Ujjivan Microfinance posts Profits of Rs. 9.63 crores, Slashes interest rates

Microfinance Focus, May 24, 2010: Bangalore based microfinance institution, Ujjivan Financial Services, has recorded its first year of profitable operations with a post-tax profit of Rs.9.63 Crores in the financial year 2009-10,  Extending further benefits to its customers after the first year of profitable operations, the Ujjivan Board also reduced loan interest rates. The reduction in interest rates ranges from 2.9 – 1.9% p.a. effective from July 1, 2010 for all new loans or renewals.

Mr. Samit Ghosh, Managing Director, Ujjivan said, “We have transformed from a start-up to a mature social enterprise in the year 2009-10. With maturity comes responsibilities and we hope we have delivered against these objectives to the satisfaction of all our stakeholders.” The profit s will translate into bonus for its employees who have built the Company over the last 5 years, a maiden token dividend of 2% subject to shareholders’ approval and Rs. 31.5 lakhs allocation to social development fund for projects to be undertaken by the branches along with the customers.

The annual interest rate for 1^st cycle business loans is reduced to 23% from 25% and for repeat cycle business loan it is reduced to 22% from 24.5%. For 1^st cycle family loans, the interest rate is reduced to 25% from 26.9% and for repeat cycle family loans it has come down to 24% from 26.9%. “As a company committed to our social mission and double bottom line, it is our obligation to not only pass on the benefits of scaling up to our customers but to also share our profitability in servicing the poor”, Mr. Ghosh said.

Ujjivan started operations in November 2005 under the guidance of Grameen Bank of Bangladesh. It now serves over 650,000 urban and semi-urban poor customers in 16 states across India including 89 districts through 250 branches and 3000 employees. In the last 5 years, Ujjivan has disbursed Rs.1009 crores of loans with a repayment rate of 98.96%. Ujjivan has wiped out the accumulated losses of Rs.5.85 Crores of the first four years of start-up operations and transferred Rs.1.9 Crores to Statutory Reserves.

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