History of the Company
Pahal Financial Services Pvt. Ltd.( Earlier known as Kelkar Leasing Company Pvt. Ltd.) was started in 1994 as a Non-Banking Finance Company (NBFC) with a vision that the young blood of the family will take this company forward but as they went abroad, the company remained idle for many years. The present Management identified this company for doing microfinance since it was an existing NBFC registered with the Reserve Bank of India. The company was duly acquired on 8th February, 2011.The current promoters brought in the initial equity of Rs.2 crores and commenced the microfinance activities with a vision to provide holistic financial inclusion. The current promoters acquired the microfinance portfolio of Lok Vikas Nidhi (a Division of Vikas Centre for Development)-a well-known trust operating in the area of social development in Gujarat for over 25 years. Vikas did not wish to run the microcredit activity and hence the portfolio created under the Joint-liability group (JLG) methodology was acquired by the NBFC. The name has been subsequently changed from Kelkar Leasing Company Private Ltd to Pahal Financial Services Private Limited to reflect the nature of the work we have undertaken in ‘financial inclusion’. We have also obtained a status of NBFC-MFI as required by the Reserve Bank of India guidelines.
Along with the outstanding JLG portfolio of the trust having 7500 borrowers, the NBFC also acquired the existing infrastructure of branches running in more than 11 districts of Gujarat with trained human resource and having technology in place.
Since then Pahal has expanded its financial services to various parts of Gujarat, Madhya Pradesh, Maharashtra and Rajasthan after having done the primary survey of existing potential and understanding of the clients and the area of work.
The Company’s vision is to “promote holistic financial inclusion” across the entire spectrum of financial services including credit, savings/investments, insurance, remittances and advisory services. The idea is to engage the customer across the entire life cycle of her family and enable credit and income enhancement, wealth creation and contingency planning. We believe that any initiative to uplift the population at the bottom of the pyramid (BOP) requires scientific impact assessment of the initiatives undertaken. Going forward also, structured impact study of interventions made is going to be the critical to our strategy.
We have taken steps to offer intermediation through the credit products under our microfinance program. As a part of the strategic business model, we have covered the target segment not only thru own micro credit operations but by also through partnering with banks (as a Banking correspondent) and other financial institutions (as partners or franchisee model) Over and above this, we have mapped to facilitate both forward and backward market linkages to our clients thereby enabling a significant scale up in their earning capacity. Once we achieve a critical mass, we would be introducing insurance, investment and savings product. We are facilitating / encouraging our borrowers to open Bank accounts and route all the disbursements through the account.
All of the above initiatives have required a focused thrust on the “financial literacy” and “enterprise development” programs. Both these initiatives are at the corner stone of our product development initiatives. In our achievement of the objective we do foresee a need to have a section 8 company which will promulgate financial literacy and capacity building efforts.
Our entire business proposition is based on a sound understanding of the risks associated with the financial services business-these risks come from both the internal environment of the organization as well as the macro external environment. Our products and geographic strategy is intended to mitigate a lot of external risks and provide a robust business model. We also propose to have strong internal controls both at the management and the board levels with a clear focus on processes and transparency in dealings. Both the board and the current management team have a diverse mix of expertise which is intended to ensure both governance and execution of the overall strategy.
Internal Process Initiatives
This involves the following –
a) Putting in place “best in class” loan management systems and transactions engine to support efficient service delivery mechanisms with seamless information management.
b) In depth analysis of the growth and PAR (portfolio at risk) trends by aging, loan cycles, regions and causes.
All of our above actionable necessitate a robust technology platform. We have created a strong back office enabled by appropriate technology to facilitate efficient product and risk management backed by strong process orientation and optimizing on the transaction cost of doing the business.
a) We provide adequate customer training regarding the company, its processes and credit profile monitoring.
b) We have a Not for profit organization which is complementing the NBFC by non-financial intermediation and aimed at overall livelihood betterment through intervention for our clients across diverse sectors of health, education and enterprise development.