Director's Message

Dear Shareholders,

Greetings and Good day to all!

I am happy to connect with you through this message and present the Annual Report of MSM Microfinance Limited for the year FY 2021-22.

The past couple of years have been a period of intense action and reflection. We have seen a global pandemic, geopolitical tensions, supply chain disruptions and many other public and private upheavals. As the dust settles, and a clearer picture of the world ahead emerges, I believe we are standing at the threshold of a period of great opportunity and growth. In the face of widespread change, your company has shown remarkable resilience and adaptability, coming out stronger than ever, after catastrophic events like the global financial crisis or the pandemic. Regulators have been notably supportive of microfinance, balancing the needs of the microfinance institutions (liquidity and loan portfolio quality) with micro-borrowers (loan obligations). Measures like loan moratoriums, directed lending and credit-guarantees were effective in injecting liquidity, preventing financial distress and contagion in the sector. Access to liquidity, which had been an Achilles Heel in previous crises - was a key factor in microfinance institutions' ability to bounce back.

MSM even though had been through the three successive waves of Covid and the organizational transformations that these entailed, the macroeconomic slowdown that pre-dated Covid and fundamental changes in the industry that we belong to, and the strength to take all necessary provisions without damaging our financials and capital adequacy. Such resilience was shown by every employee across each business of your Company. During the year, we laid down our Transformation Journey “The Way Forward”, which articulated the aspirational goals for AUM growth, asset quality, interest margins, cost ratios ROA and so on.

The lenders to microfinance institutions, benefiting too from regulatory provisions, re - scheduled loans and steadily released funds for them. I look forward to sharing with you more milestones in this journey in the coming years.

Few words about the micro finance industry

Through decades, the microfinance industry has significantly contributed to the growth of the Indian economy by financing income-generating activities of marginalized section in both rural and semi-urban geographies. As per the MFIN’s Micrometer Report, March 2022, the total microfinance loan portfolio (outstanding amount of loans extended to microfinance borrowers) stood at Rs. 96,561 Crores as on March 31, 2022. MFIN Micrometer Q4 FY 21-22 MFI Industry serves 3.4 crores unique borrowers with 3.9 crores loan accounts.

The MFI sectors are confident of pacing ahead to a better future. MFI shall remain well-equipped to leverage the growing opportunities in the Indian financial services sector and can stay ahead of the changing industry dynamics. As new normal sets in, there are more reasons to believe that the microfinance growth engine is back on tracks, though the journey ahead may often be uphill.

Our performance

I am pleased to declare that the Company delivered a good performance during the financial Year 2022. Despite these challenging times our loan assets under management (AUM) increased to Rs. 85.67 Crores from Rs. 61.09 Crores during the previous year registering a growth of 40.00% Out of the total AUM as at 31st March 2022, Rs. 63.76 Crores was from Business Correspondence operations.

During the year, our Company added 5 branches resulting in the branch network increasing to 26 from 21 during the previous financial year.

The Company’s net worth stood at Rs. 15.21 Crores as on 31st March 2022 (Rs. 15.18 Crores previous financial year). Capital Adequacy Ratio of your Company stood at 61.44% % as on 31st March 2022, as against the minimum requirement of 15% stipulated by Reserve Bank of India.

At MSM Microfinance we have been tirelessly working towards providing formal financial support to the marginalized Empowering women and uplifting their lives have been one of our major focus areas. We provide affordable credit to women to help start their new businesses and also help in expanding them further.

Going ahead, our focus will be on increasing financial reach to the corners of the country, uplifting lives of the underserved population and most importantly marginalised women. We will continue to improve our digital infrastructure to have superior customer satisfaction. With our strong foundation and position in the industry, we are confident of seizing the upcoming opportunities in the microfinance space in India.

MSMs’ rich set of capabilities and contextual knowledge to transform, grow and build better futures. With scale and by steadily expanding its transformation capabilities, MSM is moving from pursuing opportunities, to shaping those opportunities in the years ahead.

Conclusively, I would like to thank our Board of Directors, Shareholders, Senior Management, our customers and employees for their continued support in these difficult times. I would also like to acknowledge the support provided by the banks and financial institutions.

Together we shall come out stronger.

Regards
Mohan Kumar Subramanyam