Understanding the Vulnerabilities of Corona Outbreak Impact of - - PowerPoint PPT Presentation

Understanding the Vulnerabilities of Corona Outbreak

Impact of Covid Outbreak followed by Country wide Lockdown on Microfinance Customers of Annapurna Finance

Introducing Annapurna

Annapurna is one of the Top 10 NBFC MFIs in India 99% of Annapurna Customers are Women 85% of Annapurna’s customers are from Rural area The Dominant mode of lending is Group Lending, which is more than 85% of the Portfolio

Journey of Annapurna Finance

Operational Highlights

17 States es ₹ 4045 CR GL GLP 5942 5942 Staffs 718 Branches es 1.9 1.9 mn mn Clien ents

Study Background

Understand the impact of Covid on customers from different states and Covid zones as decided by government Recognize the impact on customers from different livelihood Identify the difference in the condition from the first study conducted three weeks back Get an idea about feasibility

• f business continuity given

the change in customers’ condition

Objecti Objective

Descriptive study Data Type: Both Qualitative and Quantitative, mostly closed ended questions Mode of Data Collection: Telephonic Interview Area Selection: Based on Annapurna’s Penetration and impact of Corona

• utbreak.

Area Wise Respondent Selection: Random

Re Research Methods Methods

Deep Diving in the Study Focus

Green 49% Orange 32% Red 19%

Zone wise Distrib Zone wise Distribution of ution of R Respondents espondents

Total Respondents

3739 3739

Major Res esponse e Ar Area eas

How the income has been influenced How long the customers can sustain in this uncertain situation How long the customers expects will take to come back to normalcy regarding income generation

Ad Additional Res esponse e Ar Area eas

What are the coping mechanisms taken by the customers What are their biggest pain points What is the basic prospect of loan recovery on the field

Major Customer er Segmen ents we e are e Inter eres ested ed in

Geography wise Segmentation § State and § Covid Zone Livelihood wise Segmentation

Respondents are Representative

• f Annapurna

Portfolio

Male respondents are spouses who

• wn the phone

88% 88%

Women en

94% 94%

Rural Dwel eller er

60% 60%

Engaged ed in Ag Agriculture

After Agriculture, highly practiced activities are Construction and Service Sector

56% 56% of the respondents have

• nly one income generating

activity

Highlights of the Study: Impact on Income

66% 66% of respondents have high impact on income i.e. income is compromised by more than 50% 27% 27% has experience partial impact i.e. income has suffered by 20% to 40%

In most of the states, highly affected are more from the respondents with single income generating channel

94% 94% respondents from Red Zone and 95% 95% from Orange zone had their income hit highly or

partially compared to 90%

90% of Green Zone respondents

Sectors highly affected by Covid Outbreak are dominated by Wage Labours

• In agriculture, construction and manufacturing sector more than 95% respondents are partially of

highly affected Sectors like livestock, small business and service have recorded comparatively lower impact on the income of respondents

Highlights of the Study: Sustenance Capacity

80% 80% of respondents can manage their expenses in current condition for 2 months 45% 45% can sustain only one month

Sustenance capability is higher in Red zone as 26%

26% can survive beyond three months compared

to 17%

17% in Orange zone and 20% 20% in Green Zone

Sustenance capability is lowest for wage labours engaged in Agriculture and Construction, around

50% 50% respondents can sustain only for a month

Sectors like livestock, small business and manufacturing have high sustenance level as more than

20% 20% can manage more than 3 month in current situation, because of dominance od self

employed people and expected relaxation during lockdown

Highlights of the Study: Resillience Perception

55% 55% of respondents thinks their income generation will be restored within 2 months after

relaxations are allowed

19% 19% thinks they will recover within a month, among this 20% 20% are from Green Zone

Red Zone respondents found more optimistic as 57%

57% has responded that the situation can be

restored within 2 months from relaxation given by government Wage labours from Construction, Manufacturing and Agriculture are most uncertain about the restoration, causing more than 40%

40% respondent from the section mentioning they need more

than 3 months to get back to normal

Findings related to Post Relaxation Challenges

Repaymen ent Capacity

72% of the respondents from Assam has repaid during lockdown and 88% of the respondents from the state doesn’t want moratorium In Jharkhand more than 80% respondents aren’t favouring moratorium

Rever erse e Migration in in Fam amil ily

More than 10% respondents in four states (Bihar, Jharkhand, Odisha and West Bengal) are exposed to this challenge

Not a Not at all t all 37% 37% Completel Completely 4% 4% Pa Partially 59% 59%

Livel elihood Res estarted ed after er Rel elaxation

In Assam and Maharashtra more than 70% cases the livelihood hasn’t restored at all

Yes, 6% Yes, 69%

No, 94% No, 31% Repaid during Lockdown Finds Moratorium Useful No No 93% 93% Ye Yes 7% 7%

Best Strategy

57% 57% 23% 23% 10% 10% 2% 2% 5% 5%

Second Best Strategy

0% 0% 27% 27% 38% 38% 18% 18% 6% 6%

Limit mobile recharge Seek Community and government support

Using personal savings to meet the expense

Monetary help from

• thers

Coping Mechanism by Customers

Reduce household consumption

Per ercen entage of

• f res

esponden ents ma marking ng it it as as To Top an and Sec econd To Top co copi ping st stra rategy gy

Getting back to Work Paying Debt Instalments

Food and Essential Supplies

Lack of Cash

Biggest Worries of Customers

Getting ill with Corona

50% 18% 25% 2% 1.5%

Per ercen entage of

• f res

esponden ents ma marking ng it it as as To Top Mo Most Pa Pain Po Point

Difference between previous and Current Study of Customers about Lockdown Effect

Timeline Study Coverage Highly Affected Partially Affected Respondents can sustain a Month at max Wants to avail Moratorium Facility

Lockdown 1.0 Lockdown 3.0 States: 7 Customers: 1007 States: 11 Customers: 3739 55% 66% 44% 27% 61% 45% 77% 69% Lockdown 1.0 Study Lockdown 3.0 Study

Annapurna’s three-pronged Approach to the Crisis Management

Intervention towards Cashless Business

Sensitization and Awareness Generation

Intervention for Product Designing

Sensitization and Awareness Need Based Product Designing

Sensitizing Customers about Corona and Preventive Measures through Phone Call Distribution of Sanitizer and Mask Covering 10000 Household Sensitization Material for both Customers and Employees

Ne New P w Prod

• duc

uct P t Planni nning ng

To kickstart the livelihood of existing customers Loan Type: e: Digital Emergency Loan Product Devel elopmen ent Phase Market Research ongoing

Need eed Based ed Moratorium

To avoid additional financial pressure on customer Customers are being made aware of the Moratorium Moratorium period as per individual customer need

Scope of Digital Transaction

Account wise VPA activated QR Code is displayed on website QR Code based Payment Payment through POS Machine Staff Assisted process To be online shortly Micro ATM Integrated with ICICI Bank Linked with Website OTP based login through registered mobile number Currently working for MSME Customers Online Payment Portal 100% disbursement of Annapurna is

• nline, money directly goes to customers’

bank account Online Disbursement Currently integration in process Integration with Bharat Bill Payment Scheme Bio Metric Process Already being piloted in Haryana Aadhar Enabled Payment

₹ ₹