"Our business spaces are brimming with opportunities. We will stay rooted in our
core values to make our success sustainable. Staying firm on our business philosophy
of‘Small steps make a Big Difference,' we will embed small initiatives in our
business model which, over time, will make a big difference to our market position."
It is with a sense of accomplishment and gratitude that I share the remarkable journey
we have undertaken over the past year, and the achievements that have come to fruition
through our collective dedication, commitment, and strategic initiatives. Our growth was
particularly satisfying as it happened during rising inflation and climbing interest
rates. The notable post-covid swing in the rural economy led to the emergence of robust
credit demand. All business verticals reported a strong uptick, successfully navigating
the challenges and surpassing prepandemic levels of growth.
FY23 holds a special place for me as we achieved significant milestones.
One, our wholly owned subsidiary Namra Finance, has been assigned the grading of MFI-1
(MFI One) by CARE Ratings. The rating is the highest possible grading for an MFI Company
to manage microfinance operations sustainably. This grading of MF11 (MFI One) will help
the Company improve its borrowing profile and lend confidence to all of our stakeholders
in our ability to manage operations at scale.
Two, we successfully raised Rs.115 crore through CCDs and OCRPS. This equity fund
raised will help the Company achieve its outlined strategy and afford us sufficient
capital to reach an AUM of Rs.2,70C crore or more.
Three, We have embraced digital technologies to streamline operations, enhance customer
experience, and reach a wider audience. Technology will continue to play a big role in
strategy going forward.
I believe that FY23 was very special as it marks a new chapter in Arman's history.
Microfinance, considerable runway ahead
The microfinance industry exhibited remarkable strength in the face of prevailing
volatility due to the Covid Pandemic.
The resilience of India's rural population never ceases to amaze me. The strong rural
economy is India's economic engine.
The new guidelines implemented in FY23 are an inflection point for the sector, ushering
in a new era of growth and sustainability for microfinance companies. This, coupled with
the resurgence in rural demand, has positioned microfinance as one of the fastest-growing
retail products.
Moreover, the large untapped market presents a significant growth opportunity over the
medium term.
At Arman, we are poised to capitalise on the growing opportunities in the microfinance
space. The small steps we have taken each year over the last decade have created a
volatility-hardened model capable of withstanding extreme circumstances; every challenge
has only made us that much better.
Our contemporary digital solutions that became our new operating platform have made us
increasingly fleet-footed and efficient. It has created appreciable excitement among the
team, with information at their fingertips. Our digital solutions have automated most of
our business processes and have been immensely useful in enhancing customer experience and
driving efficiency. In today's rapidly evolving landscape, technology and innovation are
integral to staying competitive and relevant.
Further, our extension into new contiguous territories has generated substantial
traction in the areas of our presence. While remaining true to our core strategy of asset
quality over business volumes, we will further expand our presence in new states as an
essential and strategic growth lever for the future.
Our individual loan piece, an extension of our microfinance business, has gained
acceptance and grown in size. We will drive this flanking vertical with cautious
aggression.
MSME, the backbone of an industrialised India
Our MSME vertical registered a solid performance for another consecutive year. This is
an excellent space to inhabit owing to the sizeable market. Moreover, our stringent
credibility filters, systems, and processes have ensured high collection efficiency
positioning this vertical as an important growth lever over the medium term. I am
particularly optimistic about its prospects.
India's ambition of emerging as the global manufacturing hub rests squarely on its
MSMEs. They play a vital role in nation building and the economy's growth. With India
fervent on its ambition of taking its economy past the US$1 tr mark, MSMEs' role in
India's growth will be decisive.
Despite the critical role played by MSMEs in India's progress currently and in the
foreseeable future, the issue of fund deficiency persists. Of the 64 Mn- plus MSMEs in
India, only 14% have access to credit compared to 30%+ in developed nations. While banks
and NBFCs cater to some of their credit requirement, a yawning credit gap of more than US$
500 billion remains unserved. This is a massive opportunity for players like us to fulfil,
albeit carefully with strong underwriting techniques.
Flaving set a firm footing in the MSME financing space, we will entrench our presence
in existing districts while cautiously extending our footprint into newer territories in a
calibrated manner.
A wrap-up
FY23 has set a new performance benchmark. Our single aim would be further improvement.
Our business spaces are brimming with opportunities. We will stay rooted in our core
values to make our success sustainable. Staying firm on our business philosophy of 'Small
steps make a Big Difference,' we will embed small initiatives in our business model,
which, over time, will make a big difference to our market position.
At Arman, our commitment extends beyond financial metrics. We take immense pride in the
positive impact we create on the lives of the underserved. We continued to provide access
to credit, promote entrepreneurship, and empower communities, all of which contribute to
the socioeconomic development of the nation. Our dedication to responsible lending
practices and ethical conduct remains unwavering.
Extending no further, I thank the Board for its guidance in framing and refining our
business strategies over the medium term. My sincere gratitude to all our customers and
financial agencies for believing in us. A big thank you to my exceptional Arman team.
Their dedication and disciplined efforts have uplifted Arman into prominence. I am proud
to be a part of them. I also extend my appreciation to all other stakeholders for your
support in ourjourney.
We start a new chapter of energy, efficiency, and excitement which appears to be
riveting. It will be an incredible journey together.
Warm regards
Jayendra Patel
Vice-Chairman & Managing Director.