables them to earn an income so they no longer have to
struggle to afford food, clean water, healthcare and education for their children. These
small businesses also create employment opportunities for such local communities where
jobs are rare. It helps them to earn extra income.
Financial Inclusion
Microfinance has been recognized as an important tool in connectivity the unbanked
population to mainstream institutional banking services. It has contributed to reduce their
dependency on informal money lenders and noninstitutional sources.
Development of Skills
Microfinance has helped in identifying the potential rural entrepreneurs. SHGs encourage
its members to set up their businesses jointly or individually. They receive training from
their supporting institutions and learn leadership qualities. Thus, microfinance helps
indirectly in the Development of Skills.
Global Poverty
Financial stability to poor and low income families through small loans may break the
poverty cycle for future generations. As many of these communities started growing, the
local economies are started flourishing. The gross domestic product of the country started
increasing and gap between the poorer and wealthiest people has also decreased.
Financial Stability
Microfinance has also played a greatest in providing financial stability to people which
contributed to local economies in substantial extent. Small loans have offered
opportunities to earn extra income, so that people can pay for their extreme necessities.
Credit to Rural Poor
Usually rural sector depends on non-institutional agencies for their financial

requirements. Micro financing has been successful in taking institutionalized credit to the
doorstep of poor and have made them economically and socially sound.
Economic Growth
Finance plays a key role in stimulating sustainable economic growth. Due to

microfinance, production of goods and services increases which increases GDP and
contributes to economic growth of the country.
Mobilization of Savings
Microfinance develops saving habits among people. Now poor people with meager
income can also save and are bankable. The financial resources generated through
savings and micro credit obtained from banks are utilized to provide loans and advances
to its members. Thus microfinance helps in mobilization of savings.
Mutual Help and Co-operation
Microfinance promotes mutual help and co-operation among members. The collective
effort of group promotes economic interest and helps in achieving socio-economic
transition.
Social Welfare
With employment generation the level of income of people increases. They may go for
better education, health, family welfare etc. Thus micro finance leads to social welfare or
betterment of society.
Rural India and Microfinance

Micro financing has become important since the possibility of a sub-Rs 1,000 mobile
handset has been ruled out in the near future. Rural India can generally afford handsets in
the price range of Rs 1,500-2,000. To succeed in India, agribusiness must empower the
farmer by making agriculture profitable, not by expropriating him foe this particular
purpose the farmer should be funded for their basic and small needs. Micro finance is
expected to play a significant role in poverty alleviation and development. The need,
therefore, is to share experiences and materials which will help not only in understanding
successes and failures but also provide knowledge and guidelines to strengthen and
expand micro finance programs. The development process through a typical micro-
finance intervention can be understood with the help of the following Chart. The ultimate
aim is to attain social and economic empowerment. Successful intervention is therefore,
dependent on how each of these stages has been carefully dealt with and also the
capabilities of the implementing organizations in achieving the final goal, e.g., if credit
delivery takes place without consolidation of SHGs, it may have problems of self
sustainability and recovery.
Women Empowerment
Microfinance is an important tool not only reducing poverty but also empowering women
as normally more than 50% SHGs are formed by women. SHGs has proved to be
strategic tool for organizing women in groups and promoting their saving habits to gain
greater access to financial and economical resources. Poor women use small loans to start
a long chain of economic activity and raise their socioeconomic status in the society.
CHALLENGES OF MICROFINANCE IN INDIA:
Financial illiteracy:
One the foremost challenge in India towards the expansion of the microfinance sector i.e.
illiteracy of the people. This makes it tough in creating awareness of microfinance and
even harder to serve them as microfinance clients.
Client Retention:
client retention is a problem that makes a haul in growing the MFIs. There is concerning
28th client retention within the MFIs.
Loan Default:
Loan default is a problem that makes a haul in growth and enlargement of the
organization because around 73 loan default is identified in MFIs.
Language Barrier:
language barrier makes communication with the clients (verbal and written) is a difficulty
that makes a haul in growth and enlargement of the organization because around 54
language barrier has been identified in MFIs. Late Payments: Late payments are a
problem that makes a haul in growth and enlargement of the organization because late
payments are around 70th in MFIs.
Geographic Factors:
The Geographic factors create it troublesome to communicate with clients of far-flung

areas that produce a haul in growth and enlargement of the organization. MFIs are
primarily aimed to facilitate the BPL population of the country but due to lack of
infrastructure in those areas it becomes tough to succeed in them.
Debt Management:
Clients are uneducated regarding debt management. 70th of the clients in MFIs are
unaware of the very fact that how to manage their debt.
Negligence of Urban Poor:
It has been noted that MFIs pay more attention to rural areas and mostly neglect the urban
poor. Out of more than 800 MFIs across India, only six are presently focusing their
attention on the urban poor.
High Interest Rate: MFIs are charging very high interest which the poor find troublesome
to pay.
ACTIONS TO OVERCOME CHALLENGES:
The following are some actions to overcome the challenges faced by MFIs in providing
microfinance services to possess a sustainable development.
Transparency of Interest Rates:-
As it has been observed that, MFIs are using different patterns of charging interest rates
and some are charging extra charges and interest free deposits (a part of the loan amount
is kept as deposit on which no interest is paid). All this make the pricing very confusing
and therefore the borrower feels incompetent in terms of bargaining power. Therefore a
common follow for charging interest ought to be followed by all MFIs so that it makes
Proper Regulation:-
When the microfinance was in its emergent stage and individual institutions were liberal
to bring in innovative operational models, the requirement for a regulatory atmosphere
was not an enormous concern. However, as the sector completes nearly two decades of
age with a high growth trajectory, an enabling regulatory atmosphere is required that
protects interest of stakeholders as well as promotes growth.
Encourages Rural Penetration:-
It has been seen that rather than reducing the initial price, MFIs are opening their
branches in places that already have a few MFIs operating. Encouraging MFIs for
opening new branches in areas of low microfinance penetration by providing financial
help will increase the outreach of the microfinance within the state and check multiple
lending. This will also increase rural penetration of microfinance within the state.
LITERATURE REVIEW
Kumar Vipin et. al. (2015) study concluded that the SHG’s and MFI’s are playing a
vital role in delivery of microfinance services which leads development of poor and low
income people in India. However, slow progress of graduation of SHG members, poor
quality of group functioning, dropout of members from groups etc., have also been
reported various study findings in different parts of the country, which need to be taken
into account while designing the road map for the next phase of the SHG programmed.
Nikita (2014) study concludes that first time in the year 2012-13 after the launch of
SHGs BLP there is a decline in the number of SHGs who’s saving linked with banks. The
study also finds out there was growth in the loan outstanding of SHG and which was
responsible for increases in NPAs. At last it is found out that the major share belongs to
commercial banks when the agency wise loan issued to MFI. He suggested that steps
should be taken to improve the performances of programs launched under Microfinance
time to time.
Mahanta et. al. (2012) Study revealed that lending to the poor through microcredit is not
the end of the problem but beginning of a new era. If effectively handled, it can create
miracle in the field of poverty alleviation. But it must be bundled with capacity building
programs. Government cannot abdicate its responsibility of social and economic
development of poor and downtrodden. The absence of any special skills with the clients
of microcredit, the fund is being used in consumption and procurement of nonproductive
assets. Hence it is very important to provide skills development training program like
handicraft, weaving, carpentry, poultry, goat rearing, masonry, bees farming, vegetable
farming and many other agricultural and non-agricultural training. Government has to
play proactive role in this case. People with some special skills have to be given priority
in lending microcredit. These clients should also be provided with post loan technical and
professional aid for success of their microenterprises. If government and MFIs act
together then microcredit can play a great role in poverty alleviation.
Maruthi Ram Prasad, Sunitha and Laxmi Sunitha (2011) conducted a study on
Emergency and Impact of Micro-Finance on Indian Scenario. After the pioneering efforts
by Government, Banks, NGOs, etc the microfinance scene in India has reached in take
off stage. An attempt could be initiated to promote a cadre of new generation micro-
credit leaders in order to strengthen the emergence of Micro-Finance Institution (MFIs),
so as to optimize their contribution towards the growth of the sector and poverty
alleviation. Each Indian state could consider forming multi-party working group to meet
with microfinance leaders and have a dialogue with them about how the policy
environment could be made more supportive and to clear up misperceptions. With one
state leading the way, we need to build on a successful model. By unleashing the
entrepreneurial talent of the poor, we will slowly but surely transform India in ways we
can only begin.
Idowu Friday Christopher (2010) conducted a study to find the Impact of Microfinance
on Small and Medium-Sized Enterprises in Nigeria. The fundamental objective of this
study is to assess the impact of Microfinance on Small and Medium Enterprises (SMEs)
in Nigeria. Simple random sampling technique was employed in selecting the 100 SMEs
that constituted the sample size of the research. Structured questionnaire was designed to
facilitate the acquisition of relevant data which was used for analysis. Descriptive
statistics which involves simple percentage graphical charts and illustrations was
tactically applied in data presentations and analysis. The findings of the study reveal that
significant number of the SMEs benefitted from the MFIs loans even though only few of
them were capable enough to secure the required amount needed. Interestingly, majority
of the SMEs acknowledge positive contributions of MFIs loans towards promoting their
market share, product innovation achieving market excellence and the overall economic
company competitive advantage. Other than tax incentives and financial supports, it is
recommended that Government should try to provide sufficient infrastructural facilities
such as electricity, good road network and training institutions to support SMEs in
Nigeria.
Otero (1999), illustrates the various ways in which “microfinance, at its core combats
poverty”. She states that microfinance creates access to productive capital for the poor,
which together with human capital, addressed through education and training, and social
capital, achieved through local organisation building, enables people to move out of
poverty (1999). By providing material capital to a poor person, their sense of dignity is
strengthened and this can help to empower the person to participate in the economy and
society (Otero, 1999).
Goankar, Rekha. (2001), the study resolved that the program of SHGs can considerably
add towards the decline of poverty and unemployment in the rural sector of the economy
and the SHGs can lead to social change in terms of economic growth and the social
modification.
Jayasheela, Dinesha P T and V.Basil Hans (2008), in their paper on “Financial

inclusion and microfinance in India: An overview” studied the role of microfinance in the
empowerment of people and provision of a sustainable credit availability to the rural low
income population. The study relates to the opportunities available for the microfinance
institutions with an increasing demand for credit in the rural areas due to inadequate
formal sources of credit.
Verma, Renu.(2008), in her article concludes that microfinance is expected to play a

significant role in poverty alleviation and rural development [J. Ref.No.30,P/163].
Microfinance has, in the recent past become one of the more premising ways to use core
development funds to achieve the objectives of poverty alleviation. Further he stated that
certain microfinance programs have gained prominence in the development field and
beyond. The ultimate aim is to attain social and economic empowerment. These
microfinance institutions may very well have had a major impact on improving the
standard of living of millions of poor people as well as on promoting economic
development. Therefore microfinance has become one of the utmost active involvements
for economic enablement of the poor.
Vani Kamath (2010), “Finding usage in access to banking and scope for microfinance in
Gulbarga District, Karnataka: A study of Financial Inclusion on Below Poverty Line
Families” summarized in the thesis the points like There is a significant difference
between Financial inclusion and lack of awareness by rural households. There is a
significant difference between the financial inclusion and institutional negligence by
banks. There is a significant difference between household perceptions about the formal
and informal sources of finance. There is a significant difference between access to a
savings account and usage of that account. There is no significant difference in the
perceptions of households between Self Help Group Savings and chit funds.
Ravikumar, (2016), “Contribution of Microfinance in empowering the women

entrepreneurs in Gulbarga city” concluded in his article women entrepreneurs have been
empowered in the different sections of their business operations and social status under
the dynamic guidance and support of micro finance institutions and if women
entrepreneur is given a proper guidance and training further that will definitely enhance
the profitability of the enterprises and the future will be bright and prosperous.
Dar & Presley (2000): examined and broke down the third zone about camel model (i.e.
management What's more control over internal governance about banks What's more
money related organizations). Those microfinance institutions and monetary
organizations of Muslim universe need aid though not seriously about. They found that
those a nonattendance of right parity between administration controls privileges may be
that real reason for the absence of benefit. In different produced countries, Bangladesh
bank acquainted camel rating framework to 1993. Similarly, as an essential analytics and
only offsite supervision framework.
Tucker and Miles (2004): studied that MFIs can be sustainable by either moving up the
interest on loan, commissions or both the two. But Increasing the costs for customers
probably increases the default rate. Increase in the cost of loan might not benefit the low-
income house hold rather subject them to been marginalized. In their study, it was
mentioned that microfinance institutions use the CAMELS technical note in their
financial reporting.
Satta (2006) studied the performance evaluation of small firms financing schemes with a
view to assessing their potential for improving small firms’ access to finance. It measured
financial performance in terms of net loans to total assets, non-financial investment to
total assets, written of loans, ROA.
Srinivasan et al. (2006) studied that Microfinance has been attractive to lending agencies
because of demonstrated sustainability and low cost of operations. In India, the
engagement of NABARD and SIDBI shows that they saw long-term prospect for this
sector. The study shows the growth and opportunities for MFIs in India.
Ayayi and Sene (2010) conducted research on 223 MFIs and revealed that credit risk
management was determining factor for financial performance. It stated it was important
to control cost. Interest rate had to be reasonably high to cover cost. In addition, they
discovered that use of relevant information and good banking practices and information
systems facilitate sustainability.
Mishra and Kumari (2011) selected 12 public and private sector banks on the basis of
market capture and measured the efficiency and soundness by Camel Model. From the
analysis they ranked the banks. They said that HDFC takes the lead followed by ICICI
and Axis Bank. Bank of Baroda and Punjab National Bank follows the fourth position
held by IDBI and Kotak Mahindra Bank. Public Sector Banks like SBI and Union Bank
takes the back seat. It donates that Private Sector Banks are performing better than Public
Sector Bank.
Kumar (2012) has given a definition to camel rating system, according to him it is a
mean to categorize bank based on the overall health, financial status, managerial and
operational performance. In his study he has chosen the SBI and its associates for
checking the performance and concludes that State Bank of India is always in the lead
than its associates in every aspect of camel.
Aspal and Malhotra (2013) measured the financial performance of Indian public-sector
banks’ asset by camel model and applying the tests like Anova, f test and arithmetic test
for the data collected for the year 20072011. They concluded that the top two performing
banks are bank of Baroda and Andhra bank because of high capital adequacy and asset
quality and the worst performer is united bank of India because of management
inefficiency, low capital adequacy and poor assets and earning quality. Central bank of
India is at last position followed by UCO bank and bank of Maharashtra.
Dr. Mahua Biswas (2013): Measured and evaluated the performance of two public
sector banks viz., Andhra Bank and Bank of Maharashtra with CAMEL model for a
period of 2011-2013have been collected from the annual reports of the banks and Twenty
variables as supported by the existing literature related to CAMEL model are used in the
study.
Chaudhary (2014) conducted a study to measure the right performance of public and
private sector banks by the use of secondary data collected from annual reports,
periodicals, website etc. for the year 2009-2011 and found out that in every aspect private
sector bank has performed better than public sector banks and they are growing at faster
pace.
Hoti and Alshiqi (2014) need to analyse the financial performance of the Banking
system in Kosovo from 20062012 using camel model and by calculating return on
investment. They concluded that they did not find any significance difference in the
overall performance of the banks and this thing can only happen in the times of global
financial crisis which was earlier faced by Kosovo, letting less sensitive effect. Most
banks were found with health balance sheet with a small level of reserves for loans.
Deutsche Financial Systems Development and Banking Services (2017): summarized
some of the tools and approaches used by conventional financial institutions and
suggested ways in which MFIs might further adapt and innovate to create the optimal risk
management culture within their own organizations by using US Federal Reserve’s
CAMELS analysis, citing Capital adequacy, Asset quality, Management quality,
Earnings quality, Liquidity, and Sensitivity to interest rates.
Muralidharan and Lingam (2017): measured and evaluated the financial performance
of 5 banks from 20072016 namely Bank of Baroda, Punjab National Bank, Central Bank
of India, Bank of India and Bank of Maharashtra. They gave ranking to all five banks
based on each ratio.
RESEARCH METHODOLOGY
Research Design:-
Research design or research methodology is the procedure of collecting, analyzing and

interpreting the data to diagnose the problem and react to the opportunity in such a way
where the costs can be minimized and the desired level of accuracy can be achieved to
arrive at a particular conclusion. The sample of the stocks for the purpose of collecting
secondary data has been selected on the basis of Random Sampling.
Source of Data:-
Sources of data may be classified into primary and secondary sources. Primary sources
are original sources from which the researcher directly collects data from the customer.
Secondary data has been collected from various sources to analyze the fundamentals. The
secondary data are collected from the various sources from where he can obtain For e.g.
book, magazine, newspaper, internet, publication and Annual report.
Research Method:-
Here, researcher used descriptive method for the study which is based on Secondary data.
The data used in this study are from a industry level data base on Microfinance India
corporate sector, complied by the moneycontrol.com
One company are Taken for analysis based on their revenue in last financial years.
The company must be listed in National Stock Exchange (NSE) India. The analysis is
based on secondary data published by the company annual report.
The following companies were selected for data analysis:
Sr.No. Company Name

1 Bharat Financial Inclusion Ltd.
DATA ANALYSIS
A. Company Analysis.
Information about No. one position listed Microfinance Company in India.
Bharat Financial Inclusion Ltd.
 Stock price(BFI) Rs.

 CEO: M.R.Rao
 Founded: 1997
 Industry: Finance
 Headquarters: Hyderabad,India.
 Number of employees: 16580(2018)
Founded in 1998, Bharat Financial Inclusion Limited (Formerly known as SKS

Microfinance Limited) BFIL is a non-banking finance company (NBFC), regulated by
the Reserve Bank of India. BFIL distributes small loans that begin at Rs. 2,000 to Rs.
12,000 (about $44-$260) to poor women so they can start and expand simple businesses
and increase their incomes. Their micro-enterprises range from raising cows and goats in
order to sell their milk, to opening a village tea stall.BFIL uses the group lending model
where poor women guarantee each other’s loans. Borrowers undergo financial literacy
training and must pass a test before they are allowed to take out loans. Weekly meetings
with borrowers follow a highly disciplined approach. BFIL also offers micro-insurance to
the poor as well as financing for other goods and services that can help them combat
poverty. Currently, BFIL has 1324 branches in 18 states across India. The Company’s
mission is to provide financial services to the economically weaker sections.
 Growth in Assets Under Management (AUM):-

Year FY2014 FY2015 FY2016 FY2017 FY2018 FY2019
Rs. Asset under
2016 2837 4171 7677 9150 12594
management
Rs (CR). Asset under management

14000
12000
10000
8000
6000
4000
2000
0
FY2014 FY2015 FY2016 FY2017 FY2018 FY2019
Analysis:-
From the above table researcher has observed that the Asset under management of
BFILtd. In Mar.2014 Is 2016 cr. after that increased in year Mar2015 is 2837 Cr. Asset
under management Increasing Year by Year in Mar. 2016 to Mar. 2019 is 4171 Cr. To
12594 Cr.
B. Operational Performance Analysis:-
Operational and Financial highlight Mar- 15 Mar-16 Mar-17 Mar-18 Mar-19
No. of branches 1,255 1,268 1,324 1,399 1,567

No. of districts 294 314 323 322 342
No. of employees 8,932 9,698 11,991 14,755 16,021
No. of members (in Lakh) 57.8 64.0 69.7 67.0 72.7
Disbursements for the year(₹ in crore) 4,787.6 6,890.8 12,087.8 14,666. 18,472.0
9
Gross loan portfolio (₹ in crore)* 3,112.8 4,184.5 7,688.0 9,149.6 12,594.4
Analysis:- Researcher see that operational performance of year 2015 to 2019. No of

branches open in Year 2015 is 1255 after that year 2018 is 1567. No of districts year
83092014 is 294 and after that year 2019 is 342. No of employees year 2015 is 8932 and
after year 2019 is 16021. Gross loan portfolio is year 2015 is 3112.8 Cr. And year 2019 is
12594.4
Financial Highlights Mar15 Mar-16 Mar-17 Mar-18 Mar-19

Incremental borrowings* (₹in crore) 3,703 5,561 8,309 8,022 12,401
Total revenue (₹in crore) 544.8 803.1 1,320.7 1,727.9 2,102.0
Profit after tax (₹in crore) 69.9 187.7 303.0 289.7 455.5
Total assets (₹in crore) 2,497.2 4,698.7 7,153.7 10,417.6 11,530.7
Return on average asset^ 2.3% 4.3% 4.2% 0.8%~ 2.8%~
Return on average equity 16.7% 21.6% 25.1% 3.9%~ 14.3%~
Analysis:- Incremental borrowings year 2015 is Rs. 3703Cr. And year 2019 is Rs
12401Cr. Total Revenue is year 2015 is 544.8 cr and year 2016 is 803.1cr year 2019 is
2102.0cr. Total asset of year 2015 is 2497. 2cr. and year 2016 is 4698.7, year 2017 is
37153.7, year 2018 is 10417.6cr and year2019 is 11530.7cr. Return on average asset is
year 2015 is 2.3%, year 2016 is 4.3%, year 2017 is 4.2%, year 2018 is 0.8% and year
2019 is 2.8%.
Total Revenue:
Revenue of BFI.LTD
Year 2015 2016 2017 2018 2019
Total Revenue(Cr.) 544.8 803.1 1320.7 1727.9 2102
TOTAL REVENUE(CR.)
2102
1727.9
1320.7
803.1
544.8
2015 2016 2017 2018 2019
Analysis:-
From above table it is analyzed that in Mar2015 is 544.8 Cr. And next year is increased
in Mar2016 to Mar2017 is 803.1 Cr. and 1320.7 Cr. After that decreased in next year in
Mar2018 is01227.9 Cr. In Next year Mar2019 is increased 2102Cr.
Borrowings:-
Year 2015 2016 2017 2018 2019

Borrowings(Cr.) 3703 5561 8309 8022 12401
Borrowings(Cr.)
14000
12000
10000
8000
6000
4000
2000
0
2015 2016 2017 2018 2019
Analysis:-
Table shows the Borrowings of BFILtd. Which is 3703cr in Mar2015 after that increased
in Year 2016 and 2017 is 5561Cr. And 8309Cr. Respectively. In next year Mar2018 is
decreased is 8022 Cr. After that increasing in next year Mar.2019 is 12401 Cr.
C. Ratio Analysis:-
1. CAPITAL ADEQUACY:
The analysis looks at the institution’s ability to raise additional equity in the case of
losses, and its ability to establish reserves against the risks inherent in its operations.
Other factors involved in rating and assessing an institution's capital adequacy are its
growth plans, economic environment, ability to control risk and loan and investment
concentrations.
a) CRAR = Capital/ Total Risk Weighted Credit Exposure.

The Showing Capital adequacy Ratio of BFILtd.
Year’s Mar,2015 Mar,2016 Mar,2017 Mar,2018 Mar,2019
Ratio 31.70% 23.10% 33.50% 34.60% 35.06%
Capital adequacy Ratio (RS)

40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
Mar,2015 Mar,2016 Mar,2017 Mar,2018 Mar,2019
Analysis:-
From above table it is analyzed that in Mar, 2015 CRAR. Of BFILtd. company was
31.70% and in Mar, 2016 it is decreased to 23.10%. and after that increasing CRAR In
Mar, 2017 it is 33.50%.again year Mar,2018 and Mar2019 increasing 34.60% and
35.06% respectively.
Interpretation:-
From the graph shown above it can be said that there is Mar 2015 is increases and year
Mar2016 is decrease after that continuously increase the yearly mar2017, mar2018, and
mar 2019.
b) Debt Equity Ratio:-
This ratio is ascertained to determine long- term solvency position of a company. Debt
equity ratio is also called “external internal equity ratio”. The ratio is calculated to
measure the relative portion of outsider’s funds and shareholders‟ funds invested in the
company. The best equity ratio shows the long- term financial position of an
organization. A lower debt equity ratio implies that a company as a better capacity to
meet in commitments.
Debt Equity Ratio=Borrowings/ (Share Capital + reserves)
The Showing Debt Equity Ratio of BFILtd.
Ratio 3.83 3.32 2.85 2.10 1.90
DE B T E Q UIT Y RAT IO
3.83
3.32
2.85
2.1
1.9
MAR,2015 MAR,2016 MAR,2017 MAR,2018 MAR,2019
Analysis:-
From the above researcher has observed that the debt to equity ratio in Mar 2015 was
3.83. and again decreased to Mar 2016 is 3.2 and Mar 2017, Mar2018, Mar2019 Yearly
by decreased the ratio is 2.85, 2.1, and 1.9 respectively.
Interpretation: -
Researcher see that is decrease in debt equity ratio from Mar2015 to Mar2019.
c) Total Advance to Total Asset Ratio:-
Total-debt-to-total-assets is a leverage ratio that defines the total amount of debt relative
to assets. This metric enables comparisons of leverage to be made across different
companies.
The higher the ratio, the higher the degree of leverage and, consequently, financial risk.
The total debt to total assets is a broad ratio that analyzes a company's balance sheet by
including long-term and short-term debt (borrowings maturing within one year), as well
as all assets—both tangible and intangible, such as goodwill.
Total Advance to Total Asset Ratio = Total Advances/ Total Asset
The Showing Total Advance to Total Asset Ratio of BFILtd.

Ratio 0.63 0.702 0.71 0.73 0.74

Total Advance to Total Asset Ratio
0.76
0.74
0.74
0.72 0.73
0.7 0.71
0.702
0.68
0.66
0.64
0.62 0.63
0.6
0.58
0.56
Mar,2015 Mar,2016 Mar,2017 Mar,2018 Mar,2019
Analysis:-
From the table analyzed that Total Advance to Total Asset ratio of company was
Mar2015 is 0.63 and Mar2016 was increasing is 0.702 and after that the years of
Mar2017 mar2018 mar2019 by increasing the 0.71, 0.73, and 0.74 respectively.
Interpretation:-
Total advance to total asset ratio is increasing continuously from 0.63 to 0.74 in
Year2015 to Year 2019.
2. ASSET QUALITY:-
This helps in analyzing the level of portfolio at risk and write-offs the existence and
application of credit policies and procedures. It results, how companies are affected by
fair market value of investments when mirrored with the company's book value of
investments.
a) Gross NPA Ratio:-
A nonperforming asset (NPA) refers to a classification for loans or advances that are in
default or in arrears. A loan is in arrears when principal or interest payments are late or
missed. A loan is in default when the lender considers the loan agreement to be broken
and the debtor is unable to meet his obligations.
Gross NPA Ratio = Gross NPA/Total Loan
The Showing Gross NPA Ratio of BFILtd.

Ratio 0.10% 0.10% 6% 7% 6.5%
GRO S S NPA RAT IO
6.50%
7%
6%
0.10%
0.10%
Analysis: -
From the above table researcher has observed that the Gross NPA Ratio in Mar2015 is
0.10% and next same year of Mar 2016 is 0.10%. after that increasing the ratio of year
Mar2017 is 6% and Mar2018 is 7% and Mar2019 is 6.50 was decreased the these year.
Interpretation: -
Gross NPA ratio is increasing 0.10% to 6.50% in Year Mar2015 to Mar2019.
b) Net NPA Ratio:-
Non-performing asset (NPA) ratio: The net NPA to loans (advances) ratio is used as a
measure of the overall quality of the bank's loan book. An NPA are those assets for which
interest is overdue for more than 90 days (or 3 months).
Net NPAs are calculated by reducing cumulative balance of provisions outstanding at a

period end from gross NPAs. Higher ratio reflects rising bad quality of loans.
Net NPA Ratio= Net NPA/Total Loan
The Showing Net NPA Ratio of BFILtd
Ratio 0.00% 0.00% 2.70% 2.90% 2.50%
NE T NPA RAT I O
2.90%
2.70%
2.50%
0.00%
0.00%

Analysis: -
Above table shows Net NPA Ratio which was 0% in mar2015 and mar2016. And after
that increasing the mar2017 is 2.70 and mar2018 is 2.90. and mar2019 is Net NPA was
decreased of 2.50%.
Interpretation: -
The lesser the gross NPA ratio is, the better it is for the MFIs. Year mar2015 and
mar2016 same ratio. And after that increasing the ratio and next year Mr2019 decreased
the ratio.
4. MANAGEMENT QUALITY:-
This component governs the general management, human resource policy, management
information systems (MIS), internal control and auditing. It covers the management's
ability to ensure the safe operation of the institution as they comply with the necessary
and applicable internal and external regulations.
a) Business Per Employee:-
Revenue per employee—calculated as a company's total revenue divided by its current

number of employees—is an important ratio that roughly measures how much money
each employee generates for the firm. The revenue-per-employee ratio is most useful
when comparing it against that of other companies in the same industry, or looking at
historical changes in a company's own ratio.
Business Per Employee = Total revenue/ No. of Employees
The Showing The Showing Business Per Employee of BFILtd

Ratio 828073 1101387 1169479 1175352 1256354
B US INE S S PE R E MPL O YE E
1256354
1175352
1169479
1101387
828073
Analysis: -
Business per employee in Mar2015 was 828073 and which was increased to 1101387 in
Mar2016 and again increased to 1169479 in Mar2017 and 11755352 in Mar 2018 and
1256354 in Mar2019.
Interpretation: -
Higher the business per employee, higher is the productivity of the human resource. The
above of the table shows that Year Mar2015 to Year Mar 2019 is increasing respectively.
b) Profit per employee:-
Profit per Employee is a measure of Net Income for the past twelve months (LTM)
divided by the current number of Full-Time Equivalent employees. Because labour needs
differ across sectors, this ratio is often used to compare companies within the same
industry.
Profit per employee = Net profit/ No. of Employees
The Showing Profit per employee of BFILtd
Ratio 193508.3 252674.1 196067.8 216795.4 223665.5
PRO FIT PE R E MPL O YE E

252674.1
223665.5
216795.4
196067.8
193508.3
Analysis: -
The above table shows profit per employee is 193508.3 in March 2015, in next year
Mar2016 it increased to 252674.1 and next year March2017 is 196067.8 And after that
increasing Year Mar2018 and Mar2019 is 216795.4 and 223665.5 respectively.
Interpretation: -
Higher the profit per employee, better is it for the employee and company. In Year
Mar2015 to Mar2016 was increased the profit per employee ratio and after next year
Mar2017 decreased and after Year Mar2018 and Mar2019 is increasing profit per
employee ratio.
c) Return On Net Profit:-
The Return on Revenue (ROR) is a measure of profitability that compares net income of
a company to its revenue. It is calculated by dividing net income by revenue. A business
can increase ROR by increasing profit with a change in sales mix or by cutting expenses.
ROR also has an impact on a firm’s Earnings Per Share (EPS), and analysts use ROR to
make investment decisions. ROR is a financial tool used to measure the profitability
performance of a company. Also called net profit margin.
Return On Net Profit= Net Income/ Revenue
The Showing Return On Net Profit of BFILtd
Ratio 0.90 5.20 0.90 3.20 2.50

RE T URN O N NE T PRO FIT
5.2
3.2
2.5
0.9
0.9
Analysis: -
The above table shows return on net profit is 0.90 in March2015. In next year Mar2016
increasing 5.2 and in Mar2017 decreasing is 0.9 after that increasing Mar 2018 is 3.2 and
next year 2019 is 2.50.
Interpretation: -
BFIL are earning good amount of profits from the capital they invested in fixed assets.
Return on net profit in Year Mar2016 is higher. After next Year Mar2017 is Return on
net profit is decreased. Next Year Mar2018 was Increased and next year Mar2019 is
decreased.
d) Net Profit to Total Asset:-
Net Profit to Total Asset= Net Income/ Total Asset

The Showing Net Profit to Total Asset of BFILtd
Ratio 5.30% 5.20% 0.90% 3.20% 2.50%
NET PROFIT TO TOTAL ASSET

5.30%
5.20%
3.20%
2.50%
0.90%
Analysis: -
from the above table it can be seen that Net Profit to Total Asset of company in
Mar,2015 is 5.30% and next year in Mar,2016 and Mar2017 decreased is 5.20% and
0.90% respectively. And increasing after next year Mar,2018 is 3.20% and Mar2019
decreasing is 2.50%.
Interpretation: -
Higher the net profit, better is the earning potential of the MFIs. Net profit to total asset is
decreased in the year mar2015 and mar2016 and after that increasing mar 2018 and next
year mar2019 is decreased.
4. EARNINGS EFFICIENCY:
The key components of revenues and expenses are analyzed, including the level of
operational efficiency and the institution’s interest rate policy, as are the overall results as
measured by return on equity (ROE) and return on assets (ROA).
a) Dividend Payout Ratio:-
The dividend payout ratio is the ratio of the total amount of dividends paid out to
shareholders relative to the net income of the company. It is the percentage of earnings
paid to shareholders in dividends. The amount that is not paid to shareholders is retained
by the company to pay off debt or to reinvest in core operations. It is sometimes simply
referred to as the 'payout ratio.'
Dividend Payout Ratio= Dividend/ Net Profit
The Showing Dividend Payout Ratio of BFILtd
Ratio 0% 0% 100% 0% 0%
DIVIDEND PAYOUT RATIO
100%
0%
0%
0%
0%
Analysis: -
From the above table seen that Dividend payout ratio is 0% in Year Mar2015, Mar2016,
Mar2018, and Mar2019. And Year Mar2017 is ratio of 100%.
Interpretation: -
These table shows the how much dividend they are paying to his holders so from the
above table it concludes that only BFILtd. Which was given 100% in the year of
mar2017.
b) Return on Assets:-
Return on assets (ROA) is an indicator of how profitable a company is relative to its total
assets. ROA gives a manager, investor, or analyst an idea as to how efficient a company's
management is at using its assets to generate earnings. Return on assets is displayed as a
percentage.
Return on Assets= Net Profit/ Total Assets
The Showing Return on Assets of BFILtd
Ratio 3.99% 4.23% 2.78% 3.95% 9.62%
RETURN ON ASSETS
9.62%
4.23%
3.99%
3.95%
2.78%
Analysis: -
From the above data researcher see that return on asset in Mar2015 is 3.99% after next
year Mar2016 increasing in 4.23% after that decreased the year Mar2017 is 2.78% and
after next year of Mar2018 and Mar2019 is increased is 3.95% and 9.62% respectively.
Interpretation: -
The return on assets (ROA) shows the percentage of how profitable a company's assets
are in generating revenue. ROAs over 5% are generally considered good. Mar 2015 and
Mar 2016 ROA is increased after that Mar2017 decreased next year mar2018 and
mar2019 was increased.
5. LIQUIDITY MANAGEMENT:-
The liability structure of the institution and the productivity of its current assets are also
important aspects of the overall assessment of an institution’s liquidity management.
Availability of assets which can easily be converted to cash, dependence on short-term
volatile financial resources can also help in judging the liquidity position of a company.
a) Current Ratio:-
The current ratio is a liquidity ratio that measures a company's ability to pay short-term
obligations or those due within one year. It tells investors and analysts how a company
can maximize the current assets on its balance sheet to satisfy its current debt and other
payables.
Current Ratio= Current Assets/ Current Liabilities.
The Showing Current Ratio of BFILtd
Ratio 1.67 1.88 1.62 1.68 1.69

CURRE NT RAT IO
1.88
1.69
1.68
1.67
1.62
Analysis: -
Company current ratio in Mar2015 was 1.67 and then next year it is increased to 1.88 in
Mar2016. After that next year it is decreased to 1.62in Mar2017. After thise year rapidly
increasing in year mar2018 and Mar2019 in 1.68 and 1.69 respectively.
Interpretation: -
The ideal ratio for current ratio is 2:1 and company have good ratio as it shows the
potentiality for its obligation.
b) Quick Ratio:-
The quick ratio is an indicator of a company’s short-term liquidity position and measures
a company’s ability to meet its short-term obligations with its most liquid assets.
Since it indicates the company’s ability to instantly use its near-cash assets (that is, assets
that can be converted quickly to cash) to pay down its current liabilities, it is also called
the acid test ratio. An acid test is a quick test designed to produce instant results—hence,
the name.
Quick Ratio= Quick Assets/ Current Liabilities
The Showing Quick Ratio of BFILtd
Ratio 1.67 1.88 1.62 1.68 1.69
QUICK RATIO
1.88
1.69
1.68
1.67
1.62
Analysis: -
From the above table researcher has observed that the quick ratio in Mar2015 was 1.67
and increased in Mar 2016 to 1.88and again it decreased to 1.62 in Mar2017. After that
the year Mar 2018 and Mar 2019 is increasing to 1.68 and 1.69 respectively.
Interpretation: -
Quick ratio is consider a more reliable test of short term solvency the current ratio
because it shows the ability of the business to pay short term debt immediately. Generally
a quick ratio of 1:1 is considered satisfactory. Graph and table we can see that BFILtd. Is
average quick ratio of 1.708 is good position.
FINDINGS OF THE STUDY
From the study Financial performance analysis on BFILtd. And data analysis and
interpretations of the ratios of BFILtd. Company the following findings have been given:
1. BFILtd. Company were performing well till 2015 with a positive trend in the
earnings per share. And after that it also going on increasing year by year.
2. Increasing EPS indicate good earnings.
3. From the balance sheet it is found out that the reserve and surplus of the company
is increasing every year.
4. The overall performance of the companies is good, and there is a continuous flow
of project business. The companies are continuing its drives for volume with a
continuous focus on profitability.
CONCLUSION
The study was conducted to check the Financial Performance of BFILtd. in India. The
analyze and judge the performance of financial institution as it helps to check the Capital
quality, asset quality, management efficiency, earning capability and liquidity position.
The Analysis and Performance has been checked the same and also suggestions have
been given for the same to improve the BFILtd.
The overall financial position of the company is quite healthy and over the last 5 years
which covered the period of study, the financial position has improved. The credit for this
improvement goes to efficient management, Long term vision of the management, team
spirit among the employs of the company higher level of orders in the hands of the
company, better realization and better overall economic condition of the economy with
increased emphasis of government on expansion and strengthening of economic
infrastructure, it is expected that BFILtd. Will gain a lot, its financial Ratio will improve
further and so the financial strength of the company.
REFRENCES & BIBLIOGRAPHY
1) Tucker. M. & Miles, G(2004), Financial Performance of Microfinance institution.

Journal of Microfinance/ ESR Review, 41-54.
2) Srinivasan R. and Sriram , M.S. (2006), “Microfinance in india: Discussion” IIMB

Management Review, pp6686. World Bank (2000), World development Report
2000/2001, Washington DC.
3) Sangmi. M. (2010) “Analysing financial performance of commercial banks in india: J.

Commerce. Soc. SCI, Vol.4, No.1 accessed from www.jespk.net/publicat ions/28.pdf on
23-Sept2014.
4) Choudhary, G. (2014), ―Performance Comparison of Private Sector Banks with the

Public-Sector Banks in India‖, International Journal of Emerging Research Management
& Technology.
5) AbhishekBehl&Manju Singh. (2014).Critical Analysis of Management Information

System of Selected Indian Microfinance Institutions,Procedia- Social and Behavioral
Sciences, Volume 133, 15, Pages 20–27
6) C.Bartual Sanfeliu., R.Cervelló Royo., I.MoyaClemente.(2013) Modelling Measuring

performance of social and non-profit Microfinance Institutions (MFIs): An application of
multicriterion methodology., journal of Mathematical and Computer., Volume 57, Issues
7–8, Pages 1671–1678.,
7) Annual Report, 2015-2019, Bharat financial Inclusion Ltd., Mumbai
Website:-
1) www.moneycontrol.com
2) www.BFILtd.com
3) www.equitymaster.com
Reports:-
Annual report of Bharat Financial Inclusion Ltd. 2019

APPENDIX
Balance Sheet Of Bharat Financial Inclusion Ltd.
Standalone Balance Sheet Mar 19 Mar 18 Mar 17 Mar 16 Mar 15

12 mths 12 mths 12 mths 12 mths 12 mths
EQUITIES AND
LIABILITIES
SHAREHOLDER'S
FUNDS
Equity Share Capital 140.21 139.32 137.98 127.31 126.29
Total Share Capital 140.21 139.32 137.98 127.31 126.29
Reserves and Surplus 4,084.37 2,859.37 2,308.76 1,255.68 920.16
Total Reserves and 4,084.37 2,859.37 2,308.76 1,255.68 920.16
Surplus
Total Shareholders Funds 4,224.58 2,998.69 2,446.74 1,383.00 1,046.46
Equity Share Application 0.00 0.06 0.00 0.00 0.01
Money
NON-CURRENT
LIABILITIES
Long Term Borrowings 0.00 2,385.82 2,208.54 2,268.74 1,057.22
Other Long Term Liabilities 44.67 10.29 7.57 0.00 0.00
Long Term Provisions 51.22 232.41 271.20 20.89 12.72
Total Non-Current 95.89 2,628.53 2,487.32 2,289.63 1,069.94
Liabilities
CURRENT LIABILITIES
Short Term Borrowings 4,778.39 606.35 1,123.72 644.32 609.63
Other Current Liabilities 1,130.44 5,195.03 4,208.01 2,760.70 1,927.19
Short Term Provisions 0.00 102.03 151.78 76.05 45.51
Total Current Liabilities 5,908.83 5,903.41 5,483.50 3,481.07 2,582.32
Total Capital And 10,229.30 11,530.69 10,417.56 7,153.70 4,698.73
Liabilities
ASSETS
NON-CURRENT
ASSETS
Tangible Assets 30.81 16.39 16.96 11.42 5.15
Intangible Assets 0.00 5.35 4.95 3.61 3.80
Intangible Assets Under 0.00 0.00 0.18 1.42 1.24
Developmen
Fixed Assets 30.81 21.74 22.08 16.45 10.20
Non-Current Investments 0.00 0.20 0.20 0.20 0.20
Deferred Tax Assets [Net] 163.30 0.00 0.00 0.00 0.00
Long Term Loans And 0.00 1,479.09 1,441.69 413.54 244.85
Advances
Other Non-Current Assets 59.20 116.68 68.28 179.27 125.23
Total Non-Current Assets 253.31 1,617.71 1,532.25 609.46 380.47
CURRENT ASSETS
Current Investments 0.20 0.00 0.00 0.00 0.00
Trade Receivables 6.76 11.37 10.93 6.37 3.42
Cash And Cash Equivalents 2,008.36 2,046.45 2,806.37 1,766.28 1,536.77
Short Term Loans And 7,619.46 7,751.66 5,985.43 4,608.02 2,713.55
Advances
OtherCurrentAssets 341.21 103.49 82.59 163.57 64.51
Total Current Assets 9,975.99 9,912.98 8,885.32 6,544.24 4,318.26
Total Assets 10,229.30 11,530.69 10,417.56 7,153.70 4,698.73
Profit & Loss Account Of Bharat Financial Inclusion Ltd.
Standalone Profit ------------------- in Rs. Cr. -------------------

& Loss account
Mar 15
Mar 19 Mar 18 Mar 17 Mar 16

INCOME
Revenue From 3,036.64 1,745.09 1,399.94 1,064.19 633.21
Operations
[Gross]
Revenue From 3,036.64 1,745.09 1,399.94 1,064.19 633.21
Operations [Net]
Other Operating 0.00 172.14 153.13 104.95 90.75
Revenues
Total Operating 3,036.64 1,917.23 1,553.08 1,169.13 723.96
Revenues
Other Income 0.15 184.77 174.83 151.54 79.11
Total Revenue 3,036.79 2,102.00 1,727.90 1,320.67 803.07
EXPENSES
Employee Benefit 640.57 526.38 406.16 292.37 231.85
Expenses
Finance Costs 788.80 710.41 622.46 484.57 279.05
Provsions and 0.00 235.04 359.35 38.64 10.05
Contingencies
Depreciation And 17.67 13.25 12.77 8.36 4.56
Amortisation
Expenses
Other Expenses 297.61 162.14 134.32 102.83 83.99
Total Expenses 1,744.65 1,647.22 1,535.07 926.78 609.50
Mar 19 Mar 18 Mar 17 Mar 16 Mar 15
12 mths
12 mths 12 mths 12 mths 12 mths
Profit/Loss Before 1,292.14 454.78 192.84 393.89 193.57
Exceptional,
ExtraOrdinary
Items And Tax
Profit/Loss Before 1,292.14 454.78 192.84 393.89 193.57
Tax
Tax Expenses-
Continued
Operations
Current Tax 307.54 78.92 109.43 90.91 5.94
Less: MAT Credit 0.00 78.92 206.28 0.00 0.00
Entitlement
Tax For Earlier 0.00 -0.70 0.00 0.00 -0.04
Years
Total Tax 307.54 -0.70 -96.85 90.91 5.90
Expenses
Profit/Loss After
Tax And Before
ExtraOrdinary
Items
Profit/Loss From 984.60 455.48 289.69 302.98 187.66
Continuing
984.60 455.48 289.69 302.98 187.66
Operations
Profit/Loss For 984.60 455.48 289.69 302.98 187.66
The Period
Mar 19 Mar 18 Mar 17 Mar 16 Mar 15
OTHER
ADDITIONAL
INFORMATION
EARNINGS PER
SHARE
Basic EPS (Rs.) 70.39 32.89 21.82 23.90 15.22
Diluted EPS (Rs.) 70.22 32.89 21.56 23.58 15.04
VALUE OF S RAW
IMPORTED AND E
INDIGENIOU
MATERIALS
STORES,
SPARES AND
LOOSE TOOLS
DIVIDEND AND
DIVIDEND
PERCENTAG
Cash Flow Statement Of Bharat Finacial Inclusion Ltd.
Mar Mar 18 Mar 17 Mar 16 Mar 15

19
12 12 mths 12 mths 12 mths 12 mths
mths
Net Profit/Loss Before Extraordinary 0.00 454.78 192.84 393.89 193.57
Items And Tax
Net CashFlow From Operating 0.00 - - - -
Activities 1,161.78 1,887.10 1,634.78 1,146.36
Net Cash Used In Investing Activities 0.00 -12.95 -18.77 -14.73 30.01
Net Cash Used From Financing 0.00 528.23 2,750.14 1,872.37 2,138.61
Activities
Net Inc/Dec In Cash And Cash 0.00 -646.50 844.27 222.86 1,022.25
Equivalents
Cash And Cash Equivalents Begin of 0.00 2,504.59 1,660.32 1,437.46 415.21
Year
Cash And Cash Equivalents End Of Yea 0.00 1,858.09 2,504.59 1,660.32 1,437.46

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A

DISSERTATION PROJECT REPORT

“A STUDY ON FINANCIAL PERFORMANCE OF MICROFINANCE

PIMPRI CHINCHWAD EDUCATION TRUST’S

I SACHIN RAMDAS PACHARNE, of MBA SYMBAFIN17, hereby declare that the

Place: Nigdi, Pune.

I wish to express my sincere gratitude to my institute to provide this opportunity to learn

Sr. No TOPIC Page No

2 OBJECTIVES OF THE STUDY

6 DATA ANALYSIS & INTERPRETATION

7 FINDINDG OF THE STUDY

9 REFERENCES & BIBLIOGRAPHY

The sector which is still in its infancy faces shortage of experienced

1. To understand the microfinance company in India. and role of microfinance

MICROFINANCE IN INDIA – AN OVERVIEW

Growth in Indian Microfinance Sector

Source: Microfinance India State of the Sector Report 2009

Primary Investments in Indian MFIs 2006 – Present

Bharat Financial Inclusion Limited (formerly known as SKS Microfinance Limited)

SKS Microfinance secured a Non-Banking Financial Company (NBFC) licence in 2005

In 2016, SKS Microfinance was renamed to Bharat Financial Inclusion Ltd.

Microfinance initially had a limited definition - the provision of microloans to poor

SUPPORT OF MICROFINANCE INSTITUTIONS TO PEOPLE Industry data from

 Loan given without security

TYPES OF FINANCIAL ANALYSIS

ACCORDING TO NATURE OF THE ANALYST

ACCORDING TO MODUS OPERANDI OF ANALYSIS

ACCORDING TO THE OBJECTIVE OF THE ANALYSIS

On this basis the analysis can be long-term and short-term analysis:

The analysis of financial statements consists of a study of relationship and trends, to

A comparative study of the relationship, between various items of financial statements,

2.6.3.1 According To The Statement Upon Which They Are Based

1) Balance Sheet Ratios

2) Operating Ratios or Profit and Loss Ratios

Role of Microfinance in Economic Development

Credit to Rural Poor

Usually rural sector depends on non-institutional agencies for their financial

Finance plays a key role in stimulating sustainable economic growth. Due to

Mutual Help and Co-operation

Rural India and Microfinance

CHALLENGES OF MICROFINANCE IN INDIA:

The Geographic factors create it troublesome to communicate with clients of far-flung

Negligence of Urban Poor:

ACTIONS TO OVERCOME CHALLENGES:

Transparency of Interest Rates:-

Encourages Rural Penetration:-

Jayasheela, Dinesha P T and V.Basil Hans (2008), in their paper on “Financial

Verma, Renu.(2008), in her article concludes that microfinance is expected to play a

Ravikumar, (2016), “Contribution of Microfinance in empowering the women

Research design or research methodology is the procedure of collecting, analyzing and

The following companies were selected for data analysis:

Sr.No. Company Name

Information about No. one position listed Microfinance Company in India.

Bharat Financial Inclusion Ltd.

 Stock price(BFI) Rs.

Founded in 1998, Bharat Financial Inclusion Limited (Formerly known as SKS

 Growth in Assets Under Management (AUM):-

Rs (CR). Asset under management

Operational and Financial highlight Mar- 15 Mar-16 Mar-17 Mar-18 Mar-19

No. of branches 1,255 1,268 1,324 1,399 1,567

Analysis:- Researcher see that operational performance of year 2015 to 2019. No of

Financial Highlights Mar15 Mar-16 Mar-17 Mar-18 Mar-19

2015 2016 2017 2018 2019