SWADHAAR

Website: www.swadhaar.com

*Background: Swadhaar FinServe Private Limited (SFPL) is a Non Banking Financial Company (NBFC) that was set up with the objective of providing the urban poor increased access to financial services within the formal sector. It received approval from the Reserve Bank of India to operate as an NBFC in May 2008 and started operations on July 1, 2008.

The Company’s microcredit activity began with the inception of the non-profit entity, Swadhaar FinAccess (SFA), incorporated in 2005. With the Reserve Bank of India’s approval for SFPL to operate as an NBFC, the Company took over all of SFA’s micro-credit activity and its existing micro-credit portfolio of about Rs. 6 million in September 2008. SFPL’s client outreach over the past 8 months has increased to 10,000 clients (as at May 20, 2009), with an active outstanding portfolio of about Rs. 65 million.

Swadhaar’s mission is to make available regular, reliable, and efficient financial services to the economically active urban poor, enabling them to overcome poverty and meet aspirations for a better and more secure future.

Leadership: Swadhaar was co-founded by Veena Mankar (left) and Haseena Vahanvaty. Mrs. Mankar has over 30 years of experience in the banking and financial sector, while Mrs. Vahanvaty has more than 25 years of experience in the social sector, including working with poor communities to eradicate hunger under the Hunger Project. Mrs. Mankar is the Managing Director of Swadhaar FinServe Pvt. Ltd. and Mrs. Vahanvaty heads the non-profit, Swadhaar FinAccess.

Product offerings and clientele: SFPL currently provides microcredit loans to clients in and around Mumbai, India. Its target clientele is the economically active urban poor, which in Mumbai comprises close to one-third of the city’s population. The company has two loan products, a group loan product and an individual loan product.

Highlights and growth strategy: Since September 2008, SFPL has experienced over 400% growth in its client base, and about 1000% growth in its portfolio. The company has also expanded its geographic outreach from two locations to nine in Mumbai. It plans to expand to districts outside Mumbai starting this financial year.

SFPL client since: February 2008
Family background: 4 children (3 sons, 1 daughter)
Current loan cycle: Third
Business: Coconut seller 

 Ashokkumar owns a coconut stall in the Government Colony neighbourhood in Bandra (E). He heard about Swadhaar in early 2008 through one of the organisation’s Loan Officers and applied for a loan to help pay for his stock. Ashokkumar orders two varieties of coconuts – the locally sourced variety, and the larger, higher quality coconuts that come from Kerala (a state in South India). Coconut vendors usually pre-pay for 6 months worth of stock, which allows them to then hand-pick the coconuts from their provider daily, at no charge. The volume of the purchase dictates the profit margin they are able to make, with a higher volume yielding a larger profit.

With a first loan of Rs. 10,000 and subsequent loans of Rs. 20,000 and Rs. 30,000, Ashokkumar has been able to drastically increase the volume of his purchase, thereby improving his overall profit margins. After 5 years of running the coconut stall, Ashokkumar is still the only earner in his 6 person household. As a direct result of Swadhaar’s loans, Ashokkumar’s profit margins have significantly increased, allowing him to lead a more comfortable life. He has also been able to afford sending his four children, Atish, Ashutosh, Abhimanyu, and Saraswati aged 13, 12, 8 and 6 respectively, to school. “Prior to taking SFPL’s loans, I was always tense about not having enough money to make the payment. Now, thanks to SFPL I have no tension in running my business."