Satin Creditcare Chairman Speech

CHAIRMAN''S MESSAGE

Dear Shareholders,

FY19 has been an exceptional year for your Company, which crossed the uS$1 billion AuM mark to join the Ivy League of Companies in the Billion Dollar Club. This feat is a matter of immense pride and satisfaction for all of us at SCNL, and a clear endorsement of the success of our strategic focus on inclusive financial growth.

A major indicator of the success of our business strategy is our financial performance, which continues to improve year after year. For FY19, the Company''s consolidated GLp stood at Rs. 7,068 Crores, with consolidated PAT at Rs. 201 Crores -an increase of 169.4% over the previous year. Coupled with a collection efficiency level of Pre-demonetization times of ~99.5%, these numbers highlight the performance excellence of our business operations, whose efficiencies we are continuously maximizing through digitization and other initiatives. Going forward, we expect the GLP to rise further at the back of our wide operations, which now span 22 states and union territories, along with our market leading position in some states. As we continue to increase our geographic footprint, we see the growth parameters scaling up significantly in the coming quarters.

SCNL has distinguished itself as a pioneer in bringing new initiatives in its systems and processes, and this year was no exception. Our Risk Management Systems, proactive policies, along with our core values and excellent customer relationships, saw us through. We have brought in differentiated endeavours, such as real-time credit bureau check and real-time bank account verification while disbursing the loans to our clients. We ushered Psychometric Tool as a part of onboarding verification, which is unprecedented in the microfinance industry. SCNL, in close association with a credit bureau, has introduced credit score cards for the customer and center, which is a remarkable innovation in our processes.

A major breakthrough for cost optimization and enhanced efficiency has been the successful completion of pilot for Cashless Collection, which will bring more transparency in operations, reduce time of center meetings, de-risk cash handling challenges and slippages. This will contribute to increased productivity for our Community Service officers (CSOs), leading to better NIM.

Our foray into the South Indian markets, where we see a multitude of exciting possibilities for growth, is in line with our strategic approach to expand into new markets of greater potential. With this expansion, we shall be able to bring more and more people from low-income groups into the ambit of our inclusive charter. The move has also given a fillip to our ambitions to become a truly pan-India Company, with footprints in the most excluded markets of the country.

We have also, during the year, further diversified our product offerings to make them more encompassing and suited to the diverse needs of our growing customer base. Given the dynamically evolving nature of today''s credit culture, keeping pace with customers'' unique aspirations and needs can be quite challenging. At SCNL, we are continuously expanding the vistas of our business to deliver customized products and services to our customers. Our newly launched digital lending app "LoanDost" seeks to target the new millennial customers and address their need for faster turnaround with simplicity of procedure.

Another exciting development that we would like to share with you here is the receipt of NBFC license for your Company''s MSME arm, Satin Finserv Limited. We see an excellent opportunity for growth in MSME lending and will continue to strengthen our offerings in this domain.

Your Company had entered into Business Correspondent (BC) partnership with IndusInd Bank Ltd, in order to add a new source of raising funds. This relationship has built up over last year and proved very advantageous in terms of on-tap funding, highly capital efficient business, no liquidity cost, as well as validation of our processes by an institution like IndusInd. Another notable achievement notched by your Company during FY19 was the completion of 5 Securitization and 4 Direct Assignment transactions of Rs. 1,710 Crores.

SCNL has also evolved its business model to be a more broad-based financial services provider, and capitalize on its distribution reach built over the years. With this vision, the two subsidiaries of your Company, Housing and MSME, are taking good shape. These subsidiaries have the potential to tap the SCNL customers who have completed multiple cycles with us and now require a loan of higher ticket size. The portfolio of Satin Housing Finance Limited has touched Rs. 79.01 Crores with excellent portfolio quality with no delinquency.

These numbers tell a great story, but more importantly, they are an indicator to the way the future is mapping out for your Company and all its stakeholders. As your Company moves ahead with even greater commitment, in its mission of inclusion, we look ahead at a future that is even more exciting and promising for each one of us.

Thanking you,

With warm regards

H P Singh