CASHPOR India: One Hundred & Still Batting

“CASHPOR India crossed 100,000 active loan clients in eastern UP and Bihar at the end of December, 2005. Together they had just over 400 million Rupees (about US$8.69 million) outstanding in their hands in the form of small loans for income-generation. Only 3.4% of this portfolio was at risk, having arrears of more than 4 weeks. This was an important milestone for CASHPOR India, not only in terms of the significance of our outreach to the poor, but also because of the high rate of growth of that outreach. It is only a year ago that I sent the message that we had reached 50,000 active loan clients. It had taken seven years to reach that figure. Now in one year we have doubled it!

This is the achievement mainly of our over 500 staff members, most of them center managers, directly interfacing with our female clients in their villages. Let me take this opportunity to thank them, and our supervisory staff led by 10 District Managers and the support staff at the head office under the guidance of J.S. Tomar, our Managing Director, for their hard work that is enabling us to begin to achieve our vision and mission of providing microfinance services to significant numbers of below poverty line households in the poorest part of India. Hearty congratulations to all of you!

Also important is the fact that CASHPOR Micro Credit (CMC) is on target to reach our overall business plan targets for the the fiscal year ending on 31 March, 2006. As of the end of the third quarter, 108% of the year-to-date target for active loan clients and 89% of that for loans outstanding, had been reached. Meanwhile loan portfolio quality remained satisfactory with 3.38% of it at risk, comfortably below the 5% maximum allowed by the business plan. Funders can continue to take our business plan targets seriously.

Districtwise there was a close race between Ghazipur and Ballia in terms of contributing the most to the company's achievements so far this fiscal year, with Ballia coming out on top with respect to net increase in active loan clients at 7,275, closely followed by Ghazipur with 7,161. Mirzapur fell to third place at 6,199. It was good to see Buxar rise to 4th place with 5,691, ahead of Chandauli with 3,987. Together the older 5 districts contributed 85% of the company's growth in terms of active loan clients. On net increase in loans outstanding, however, Ghazipur came out on top with Rs.33.6 million, followed by Ballia at Rs. 29.7 million. Surprisingly, Buxar took third place with Rs.24.4 million, ahead of Chandauli with Rs.19.6 million. Mirzapur fell to fifth place with only Rs.12.1 million. On Portfolio at risk, Ballia remained at the top and was joined by the newer districts of Bhabua, Deoria and Saran with 0%, followed again by Ghazipur at 0.33%. Buxar was next with 1.05% followed by Chandauli at 1.84%. Putting all three performance measures together, Ballia was the best performer during the first three quarters of the current fiscal year, getting first place on active loan clients and portfolio quality while coming second only to Ghazipur on portfolio growth. In fact, Ballia over-achieved its portfolio growth target by 44%, compared to 19% for Ghazipur. Buxar also did better than Ghazipur, with 33% over-achievement. So hearty congratulations to Ajay Shankar Misra, District Manager Ballia, and his hard-working staff for their outstanding performance! Congratulations to K. K. Singh, District Manager Ghazipur, and his staff, for maintaining the good growth and portfolio quality in their districts. Congratulations to Uma Shankar Yadav, District Manager Chandauli, and his staff for reviving growth and increasing portfolio quality in their district, which had been of concern to management. Congratulations finally to Rajesh Misra, District Manager Buxar, for showing that business plan targets can be reached even in a Bihar district.

Being on-target with the business plan means also that we should be on-target in terms of operational self-sufficiency, and that means that CMC should break even again as scheduled in two years, that is by the end of fiscal 07/08, with operations in ten districts, seven in eastern UP and three in Bihar. Three years later, when all those districts are operating at maximum capacity, that is serving about 50,000 below poverty line clients with about 80 center managers, CMC will have an outreach to the poor of over half a million households.

Simultaneously, CASHPOR Financial Services (CFS), our proposed Non Banking Finance Company (NBFC) which is expected to commence operations early next fiscal year, will be building its outreach to the poor in separate districts, but still in eastern UP and Bihar. Its business plan projects outreach to at least 385,000 below poverty line households within five years.

Thanks should also go to our bankers and other funders, particularly to ICICI Bank under the new "Partnership Approach", and to ABN-AMRO Bank, who have become our largest lender for on balance sheet business. It is good to see FWWB continuing to be a major lender, despite the rapid growth of our portfolio, to see SIDBI's return as a lender and to welcome Corporation Bank as our first PSB lender. Finally, we welcome UTI Bank and HDFC Bank under the "Partnership Approach". Together we will reach one million below poverty line households by 2010!