Sarvodaya Finance records very impressive results in FY 2017/18

Sarvodaya Development Finance Ltd., a leading finance company in the forefront of finance industry, has recorded very impressive results during the last financial year 2017/18. The company achieved a number of tangible improvements encompassing many aspects, as a result of successfully implementing a series of strategic measures. 

In terms of overall financial health of the Company, Sarvodaya Finance’s internal risk matrix has now switched to predominantly green, with only a few amber and red spots remaining, with revenues, profitability, quality of portfolio, advance portfolio growth, deposit portfolio growth and efficiency indicators – all recording clear improvements. Portraying a strong and steadfast turnaround in its growth trajectory, Sarvodaya Finance displayed outstanding performance, rising from a slowdown in the previous year and recorded significant progress and positive growth in the 2017/18 financial year.

The Profit Before Tax (PBT) for the period under review grew to Rs. 114 million from a loss of Rs. 44 million in FY 2018/17. The company’s interest income escalated from Rs. 884 million to Rs. 1,180 million, recording a 33% hike. Several factors, such as the improvement in portfolio, as well as more focus towards SME, personal loans and leasing categories, have led Sarvodaya Finance to gain a distinct growth in interest income. Furthermore, the Profit After Tax (PAT) for the year under review was Rs. 81 million from a net loss of Rs. 35 million recorded in the previous year. 

Sarvodaya Finance also showed positive growth in its deposit sector, which recorded a 30% growth, rising from Rs. 3,564 million to Rs. 4,625 million. The growth in deposits also reflected upon the company’s lending portfolio, bringing its loan portfolio to record 41% increment by escalating from Rs. 3,761 million to Rs. 5,309 million. In terms of portfolio quality, the company recorded an improvement in Gross Non Performing Loan ratio (NPL) from 9.8% to 6.2%, while its net NPL improved from 4.5% to 2.6%. 

Several key factors led to the positive results in financial year 2017/18 mainly due to the steps taken by Sarvodaya Finance. New growth strategies implemented in lending and deposits areas have given the expected results. Steps taken to restructure Recovery, Legal and Litigation areas have shown very positive results and the company is quite optimistic that its full potential will be realised in the next few years. A performance based incentive and rewarding system that rewards high performance have started showing early results and this in turn encouraged all employees, especially those serving in the frontline, to be more passionate about their work while distinctively improving their productivity, efficiency and competency. 

Financial year 2017/18 saw some significant drives by the company such as the partnership drawn with LankaPay common ATM network to offer its customers the ultimate convenience of performing transactions from anywhere in the country. With a synergy drawn with the leading telecommunication provider – Mobitel, ‘mCash’ service was also introduced to Sarvodaya Finance customers, giving them exposure to the much deserved modern technology and the seamless benefits it brings. mCash offers a completely secure environment for the customers to perform their loan repayment at their door step via this mobile application, with added assurance of text notification on each transaction being made. 

Furthermore, Sarvodaya Finance has introduced a number of new products on both liability and leasing categories for its customers. ‘Aapu Gaman Cash’ – a new product was introduced specifically for SME clientele, offering them the advantage of obtaining money for urgent business needs within a matter of a day. Another leasing product introduced for three wheeler operators, waives fee in advance and also offers two complimentary tyres as well as free insurance for the first year. 

Under its liability category, Sarvodaya Finance has introduced ‘Daru Isuru’, a dual account for both parent and child, where a pre-defined amount is saved automatically to the child’s account, ‘Pancha’, from the parent’s account, on a monthly basis. Daru Isuru, which offers one of the highest interest rates in the market, can be maintained until the child turns 18 years of age. Moreover, in conjunction with the 60th anniversary of Sarvodaya Movement – the company’s parent organisation, Sarvodaya Finance has introduced a new account for the senior citizens called ‘60-60’. While delivering a number of benefits, 60-60 offers a free air ticket to the account holder for a pilgrimage in Dambadiva, and for non-Buddhists to visit their respective religious places in India. 

Sarvodaya Finance aims to optimally leverage on the strength of its affiliated organisations such as Sarvodaya Shramadana Societies and other related organisations, with a massive network spanning across the entire country. This would support Sarvodaya Finance to tap into an unprecedented potential through the generation of business leads, deposit mobilisation and brand visibility. 

Sarvodaya Finance believes in using modern technology to compete in the market and for operational efficiency. The company has also taken steps to enhancing skills of HR and preparing to face challenges posed by technology and mobile application in particular and leverage more on agent business in going forward.