1. By
Manoj Kumar,ZM(MPRJ)
SPANDANA EXPANSION
PLAN
(M.P., RAJASTHAN, U.P.)

2. Objective
 To emerge as Market leaderin Madhya
Pradesh by the end of this fiscal
 To rejuvenate Operations in Rajasthan
 To start Operations in UP

3. Industry/SectorAnalysis – MP-RJ
BARRIERS TO ENTRY
threat of new entrants
threat of substitutes
SUPPLIER
POWER
SUBSTITUTES
COMPETITIVE INTENSITY CUSTOMER
POWER
POLITICAL
ECONOMIC
SOCIO CULTURAL
TECHNOLOGICAL
Moving from High - Medium - low
Money Lenders
Co-Society/Bank and Chit Funds
Family and Friends
SHG - NGO/ Banks
New Innovative products from Bank industry - AXIS Bank
However, Switching cost is low
High
Trained Manpower
Creditability
Capital Base
Building Economies of Scale
Political Contact/Network
Economies of Scale
Low Switching Cost for Customer
Moving from Low to Medium
Low penetration. In addition, MFI is
comparatively very reasonable to current
borrowing options.
Collective Bargaining may be an issue in
near future.
Switching Cost is low
Medium
Bank will not have very asset pool than
the one they get from the MFIs
Strong base of 42 Banking relation and
over dependance on few lenders are
reduced.
Major Lenders has helped building
strong creditability hence obligated.
Moving from Low to Medium
Penetration is low. Hence, room for
competitors to enter and tap the untapped
market.
Exit Barrier is low with the current loan
outstanding which may increase with the
increase in the loan portfolio
Competitors not of the same school of thought
of industry growth and cooperate accordingly.
High
Medium
Low
- Political/Bureaucratic intervention
in the processes and recoveries
(Vested Interest)
- Loan Waivers
- Political interference during
unfortunate natural calamities
- Policies - PSL, Interest Rate, Securitizations
- Monetary Policy
- Increasing shift of corporate to the bottom of
the pyramid
- Economic Development - NRI Linkage
"Remittance"
- Availability of Bank Branches
- Better infrastructure can help reach out to
clients better and quicker
Community ethos not non
repayment/interest
Language Barriers
Gender issues
Possible Class/caste discrimination
Work Culture ( 9 to 6)
Grapevine - "Word of mouth"
prominent to establish creditability
Unique Indentification number
making if difficult for a MFI Credit
Buereu
Technological infrastructure to
run the business more efficiently

4. Proposed Branches
Division No. of Branches
Proposed Branches
1st
Phase (By 10 Dec.)
2nd
Phase (By 1st
Jan)
3rd
Phase (By 26th
Jan)
Bhopal 16
Bareli, Bhopal 2, Gwalior,
Jhansi 1, Sagar2, Deoni
Nasarullagunj,
Lalitpur, Gwalior 2,
Jhansi 2, Sehore 2
Ghodanagri, Bhopal 2,
Gwalior 3, Sheopur,
Garhakota
Jabalpur 16
Panduna, Rewa, Panagar,
Gadarwara 2, Singroli,
Allahabad
Sausar, Amarwada,
Sidhi, Patan
Balaghat, Chindwara 2,
Allahabad 2, Annupur,
Mirzapur, Dindori
Indore 18
Burhanpur, Baitma,
Sarangpur, Aalot, Ujjain 2,
Indore 4
Manasa, Deepalpur,
Tarana, Indore 5,
Rajgarh, Ratlam 2,
Dewas 2
Garoth, Baagli,
Ghatabillod, Manavar,
Susner,
Rajasthan 25
Udaipur1, Chittorgarh,
Ajmer1, Alwar
Jhalawad, Banswada,
Jaisamand, Jodhpur,
Dilwara, Kishangarh,
Shahpura,
Hanumangarh
Bhilwada, Baran,
Rajsamand, Jalsamand,
Dungrapur, Kotputli,
Bikaner, Ganganagar,
Rajgarh, Pushkar, Udaipur
2, Ajmer 2

5. Characteristics of MP’s MF market
• Market in horizontal development/growth phase –
geographical expansion.
• No. of MFIs growing. Multiple lending in nascent phase.
• Vertical penetration starting – subsequent cycles starting &
ticket size increasing, coverage of target group increasing.
• Product-bundling /product diversification/Product
differentiation starting - additional products being introduced
(Samhita’s social products in education & health,SKS’ mobile
selling.),different rate of interest by different players.
• Clients overall loyal and/or feel they have very few
other options, but some clients seek other options.
• High operation cost because of thin population density

6. Current Market Scenario – Madhya Pradesh
The Big Three
SKS SPANDAN
A
SHARE
Portfolio Size 160 Cr. 105 Cr. 90 Cr.
Clients 2.4 Lakhs 1.8 Lakhs 1.2 Lakhs
Branches 71 69 65
Individual
Lending
No No Yes
Age of
Operations
4 years 23 months 3 years

7. Current Market Scenario – Madhya Pradesh
OtherPlayers
(i) Samhita : Mostly in Rewa, Panna,Shahdol, and
Bhopal. Starting in Gwalior.
(ii)Fullerton India
(iii) Sahayata : Just started from Ujjain
(iv) Sonata : Jabalpur and Bhopal
(v) BASIX

8. Strategy
 Ambushing the market – opening branches in big way
after a lull that was a phase of consolidation.
 Opening branches in locations where
- there is need of the credit and good environment of micro-
enterprising
- minimum potential of 3,000 clients in the radius of 35 KMs
- other MFIs doing well
 Capitalizing on second/third mover’s advantage
 Non-experimental with the market

9. Characteristics of Rajasthan MF
market
 Horizontally in development/growth phase
 No. of MFIs growing
 Non-uniformity in commercial micro financing in
terms of geographical areas.
 Upon proper and regimented training members
are loyal
 Repayment problems because of staffs and ring
leaders
 Problematic community – Gurjar, Meena,
Nomadic

10. Current Market Scenario – Rajasthan
The Big Three
SKS SHARE +
Asmitha
Sahayata
Portfolio Size 160 cr. 35 Cr. 20 cr.
Clients 1.6 lacs 45,000 35,000
Branches 75 13+ 12=25 26
Individual
Lending
No No Yes
Age of
Operations
3 yrs. 12-14 months

11. Current Market Scenario – Rajasthan
OtherPlayers
 ARTH Finance – Haroti areas
 Ujjivan
 SPANDANA
 BASIX, and
 Fullerton India
• Market has still lot of potential although certain
areas need to be avoided (Gujjar and Meena
dominated)

12. Special strategy forRajasthan
 No old staff in new branches.Recruitment in
new areas.
 Opening branches in areas where other MFIs
are doing well- dist.HQ, urban areas etc.
 Not hiring staff of other MFIs
 Rigorous training of the process
 Slow pace in the beginning. Focus on quality
rather than quantity

13. Characteristics of U.P.’s MF
Market
 MF activities across the state. But, only eastern
parts good for entry.
 Industry still in growth phase
 Strong presence of regional players
 MajorPlayers – SKS, Share/Asmita, Cashpor,
Sonata,Ujjivan
 Small Players – Satin,Mimo, NEED,Nirman
Bharati,Margdarshak,Sathi,Samridhi,
 Problematic areas – Western U.P. & Central U.P.

14. Strategy forUttarPradesh
 Starting operations in adjoining areas of
Madhya Pradesh like Allahabad, Lalitpur,
Mirzapur, Jhansi etc.
 Monitoring from MP based locations in the
beginning.
 Looking for organic growth towards eastern
parts.

15. Human Resource Planning
• Requirement : (i)C.As: 350 , BMs: 75 during expansion
(ii)R.Ms: 12-15 during/after expansion
(iii) D.Ms : 2-3
• Sourcing Human resources : (A) Open Recruitment (B) Internal
Promotions
(i) Credit Assistants – D.Ms/HRs conducting recruitment tests (written test +
interview) in different parts of their divisions every week
(ii)Branch Managers – Promotions of C.As/direct recruitment.
- Promotion tests being conducted every month in every division by HR,DM,and
ZM.
- Direct recruitment of BMs – identified by DMs and HR. Finalised by ZM.
(iii) Regional Managers – promotions of B.Ms/direct recruitment
- Identified by DM/ZM in promotion tests and interview .Final interview at HO
- Direct recruitment at HO
(IV) Divisional Managers – promotions of R.Ms/direct recruitment
- Identified by DM/ZM and recommended by ZM for interview at HO
- Direct recruitment at HO

16. Spl. Guidelines forC.As’
Recruitment
 Age group : 18-26 yrs
 12th
pass
 No prior experience of MF sector. Avoid with local MFIs and
big players’ experience
 Wards of members to be avoided
 Not to take from blacklisted areas of the div.
 Having own bike and DL & RC.
 Ready to work in areas beyond 150 KMs from home.
 Physically fit, good communication, inter-personal and
calculation skills.
 Maximum from rural areas.
 Following the company’s recruitment guidelines.

17. Training
A. C.As’ Training
(i) Exposure training – First-hand learning, orientation,
daily routine, center-register filling, application forms,
Do’s n Don’ts . In branches for 20 days
(ii) In-house training - Concept, process, calculation,
exercises, reports, expectations etc. One week in
D.O.
(iii)Test of Understanding – at DO.
(iv)Placement – Independent handling of centers in the
branches for 15 days before final placement in the
same old branch.

18. Training
B. B.Ms’ Training
(i) Exposure Training – first-hand knowledge of BM’s roles and
responsibilities, daily works reports preparation,
accounts/book/record keeping. 10 days in a branch .
(ii) In-house training -Concept, process, calculation, exercises,
reports, expectations etc. 10 days. In D.O.
(iii) HOtraining
(iv) Dummy placement – independent branch handling for 15
days.
(v) Test of understanding – at HO
(vi) Final Placement – in new branches.

19. Survey
A. DEMOGRAPHY:
1.Total population, Sex Ratio and Population Density
2. Level of poverty
3.Concentration of population. Pockets of high concentration.
(Particularly potential clients)
4.Important link roads and no. of villages along those roads.
No. of House Holds (HHs) of those villages.
5.Percentage of potential clients of total population
6.Social structure in terms of religion/caste. What percentage
Hindu/Muslims/others. Family types.
7.Culture/habits. This hints at spending/saving pattern.

20. Survey ……
B. INCOME :
1.Main Source of Income
2.Secondary sources of income
3.Regularity/irregularity of income
4.Range of family income
5.No. of earning members in the family
C. NEEDS:
1.Centrality of credit needs to the clients
2.What are people's perceived needs?
3. Need of aspiration (Do they aspire for higher life styles/to send
their children to schools/to own a pucca house,white goods
etc.?)

21. Survey…..
D.COMPETITORANALYSIS/SECTORANALYSIS
1.Who are other players?
2.What fee they charge?
3.What are their strategies? Competitors assumptions/current
strategies/future plans, objectives/capabilities and comparison with
ours.
4.Problems faced by them- problematic areas/slums, recovery
problems, staff, problems, political/administrative, threatening,
coercion. How did they overcome their problems?
5.External Environment Analysis of the area for MF.
7.SWOT Analysis.
6. Do we have any Competitive/comparative advantage over others in
the area?

22. Survey…..
E. CITY MAPPING (forlocation of the branch)
1.Law and order condition
2.Supply of electricity- erratic/non-erratic?
3.Political/administration's interferences
4.Internet facility/Telecom services
5.Banks - pvt. n public?
6.Normal working hours - till what time people generally work?
Whether shops remain open or not till 9 PM?
7.Medical facilities
8.Availability of diesel/petrol
9.Transportation/accessability from main cities

23. Activity chart
Activity Who will Do Time Period Remarks
Survey RM-DM 3-4 Days
1st
Phase - by 10 Dec
2nd
Phase – by 1 Jan
3rd
Phase – 26 Jan
RM’s will carry out survey in
potential locations accompanied
by DM’s. Based on the survey
report decision to open branches
will be taken by DM, ZM
Recruitment RM-DM-HR Every Week Recruitment to be done every
week from different locations
Training
• Field Placement
•In house training
• HO training
RM-DM-ZM-HO 1 month Staff will be first exposed to field
after which they will be groomed
on conceptual aspects through
classroom training sessions to
be organized at DO. Promoted
BM’s will also be sent to HO for
further training and better
exposure
Administrative
(Branch Location,
Certificates, Furniture,
Stock, Bank A/c etc.)
RM-DM 10 Days
(10 days before formal
announcement )
These activities will be carried
out on final approval for opening
branches in a particular location
by ZM, DM

24. THANK YOU!!