A PROJECT REPORT ON

A COMPARATIVE ANALYSIS OF 7 KEY PLAYERS IN THE

MICROFINANCE INDUSTRY IN UJJIVAN FINANCIAL SERVICES
PRIVATE LIMITED
AT JAKKASANDRA, BANGALORE

A project report submitted to the Visvesvaraya Technological University in partial

fulfillment of the requirements for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

Submitted by

SHREEJA. G. MENON
REG. NO.: 1CR08MBA98

Under the guidance of

EXTERNAL GUIDE INTERNAL GUIDE
Mrs. Sudha. Suresh Prof. Sonal Gupta
CA M.B.A., M.C.A
Chief Financial officer Professor

CMR INSTITUTE OF TECHNOLOGY

Department Of Management Studies
#132, AECS Layout, IT Park Road,
BANGALORE - 560 037

APR 2010/ 2008-10

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 C.M.R. INSTITUTE OF TECHNOLOGY

132, AECS Layout, IT Park Road

Bangalore 560037

DEPARTMENT OF MANAGEMENT STUDIES

CERTIFICATE

Certified that the project work entitled

A Comparative analysis of Ujjivan Financial Services Private Limited with seven key players
in the Microfinance industry
Is a bonafide work carried out by Shreeja. G. Menon at Ujjivan Financial Services Limited
in partial fulfillment for the award of degree of Master of Business Administration to the
Visvesvaraya Technological University, Belgaum in the year 2010.
It is certified that all corrections/suggestions indicated for internal assessment have been
incorporated in the report deposited in the department library. The project report has been approved
as it satisfies the academic requirements in respect of project work prescribed for the award of
Master of Business Administration Degree.

Signature of the Guide Signature of the HOD Signature of the Director

Prof. Sonal .Gupta Dr. C.Girish Dr.Col. (Retd) Mukesh.Kumar.V
MBA, MCA MBA, PhD. MBA, MCA, PhD.
CMRIT, Bangalore CMRIT, Bangalore CMRIT, Bangalore

Name of Student: Shreeja. G. Menon (1CR08MBA98)

External Viva
Name of Examiners Signature with Date

1.

2.

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 DECLARATION

I, Shreeja.G.Menon, fourth semester, student of the MBA Dept. in C.M.R. Institute Of

Technology, do hereby declare that this project report entitled COMPARATIVE ANALYSIS
OF UJJIVAN FINANCIAL SERVICES PRIVATE LIMITED WITH SEVEN KEY PLAYERS
IN THE MICROFINANCE INDUSRY, at UJJIVAN FINANCIAL SERVICES PRIVATE
LIMITED , has been submitted by me in partial fulfillment of the requirement, for the award of
the degree of MASTER OF BUSINESS ADMINISTRATION by the Visvesvaraya Technology
University, Belgaum, Karnataka.
The project is an independent work and has not been submitted to any other university for
the award of any degree or diploma.

Signature:

Date: Apr '2010 Shreeja.G.Menon

Place: Bangalore 1CR08MBA98

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 ACKNOWLEDGEMENT

I wish to pledge and reward my deep sense of gratitude for all those who have made this
project come alive.
I am gratefully indebted to my internal faculty guide Prof. Sonal Gupta; MBA, MCA
Senior Lecturer for MBA dept. at CMR Institute of Technology, for encouraging me and for
her constant support throughout the course of the project and helping me complete it
successfully.
A special note of gratitude goes to my external guide Mrs. Sudha Suresh; CA, CFO At
Ujjivan Financial Services Private Limited for providing me an opportunity to work in this
corporate exposure and for his support and guidance in this endeavor.
I would like to express my heart-felt gratitude to thank Dr. Col. (Retd.). Mukesh
Kumar.V, MBA, MCA, Phd. Director at CMRIT for his valuable suggestions and moral
support throughout the course of my project.
I wish to thank Mr. Rajath Singh, Finance Manager at Ujjivan Services Private Limited
for all that he has done, to help me work on my project. I finally thank my family and friends for
their constant support and guidance.

Shreeja. G. Menon

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 TABLE OF CONTENTS

Serial No. Contents Page No.

Executive Summary

1 PART A

Chapter I

Introduction 1

1.1 .Industry Profile 5

1.2. Company Profile 8

1.2.1. Background and inception 8

1.2.2. Nature of the business carried. 9

9
1.2.3. Vision, Mission and Quality Policy.
10
1.2.4 Products/service profile
12
1.2.5. Area of operation
13
1.2.6. Ownership pattern
14
1.2.7. Competitors information
14
1.2.8. Achievement / Award
15
1.2.9. Work flow model
17
1.2.10. Future growth and prospects
18
1.2.11 Functional analysis

2 Chapter II
McKinseys 7S frame work
26
3 Chapter III
SWOT analysis
31
4 Chapter IV
34
Analysis of Financial Statements

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 Chapter V
5 40
Learning experience

PART B
6
Chapter VI
Introduction 41

6.1. Statement of the problem 48

6.2. Objectives 48

6.3.Scope 49

6.4. Methodology 49

6.4.1. Sample size 50

50
6.4.2. Sampling technique
50
6.4.3. Limitations

7 Chapter VII
Analysis & Interpretation 51

8 Chapter VIII
Findings, Suggestion, Recommendations and Conclusion 80

9 Appendix

10 Bibliography

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 LIST OF TABLES

SERIAL TABLE CONTENTS PAGE

NO. NO. NO.
1 1.2.1 Loan products, amount and its description 11
2 1.2.2 Insurance products provided by the company 11
3 1.2.11.3 Employee head count 22
4 7.4 Social impact parameters 54
5 7.5 Comparison based on products offered 60-62
6 7.6 MFI benchmark 67

LIST OF GRAPHS

SERIAL GRAPH CONTENTS PAGE NO.

NO. NO.
1 7.1 Industry growth trend 6
2 7.2 Comparison of the number of customers 7
3 7.3 Presence in the number of states and the number of 7
branches
4 7.4 Comparison on the variety of loans offered 55
5 7.5 Business loan interest rates comparison 55
6 7.6 Comparison of operational self-sufficiency ratio 56
7 7.7 Comparison of return on asset 67
8 7.8 Comparison of return on equity 69
9 7.9 Comparison of debt to equity 70
10 7.10 Comparison of write-off ratio 72
11 7.11 Comparison of risk coverage ratio 73
12 7.12 Comparison of operating expense ratio 74
13 7.13 Comparison Of Cost Per Active Client 76
14 7.14 Comparison of average outstanding loan size 78

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 LIST OF CHARTS

SERIAL CHART CONTENTS PAGE NO.

NO. NO.
1 1.2.9.1 Work flow model 15
2 1.2.11.2 Organizational structure of operations 23
department
3 1.2.11.3 Organizational structure of credit department 24
4 2.4 National organization structure 28
5 2.5 Regional organization structure 28

LIST OF ABBREVIATIONS
1 CAR Capital adequacy ratio
2 CRISIL Credit Rating Information Services of India Limited
3 GDP Gross domestic product
4 INR Indian rupees (national currency)
5 MFI Microfinance institution
6 MSE Micro and small enterprise
7 MSME Micro, small, and medium enterprise
8 NABARD National Bank for Agricultural and Rural Development
9 NBFC Nonbank finance company
10 NGO Nongovernmental organization
11 NPL Non-performing loan
12 PAR Portfolio at risk
13 RBI Reserve Bank of India
14 ROA Return on assets
15 ROE Return on equity
16 RRB Regional rural bank
17 SHG Self-help group
18 CRM Customer Relationship Manager
19 CRS Customer Relations Staff
20 CGT Compulsory group training
21 GRT Group Recognition Test

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EXECUTIVE SUMMARY

Micro finance refers to- small savings, credit and insurance services extended to socially
and economically disadvantaged segments of society, for enabling them to raise their income
levels and improve living standards. The main aim of Micro-finance is to provide loan to poor
people or to below poverty line, who are not able to borrow from other sources and to make their
standard of living better.

Micro-finances concept was first given by the Nobel laureate Prof. Mohammad Yunus in
1976 and Standard Grameen Bank in that year and since then many countries has followed
Grameen bank model.

First a short overview of the development of the microfinance sector will be given,
showing that the concept of providing financial services to low income people is a much older
concept than is believed by many development practitioners and bankers around the world. This
is important as it underlies the contribution that microfinance institutions (MFIs) can make to the
development of the financial sector in their respective countries. It also gives an overview of
Ujjivan Financial Services Private Limited, a microfinance institution which provides loans to
poor working women in urban and semi-urban areas to areas to enable them to be free of
poverty.

In the second part, the topic Comparative analysis of Ujjivan Financial Services Private
Limited with seven key players in the Microfinance Industry is discussed in detail. The aim of
the project is to analyze the performance of Ujjivan Financial Services Limited at par with the
industry as a whole. Several microfinance institutions have been established and have been
operating towards resolving the credit access problem of the problem. In light of this, this study
has attempted to look at MFIs performance in the country from outreach and financial
sustainability angles using data obtained from secondary sources.

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