KERALA FINANCIAL CORPORATION
THIRUVANANTHAPURAM
APPRAISAL MEMORANDUM TO
THE EXECUTIVE COMMITTEE / BOARD
(MICRO FINANCE)
DOC NO.
PAGE NO.
DATE
AMP1F16
1 OF 10
01.05.2010
Amount Applied for
Amount Recommended
:
:
Date of application
:
Proposal for Sanction of Term Loan to ____________________ under
Micro Credit Scheme
1.
Proposal under consideration
Sanction of term loan
assistance of Rs. ___ lakhs (Rupees ___
lakhs) under Micro Credit Scheme to ____________(
).
2.
Partner MFI details
i)
ii)
iii)
iv)
Name of the MFI
Constitution/Type of MFI
Location (Regd. Office)
Area of operation
(jurisdiction in Kerala)
v) Name of Chief Functionary,
Qualification & Experience
 Brief on Board members and CEO is at Annexure I.
 Detailed shareholding pattern and background on key investors is at
Annexure II.
3. Appraisal done by:
4. (a) Previous assistance from KFC (in case of existing partner)
Particulars
Date of
Sanction
Loan 1
Loan 2
Loan 3
Total Loan
Total Grant
Repayment track record
Amt.
Sanctioned
Int. rate
(%)
Amt.
Disbursed
Outstanding
(as on ________)
Excellent / Good / Moderate / Poor
2
4 (b)
Borrowings from other Bank/Institution (as
(Rs.
in
on.....................)
Lakhs)
Name of Amount
Rate
of Amount
o/s as on Comments
Bank/FI
sanctioned interest
disbursed ,,,,,,,,,,,,,,,,,
.
5.
MFI Operational highlights
Particulars
FY ___
FY ____
FY ___
No. of Branches
No. of Members
No. of Borrowers
Loan disbursed during the year (Rs. lakh)
Outstanding portfolio (on balance sheet) (Rs. lakh)
Outstanding portfolio (off balance sheet) (Rs. lakh)
Portfolio growth rate %
Portfolio at risk > 90 days (% of own portfolio)
b)
c)
Effective interest rate to end user as certified by a CA: ___ % p.a.
Loan and other products offered, Break up of District wise portfolio,
Break up of portfolio by activity/ community are at Annexure IV.
Comments:




6
Financial Highlights
FY_____
Income from operations
Grants and other non-operational
income
Total Income
Financial Costs
Operating costs
Loan loss provision & write offs in P&L
Total Expenditure
PAT
Loan Portfolio (Net O/s)
Other assets
Fixed Assets
Total Assets
Networth
External Borrowings
2
FY____
FY____
(Rs. lakh)
Recent period
3
6
Financial Highlights
FY_____
FY____
FY____
(Rs. lakh)
Recent period
Loan Loss Reserve
Other liabilities
Total liabilities
Off balance sheet assets
6.1. Comments on financials
i.
ii.
iii.
iv.
v.
Comments on Income & expenses, off balance sheet arrangements,
networth, debts, OSS/ FSS, qualifying comments by the statutory auditor /
any remarks in notes to accounts which have a significant bearing on the
financials / write offs / purchase / sale of portfolio / other comments etc.
(otherwise to indicate that there are no adverse comments)
6.2. Comments on Financials & Operations of Sister/ Associate concerns




6.3.
Lending Model adopted by the MFI: SHG / Grameen / Others (Pl. specify)
d) Detailed projections covering the period of the loan - Annexure V.
e) Details of Rating /s is at Annexure VI. (BO to discuss the weaknesses
observed by rating agency and obtain an undertaking from the MFI that the
same shall be addressed to the satisfaction of SIDBI as per discussions held /
strategy agreed).
7.
i) Amount of loan
Present Proposal details
Rs. ___ crore
3
4
7.2. Eligibility norms/Parameters:
Prescribed norm
Status for compliance
i) MFI in existence for 5 years/or
demonstrated track record of
running a successful micro credit
programme for last 3 years.
ii) New MFI promoted and
managed by experience Micro
Finance
Professionals
with
experience of at least 3 years in
Micro credit.
iii) MFI has achieved minimum out
reach of 3000 poor members or
demonstrated the capability to
reach this scale within next 12
months.
iv) MFI should choose clients
irrespective of class, creed and
religion and its activity should be
secular in nature.
v) MFI maintenance satisfactory
and transparent accounting MIS
and Internal audit system or is
willing to adopt such practices
with the KFC assistance.
vii) MFI has a relatively low risk
portfolio or has definite plan to
further improve its recovery
performance.
vii) Activities of SHGs proposed to
be covered under the KFC
Assistance.
viii) Capacity Assessment Rating
of the MFI.
a) Rating Agencies:
b) Rating Grade given
4
5
by the agency:
c) Whether rating
satisfactory.
is
8
Status
Compliance
Key risk factors identified by the rating agency and our observations on the same.
Risk Factor
Our comments
(1)
(2)
(3)
9. Details whether the names of MFI Partners
a)
b)
RBI
c)
in the following.
No. and / or date
Caution list
Wilful defaulters’ list of
Yes / No
Yes / No
Wilful defaulters’ list of
Yes / No
CIBIL
d)
Blacklisted agencies of
Rashtriya Mahila Kosh
e)
Satisfactory credit Opinion
As on June 30, --of Bankers / Funding agencies
f)
KYC, AML and guidelines on non appearance of names
on Terrorists lists circulated by RBI
ii.
Benchmark norms
a)
Portfolio At Risk > 90 days
<10%
b)
Operational Self
>90%
Sufficiency
12
Yes / No
Yes / No
Yes / No
Yes / No
Yes / No
Relaxations, if any (with justifications)




13. Conclusion and Recommendations

The MFI has been associated with KFC/Banks/Fis such as
with
satisfactory conduct of the account and excellent repayment track record
(to be modified suitably in the case of new partner).
5
6

The present term loan of Rs. ___ lakhs will facilitate the MFI to further
scale up its operation. The proposal is based on the assessment made
as per projections given in Annexure - V.

Overall, the proposal is supportworthy.

In view of the foregoing, EC/Board is requested to consider and
sanction Term loan of Rs.___
lakh (Rupees _____________ ) to ___
(Name of MFI) on the standard terms and conditions (Only interest rate,
security and repayment terms to be filled up for each case, as given
below) as well as the special conditions given in Appendix:
Terms Sheet:
Repayment period
Initial moratorium
Rate of interest
Upfront fees
Security
____ years / months
____ months
___% p.a.
_____
Hypothecation of 100% book debts / assets
held in Trust or both
FDR 10% of the loan amount together and
the interest accrued thereon for a period of
..........years. Assets in any created out of
the assistance to be held in Trust by the
MFI on behalf in KFC.
MANAGING DIRECTOR.
Annexure I
List of Board Members and CEO along with brief background
Name &
Designation
Age
Qualification
Experience
Annexure II
Shareholding pattern
Name of the Shareholder
No. of
shares
Face value
Premium
Amount (Rs.__)
6
Percentage of share
holding
7
Total
Background of investors




Annexure III
Details of sources of funds as on
Sl.
No
Institution
Nature of
Facility
Amt
Sanctioned
(Rs. Lakh)
Amt
Int.
O/s as on
disbursed Rate (%)
______
On Balance Sheet
1
2
Sub total (a)
Off Balance Sheet
1
2
Sub total (b)
TOTAL (a + b)
f) Clearly indicate if there are any overdues to any lender.
Annexure IV
Loan products, break up of portfolio, etc. of ________
Table A - Details of products
Name of
product
Maximum
loan
Repayment
period
Rate of interest
Flat / reducing
balance (%)
Table B - Statewise break up of portfolio
7
Fees /
charges
8
Name of State
Value of portfolio (Rs.
__)
Table C - Activity-wise Outstanding
Activity
Small business
Animal Husbandry
Service sector
Agriculture and allied activities
Others
Total
%
Table D – Class / group classification of beneficiaries of the MFI
Class / Caste
Scheduled Castes
Scheduled Tribes
Other Backward Classes
Minority communities
Others
Total
%
Annexure V
Detailed projections
Financial Details
Projections
for last FY
Actuals
for last FY
No of borrowers
Net portfolio
Growth
rate
of
portfolio
Total Assets
Networth
External Borrowings
Total liabilities
8
FY____
(Rs. Lakh)
FY___
FY____
9
Off balance sheet
assets
Income from
operations
Total Income
Financial Costs
Operating costs
Loan loss provision
Total Expenditure
PBT/ Deficit
PAT
Annexure VI
Rating Highlights
Category wise rating is as under :
Particulars
Name
of
Rating
agency
Date of rating
Rating Grade
Rating Validity
Equivalent grade
Interpretation of grade
1st Rating
2nd Rating
3rd Rating
Key risk factors identified by the rating agency and our observations on the same
Sl.
Risk Factor
Our Comments
(4)
(5)
(6)
Annexure VII
Break up of CB assistance proposed
S. No.
Description of component
9
Amount
(Rs.___)
1
0
Reviewed by GM
Approved by MD
GMI/AMF 0.15 APPSL MICRO
10
Issued by MR