Kerala Financial Corp records record portfolio
Kerala Financial Corporation recorded a record portfolio of ₹ 4,700 crore for the year ending March 31, 2021, provisional figures for which the size increased by ₹ 1,349 from the previous year’s ₹ 3,351 crore with the company . building on a significant increase in loan approvals and repayments.
Tomin J Thachankari, Chairman and CEO (CMD), said 2020-2021 saw loan approvals alone worth ₹ 4,139 crore. This is a 244% improvement over the ₹ 1,659 crore of the previous year. Loan disbursements also kept pace and increased 258% to ₹ 3,729 crore from ₹ 1,447 crore.
The base loan interest rate is reduced to eight percent since the Company has been able to raise funds for as little as 6.5 percent. Tomin Thachankari said the Company expects better net profit than the previous year due to the better performance and lower costs.
Best expected net profit
Thanks to its high solvency ratio and low NPA, the Company had, on January 1, 2021, reduced the base rate from 9% to 8%. It also took advantage of the lower cost of funds. In this way, concessions received due to better performance were passed on to customers.
The Company has decided to adopt Finacle, one of the leading core banking software, given its growth and the technical requirements of future projects. Finacle will be operational soon, Thachankari said. The Company is also introducing debit cards in conjunction with public sector banks.
These debit cards can be used to process all business like all regular debit cards, including at ATMs, point-of-sale vending machines and for online and mobile app-related transactions. business to conduct high volume transactions. This is the first time in the state that a government institution has launched debit cards.
Finacle adopted, debit cards soon
The company’s website has been revamped and all loan applications are now accepted online. A high-speed personal Internet and videoconferencing system has been set up in the branches. This has sped up overall procedures and communication between branches and head office. Refunds to special plans are now made daily or weekly for convenience for which point of sale and Google Pay are used.
Even during the pandemic crisis, refunds increased 262% from ₹ 1,082 crore to ₹ 2,833 crore. Interest income rose 131% to ₹ 436 crore (₹ 334 crore). This was facilitated in part by sharing information on defaulters with CIBIL and tightening collection procedures, he added.
Sharing of defaulter data
There has been a significant increase in reimbursements after the sharing of defaults information. About 24,000 recordings have been downloaded so far, said Tomin Thachankari. Among state government financial institutions, Kerala Financial Corporation is the first to share defaulter data in this way. The data is also shared with other credit bureaus like Equifax, Experian, and CRIF Highmark.
The Company has taken a gentle approach to customers who are struggling with the pandemic. Yet he acted strictly with those who deliberately defaulted on their repayments. SARFAESI procedures have been accelerated and resolution officers have been recruited for this purpose. The acquired units are put up for sale by electronic auction and a special loan system has been set up for buyers.
The goal is a complete overhaul
“Our goal for the year was a complete overhaul of the company. More than just a financial institution, we have transformed it into an institution that offers personalized loans and exemplary services to a variety of industries, ”said Thachankari. The centralization of the credit process and the ability for clients to interact directly with senior officials, including the CMD, have helped.
The Company has recruited more agencies for client verification, project report preparation and technical evaluation in order to expedite loan processing. New loan proposals are directly analyzed by head office managers in the presence of customers, said Tomin Thachankari.
Various loan programs
The company has sanctioned new loans of ₹ 256 crore to 419 industries struggling with the Covid-19 crisis. In addition, 1,937 new businesses received assistance under the Entrepreneurship Development Program. Loans of up to 1 lakh have been granted under this program without any collateral.
It has also introduced various assistance schemes without any warranty requirement. This included programs for startups, loans for electric vehicles, loans for converting buses to CNG, special loans of up to 50 lakh to hotels, and the ability to lower bills for government contractors.
Another is a special loan program for units affected by the pandemic. Loans in the amount of ₹ 256 crore were sanctioned for 419 existing and new businesses under the scheme. He granted a moratorium to all units during the lockdown. Special programs are available for units engaged in the manufacture of masks and disinfectants.
The entrepreneurship development program itself has enabled 1,937 new businesses to benefit from assistance. Loans of up to 1 lakh were given to them without any collateral under which particular preference was given to women and people with disabilities, the CMD said.
Loans of up to 50 lakh were offered at 7% on concessional terms. For non-residents returning home after losing their jobs due to the pandemic, the program was offered at an interest rate of 4% in association with the relevant department (NORKA).
Credit approvals for start-ups
Credit approvals were issued to 10 new startups during the year without any collateral collateral. A new program offered to fund up to 80% of the work order received by startups up to a maximum of ₹ 10 crore at an attractive rate of 10%. Likewise, the Company provides up to ₹ 1 crore for the expansion of innovative prototypes in accordance with the development goals of the state government.
A special bill discount system has been extended to government contractors to discount their bills without any guarantees. The Company also provides unsecured loans for the conversion of buses to CNG and for the purchase of electric vehicles. Special loans of up to 50 lakh have been introduced to revive the tourism sector. These loans are given to hotels on an unsecured daily repayment basis.
The bonds are rated AA
The Company issued ₹ 250 crore bonds during the year at the all-time best rate any state financial institution has managed so far, the CMD said. The solid financial base has enabled it to obtain better rates than even the big public sector banks. Obligations rated “AA” have a term of 10 years.
To control expenses, strict controls have been put in place and all payments are now made directly from the head office. Avoidable high-cost phone and Internet connections are now disconnected. Old vehicles have been auctioned off and vehicles are now rented for office use. These measures have helped reduce operational costs by 10%, Thachankari said.
More women have been appointed to key positions to promote the mission of empowering women. The Company also launched a platform for its employees to interact with business leaders to improve industry knowledge. Among the notable business leaders featured are MA Yusuf Ali, Ravi Pillai, Azad Moopan, and Kochouseph Chittilappilly.