#1CreditAccess Grameen CreditAccess Grameen Limited Q4 & FY23 Investor Presentation May 2023 STOOD THE TEST OF TIME AND TRUST#2Disclaimer CreditAccess Ⓡ Grameen By accessing this presentation, you agree to be bound by the following terms and conditions. This presentation (which may reflect some price sensitive information in terms of SEBI regulations and Companies Act, 2013, as amended from time to time) has been prepared by CreditAccess Grameen Limited (the "Company"). The Company may alter, modify or otherwise change in any manner the contents of this presentation, without obligation to notify any persons of such change or changes. This presentation may contain certain "forward looking statements". These statements include descriptions regarding the intent, belief or current expectations of the Company or its management and information currently available with its management, including with respect to the results of operations and the financial condition of the company. 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By accessing this presentation, you accept that this disclaimer and any claims arising out of the use of the information from this presentation shall be governed by the laws of India and only the courts in Bangalore, and no other courts shall have jurisdiction over the same. www.creditaccessgrameen.in 2#3Discussion Summary CreditAccess Grameen Key Business Updates Financial Results Overview Investment Rationale www.creditaccessgrameen.in 000 Ⓡ 3#4FY23: Historic Year! Scaling New Heights! Setting New Benchmarks ✓ First Pure-play MFI To Cross INR 20,000 Crore Portfolio Mark ✓ Credit Rating Upgrade From ICRA And Ind-Ra To AA- (Stable), Highest Rating For Standalone MFI ✓ Maiden Public NCD Issue Worth INR 500 Crore CreditAccess Grameen Ⓡ ✓ First-of It's Kind USD 35 Million Direct Funding From DFC (USA) ✓ Completion Of Legal Merger With Madura Micro Finance ✓ Featured In The Top Five Of Fortune India Next 500 List ✓ "Great Place To Work" Certification And Ranked Amongst The Top 30 BFSI Companies For The 4th Consecutive Year ✓ ESG Rating From Sustainalytics And S&P Global www.creditaccessgrameen.in 4#5Q4 FY23: Key Business Highlights Robust Business Momentum, Strong Operating Profitability, And Best In Class Asset Quality CreditAccess Ⓡ Grameen Q4 FY23 YOY% Change QoQ% Change Q4 FY23 YoY% Change QoQ% Change GLP (INR Cr) 21,031 +26.7% +18.2% NII (INR Cr) 690 +32.7% +21.8% CA Grameen 17,561 +27.9% +18.5% PPOP (INR Cr) 503 +36.3% +32.5% MMFL 3,470 +21.0% +17.1% PAT (INR Cr) 297 +86.4% +37.4% Write-off 102 0.6% of Dec-22 GLP NIM % 12.2% +90 bps +30 bps Borrowers (Lakh) 42.64 +11.5% +8.3% ROA % 5.5% +187 bps +95 bps CA Grameen 34.13 +16.8% +9.1% ROE % 24.0% +836 bps +555 bps MMFL 8.75 -5.9% +4.8% Liquidity (INR Cr) Write-off 0.45 1.2% of Dec-22 Borrowers Capital Total Tier 1 Cash & Cash Equivalents 1,891 Disbursements (INR Cr) 7,171 +23.8% +47.9% Undrawn Sanctions 4,675 CA Grameen 5,993 +28.9% +48.2% CRAR % 23.6% 22.7% Sanctions in Pipeline 3,900 MMFL 1,178 +3.0% +46.6% Q4 FY23 Collections Efficiency (Excl. Arrears) 98.2% Highest quarterly disbursements 98.4% Q4 FY23 Collections Efficiency (Incl. Arrears) GNPA % (largely @ 60+ dpd) 1.21% ECL Provisioning 1.78% NNPA % 0.42% Highest ever quarterly profitability PAR 90+% 0.96% 1) Excluding 23,297 common borrowers Highest quarterly customer additions of ~5.5 Lakh Normalised collection efficiency Best-in-class asset quality Strong balance sheet, adequate capital and liquidity position Added 71 branches in new markets for future growth www.creditaccessgrameen.in 5#6Q4 FY23: Strong New Customer Addition Momentum Robust New Borrower Addition over Past 12 Months, partially offset by Write-offs CreditAccess Ⓡ Grameen CA Grameen Pre-Write-off Borrower Growth of 21.1% Borrowers ('000) New Borrower Addition over past 12 Months Total % Share 124- 995 379 Karnataka 2,26,531 18.4% Maharashtra 2,09,963 17.1% 3,413 2,922 Tamil Nadu 2,32,827 18.9% Other States 5,61,768 45.6% Q4 FY22 Addition Write-off Attrition Q4 FY23 Total 12,31,089 Q1 FY23 92,642 Sustained new MMFL Borrowers ('000) Pre-Write-off Borrower Growth of 17.1% Q2 FY23 2,84,848 borrower addition momentum in Q3 FY23 3,05,387 Q4 FY23 237 215 Q4 FY23 5,48,212 930 77 875 Q4 FY22 Addition Write-off Attrition Q4 FY23 45.6% of the new borrower addition over the past 12 months was from outside of the top 3 states www.creditaccessgrameen.in 6#72 Q4 FY23: Superior Vintage Profile with High Borrower Retention CreditAccess Ⓡ Supporting the Retained / Higher Vintage Borrowers, whilst consciously Adding New Borrowers with Deep Rural Focus Borrower Vintage Analysis Grameen CA Grameen MMFL 3 Q4 FY23 48% 34% 18% Q4 FY23 45% 43% 12% Focus on 3-Year Loans for High Vintage Borrowers Q3 FY23 49% 31% 20% Q3 FY23 43% 44% 12% Q2 FY23 46% 33% 21% Q2 FY23 47% 41% 12% Loan Tenure Q1 FY23 45% 34% 20% Q1 FY23 51% 36% 13% 1 Year Q4 FY22 47% 34% 19% Q4 FY22 63% 29% 8% 2 Years Avg. Weekly Installment per INR 10,000 loan INR 217 219 INR 118 120 ■ <3 years 3-6 Years ■> 6 Years < 3 years 3-6 Years ■> 6 Years 3 years INR 86 - 88 Borrower Leverage Analysis GLP / Borrower Vintage-wise < 3 Years CA Grameen MMFL Q4 FY22 38,038 Q4 FY23 40,463 6.4% YOY% GLP / Borrower Vintage-wise Q4 FY22 <3 Years 3-6 Years > 6 Years Total 48,896 55,925 14.4% 3-6 Years 65,555 71,661 9.3% > 6 Years 47,002 51,457 9.5% Total Q4 FY23 30,071 39,339 30.8% 31,768 39,744 25.1% 32,086 40,623 26.6% 30,838 39,667 28.6% YOY% Within Acceptable 10-15% Annual Increase, Despite the Impact of Higher Write-offs Ticket size increase due to gradual alignment with CA Grameen model www.creditaccessgrameen.in The average GLP per borrower in the top 3 states is INR 54,000 and in other states is INR 39,400 ~ Graduated customers seeking > INR 60,000 loan are offered 3-year tenure loans, leading to lower instalment size and improved serviceability 29% of consolidated group loans GLP is constituted of 3-year loans 7#8Q4 FY23: Continued Improvement in Asset Quality CA Grameen Collection Efficiency (excl. arrears) 98% 98% MMFL Collection Efficiency (excl. arrears) 98% 99% 95% 96% CreditAccess Ⓡ Grameen Consolidated Collection Efficiency (excl. arrears) 97% 97% 98% 98% 98% 98% Q3 FY23 ■CE% (excl. arrears) Q4 FY23 ■CE% (incl. arrears) Q3 FY23 ■CE% (excl. arrears) Q4 FY23 ■CE% (incl. arrears) Q3 FY23 CE% (excl. arrears) Q4 FY23 ■CE% (incl. arrears) PAR Trend PAR Trend PAR Trend 4.3% 1.8% 2.8% 2.2% 3.2% 1.5% 1.2% 1.6% 2.2% 1.8% 1.1% 2.6% 1.2% 1.4% 1.9% 1.6% 0.9% 1.1% 2.1% 1.6% 1.2% 0.8% 1.3% 1.0% Dec-22 Mar-23 Dec-22 Mar-23 Dec-22 Mar-23 PAR O PAR 30 PAR 60 PAR 90 PAR O PAR 30 PAR 60 PAR 90 PAR O PAR 30 PAR 60 - PAR 90 Q4 FY23 (INR Cr) Consolidated Asset Classification (dpd) EAD Stage 1 0 15 (GL), 0-30 (RF) 19,286.8 EAD% 98.6% Stage 2 16 60 (GL), 31 - 90 (RF) 43.7 0.2% Stage 3 60+ (GL), 90+ (RF) 236.8 1.2% Total 19,567.3 100.0% ECL% 0.9% 48.1% 65.7% 1.8% Management overlay of INR 13.8 Cr (included in Stage 1 ECL) set aside against the GNPA (Gross Stage 3) 1.21% legacy MMFL book of INR 131 Cr, which now only accounts for only 0.6% of overall GLP 0.42% NNPA (Net Stage 3) EAD: Exposure at default = on-balance sheet loan principal + interest www.creditaccessgrameen.in 8#9Q4 FY23: Comfortably Placed to Protect NIMs Key Metrics CreditAccess Grameen Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 FY23 Avg. New Disbursement Interest Rate % 20.3% 20.8% 21.5% 21.9% 21.3% Portfolio Yield % 18.4% 19.1% 19.6% 19.7% 18.9% Weighted Avg. Cost of Borrowing % 9.1% 9.2% 9.6% 9.5% 9.4% Marginal Cost of Borrowing % NIM % 8.7% 8.9% 10.2% 9.4% 9.4% 11.1% 12.0% 11.9% 12.2% 11.6% www.creditaccessgrameen.in 9 Ⓡ#10Q4 FY23: Performance in line with Annual Guidance Key Indicators GLP Growth % FY23 Guidance Q4 FY23 Performance CreditAccess Grameen FY23 Performance 24.0% 25.0% 26.7% 26.7% Credit Cost (Provisions + Write-offs) - % of Avg. On-Book Loan Portfolio (non annualized) 1.8% -2.0% (revised to 2.3% - 2.4%) 0.6% (gross credit cost) 0.5% (net credit cost post bad debt recovery) 2.4% (gross credit cost) 2.1% (net credit cost post bad debt recovery) Return on Assets % 4.0% -4.2% 5.5% 4.2% Return on Equity % - 16.0% 18.0% 24.0% 18.0% www.creditaccessgrameen.in 10 Ⓡ#11Consistent Delivery Of Best-In-Class Cross Cycle Return Metrics Cross-Cycle ROA (%) Strong Cross Cycle Performance Despite Several Crisis 2.3% 5.1% 5.0% FY17-FY18 Demonetisation, UP farm loan waiver FY19 Floods, NBFC crisis 4.2% 3.6% Avg: 3.3% 0.9% 2.2% 12.3% 22.2% Cross-Cycle ROE (%) FY21 Covid Wave 1 CreditAccess Ⓡ Grameen FY22 Covid Wave 2 18.0% 16.3% Avg: 13.5% 12.9% 4.0% 9.0% FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY17 FY18 FY19 FY20 FY21 FY22 FY23 www.creditaccessgrameen.in 11#12FY24 Performance Guidance: Key Indicators Key Indicators GLP Growth % NIM % Cost-to-Income Ratio % FY24 Guidance 24.0% 25.0% 12.0% 12.2% 35% - 36% Credit Cost (Provisions + Write-offs) - 1.6% 1.8% % of Avg. On-Book Loan Portfolio (non annualized) Return on Assets % 4.7% -4.9% Return on Equity % Note: The guidance provided considers a stable operating environment www.creditaccessgrameen.in 20.0% 21.0% CreditAccess Ⓡ Grameen 12#13Discussion Summary Key Business Updates Financial Results Overview Investment Rationale CreditAccess Ⓡ Grameen www.creditaccessgrameen.in 13#14Q4 FY23: Key Performance Highlights CreditAccess Grameen GLP: INR 21,031 Cr (+26.7% YoY) NIM 12.2% Weighted Avg. COB 9.5% Cost/Income Ratio 30.2% Opex/GLP Ratio 4.5% PPOP INR 503 Cr (+36.3% YoY) ROA 5.5% Capital Adequacy Ratio 23.6% Total Equity INR 5,107 Cr PAT: INR 297 Cr (+86.4% YoY) ROE 24.0% Tier 1 Ratio 22.7% D/E Ratio 3.2 GNPA (GS3): 1.21% Provisioning 1.78% NNPA: 0.42% PAR 90+: 0.96% Write-off INR 102 Cr Branches 1,786 (+9.2% YoY) 16,759 Employees (+7.0% YoY) Active Borrowers 42.64 Lakh (+11.5% YoY) www.creditaccessgrameen.in 14 Ⓡ#15Q4 & FY23: P&L Statement CreditAccess Grameen Profit & Loss Statement (INR Cr) Q4 FY23 Q4 FY22 YoY% Q3 FY23 QoQ% FY23 FY22 YOY% Interest Income 964.8 728.5 32.4% 854.8 12.9% 3,327.1 2,567.3 29.6% 1 - Interest on Loans 950.1 721.1 31.8% 837.6 13.4% 3,277.4 2,533.0 29.4% - Income from Securitisation 0.1 0.6 0.0 0.1 0.6 - Interest on Deposits with Banks and Fls 14.6 6.8 114.5% 17.2 -14.7% 49.7 33.7 47.3% Income from Direct Assignment 70.6 58.3 21.1% 25.9 172.6% 119.7 70.0 71.0% Finance Cost on Borrowings 345.6 267.2 29.4% 314.2 10.0% 1,212.9 984.1 23.3% Cost on Financial Liability towards Securitisation 0.0 0.0 0.0 0.0 0.2 Net Interest Income 689.8 519.6 32.7% 566.5 21.8% 2,234.0 1,653.1 35.1% 2 Non-interest Income & Other Income 30.8 37.7 -18.2% 29.0 6.3% 104.0 112.8 -7.8% Total Net Income 720.6 557.3 29.3% 595.5 21.0% 2,337.9 1,765.9 32.4% Employee Expenses 134.5 112.2 19.8% 127.1 5.8% 515.2 437.6 17.7% Other Expenses 70.7 63.8 10.9% 76.3 -7.3% 266.4 203.5 30.9% Depreciation, Amortisation & Impairment 12.5 12.5 0.2% 12.6 -0.9% 49.8 47.2 5.5% Pre-Provision Operating Profit 502.9 368.8 36.3% 379.5 32.5% 1,506.2 1,077.5 39.8% Impairment of Financial Instruments 105.3 151.0 -30.3% 89.4 17.8% 401.0 596.7 -32.8% Profit Before Tax Total Tax Expense Profit After Tax Key Ratios Portfolio Yield Cost of Borrowings NIM Cost/Income Ratio 397.6 217.8 82.5% 290.0 37.1% 1,105.4 480.8 129.9% 101.0 58.7 72.0% 74.3 36.0% 279.4 127.7 118.7% 296.6 159.1 86.4% Q4 FY23 Q4 FY22 215.8 Q3 FY23 37.5% 826.1 353.1 134.0% FY23 FY22 19.7% 18.5% 19.6% 18.9% 18.3% 9.5% 8.9% 9.6% 9.4% 9.3% 12.2% 11.3% 11.9% 11.6% 10.9% Opex/GLP Ratio 30.2% 4.5% 33.8% 36.3% 35.6% 39.0% 4.8% 5.0% 4.7% 4.9% 1) Interest income (on Stage 3 portfolio) de-recognized was INR 16.3 Cr in Q4 FY23 (vs INR 30.8 Cr in Q4 FY22) and INR 80.9 Cr in FY23 (vs INR 95.1 Cr in FY22) 2) Bad debt recovery was INR 16.8 Cr in Q4 FY23 (vs INR 26.5 Cr in Q4 FY22) and INR 58.1 Cr in FY23 (vs INR 74.1 Cr in FY22) www.creditaccessgrameen.in 15 Ⓡ#16Q4 & FY23: Balance Sheet Balance Sheet (INR Cr) Cash & Other Bank Balances Investments - Loans (Net of Impairment Loss Allowance) Loans Securitised Assets Property, Plant and Equipment Intangible Assets Right to Use Assets Other Financial & Non-Financial Assets Goodwill Total Assets CreditAccess Grameen Ⓡ Q4 FY23 Q4 FY22 YOY% Q3 FY23 QoQ% FY23 1,436.4 454.5 1,761.4 0.5 -18.4% 1,001.2 43.5% 438.3 3.7% 1,436.4 454.5 FY22 1,761.4 0.5 18,939.8 14,765.3 28.3% 16,402.3 15.5% 18,939.8 14,765.3 103.6 0.0 0.0 103.6 0.0 32.1 31.8 0.9% 30.7 4.5% 32.1 31.8 130.5 149.7 -12.9% 134.7 -3.1% 130.5 149.7 64.7 74.8 -13.4% 67.3 -3.8% 64.7 74.8 320.8 322.7 0.3% 313.4 2.4% 320.8 322.7 375.7 375.7 375.7 375.7 21,858.1 17,482.0 25.0% 18,763.6 16.5% 21,858.1 375.7 17,482.0 Debt Securities 1,672.3 1,418.1 17.9% 1,839.2 -9.1% 1,672.3 1,418.1 Borrowings (other than debt securities) 14,463.2 11,424.9 26.6% 11,650.9 24.1% 14,463.2 11,424.9 Subordinated Liabilities 77.9 77.7 0.2% 83.4 -6.6% 77.9 77.7 Financial Liability towards Portfolio Securitized 98.8 0.0 0.0 98.8 0.0 Lease Liabilities 78.9 87.4 -9.8% 80.4 -1.9% 78.9 87.4 Other Financial & Non-financial Liabilities 360.0 306.9 17.3% 315.1 14.3% 360.0 306.9 Total Equity 5,107.0 4,166.9 22.6% 4,794.6 6.5% 5,107.0 4,166.9 Total Liabilities and Equity 21,858.1 17,482.0 25.0% 18,763.6 16.5% 21,858.1 17,482.0 Key Ratios Q4 FY23 Q4 FY22 Q3 FY23 FY23 FY22 ROA 5.5% 3.6% 4.5% 4.2% 2.2% D/E 3.2 3.1 2.8 3.2 3.1 ROE 24.0% 15.6% 18.4% 18.0% 9.0% GNPA (GL: 60+ dpd, RF: 90+ dpd) 1.21% 3.61% 1.71% 1.21% 3.61% Provisioning 1.78% 3.44% 2.04% 1.78% 3.44% www.creditaccessgrameen.in 16#17Q4 & FY23: Understanding the Credit Cost Impact Consolidated (INR Cr) Opening ECL(A) Additions (B) Consolidated Q4 FY23 FY23 344.6 533.9 - Provisions as per ECL 57.4 194.2 Management Overlay on MMFL's legacy book 13.8 13.8 Reversals (on account of write-off) (C) 68.0 394.1 Closing ECL (D = A+B-C) 347.8 347.8 Write-off (E) 102.1 587.0 Credit Cost (F = B-C+E) 105.3 401.0 Credit Cost (Provisions + Write-offs) - % of Avg. On-Book Loan Portfolio 0.6% 2.4% (non-annualised) Bad-Debt Recovery (G) 16.8 58.1 88.5 342.9 Net P&L Impact (F - G) Net P&L Impact - % of Avg. On-Book Loan Portfolio (non-annualised) www.creditaccessgrameen.in 0.5% 2.1% CreditAccess Grameen 17 Ⓡ#18Q4 FY23: Continued Business Traction with Rural Focus Gross Loan Portfolio (INR Cr) 26.7% 17,786 16,599 16,539 15,615 21,031 Borrowers ('000) 11.5% CreditAccess® 4,264 3,939 3,824 3,798 3,689 Grameen Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 www.creditaccessgrameen.in 18#19Q4 FY23: Consistent Growth in Infrastructure CreditAccess Grameen Ⓡ Q2 FY23 Q3 FY23 19 Q4 FY23 13 Branches 9.2% Branch Additions States Bihar Gujarat Q1 FY23 10 Chhattisgarh 2 5 1 1,635 1,681 1,684 1,727 1,786 Jharkhand 5 Madhya Pradesh 1 Karnataka Kerala Maharashtra Odisha Puducherry Rajasthan Tamil Nadu 9 -4 6457 46 2 3 26657 43 * 71 branches added, 12 branches closed (Kerala: 3, Tamil Nadu 9) Uttar Pradesh Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 West Bengal Total Employees Loan Officers 6.7% 11 1 3 0 1 0 17 9 8 8 59* 7.0% 16,807 15,667 15,642 16,018 16,759 11,453 11,490 10,770 10,556 10,826 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 www.creditaccessgrameen.in Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 19#205,792 Q4 FY23: Robust Quarterly Performance Trend (1/2) Disbursements (INR Cr) Total Income (INR Cr) CreditAccess Ⓡ Grameen 23.8% 1,066 910 7,171 824 814 761 4,847 4,375 2,146 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Margin Analysis (%) Operating Efficiency (%) 5.1% 18.5% 18.4% 19.1% 19.6% 19.7% 5.0% 4.8% 4.7% 4.5% 12.0% 11.9% 12.2% 11.3% 11.1% 39.7% 38.2% 33.8% 36.3% 30.2% 8.9% 9.1% 9.2% 9.6% 9.5% Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 -Portfolio Yield Cost of Borrowings NIM I Cost/Income Ratio Opex/GLP Ratio www.creditaccessgrameen.in 20 20#21Q4 FY23: Robust Quarterly Performance Trend (2/2) NII, PPOP, PAT (INR Cr) Asset Quality (%) CreditAccess Ⓡ Grameen 520 3.44% 690 566 516 462 3.01% 3.11% 2.71% 2.46% 2.04% 503 2.17% 1.78% 2.33% 369 290 334 216 379 297 1.71% 1.72% 1.21% 1.34% 159 139 175 0.96% Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 NII PPOP PAT GNPA (largely @ 60+ dpd) Provisioning (ECL) PAR 90+ Total Equity (INR Cr) & Debt/Equity Ratio Return Ratios & Capital Adequacy (%) 3.1 2.7 2.8 2.7 3.2 22.8% 24.7% 25.0% 24.7% 23.6% 24.0% 5,107 4,167 4,336 4,582 4,795 16.0% 13.0% 15.7% 18.4% 3.7% 3.1% 3.9% 4.5% 5.5% Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY22 Q1 FY23 Q4 FY23 Q2 FY23 Total Equity Q3 FY23 Debt/Equity Ratio Q4 FY23 -CRAR AROE ROA www.creditaccessgrameen.in 21#22Q4 FY23: Sustainable Operational Efficiency GLP/Branch (INR Cr) GLP / Loan Officer (INR Cr) CreditAccess Ⓡ Grameen 11.8 1.8 10.2 10.3 9.8 1.6 9.3 1.5 1.5 1.5 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Borrowers / Branch 2,339 2,195 2,256 2,281 2,388 355 349 Q4 FY23 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Borrowers / Loan Officer 371 351 344 IIII Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 www.creditaccessgrameen.in 22#23Q4 FY23: Product Range To Meet Diverse Customer Needs CreditAccess Grameen GLP- Product Mix Q4 FY22 (INR Cr) % of Total Q1 FY23 (INR Cr) % of Total Q2 FY23 Q3 FY23 Q4 FY23 (INR Cr) % of Total (INR Cr) % of Total (INR Cr) % of Total IGL 15,949 96% 14,937 96% 15,801 96% 17,054 96% 20,090 96% Family Welfare 38 0% 121 1% 185 1% 125 0.7% 67 0% Home Improvement 414 3% 408 2% 429 2% 486 3% 698 3% Emergency 3 0% 4 0% 7 0% 9 0% 9 0% Retail Finance 196 1% 145 1% 117 1% 113 0.6% 168 1% Total 16,599 100% 15,615 100% 16,539 100% 17,786 100% 21,031 100% GLP - Avg. O/S Per Loan (INR '000) IGL Family Welfare Home Improvement Emergency Retail Finance Total Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 32.1 30.3 30.0 31.1 34.2 3.7 9.4 11.0 7.7 4.7 10.0 9.7 9.4 9.3 10.8 0.6 0.8 0.5 0.5 0.6 47.2 48.8 48.0 51.2 86.9 29.8 28.1 27.4 28.1 30.6 GLP - Avg. O/S Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Per Borrower (INR '000) Total 43.4 42.3 43.5 45.2 49.3 www.creditaccessgrameen.in 23 Ⓡ#24Q4 FY23: Well-Diversified Presence Across India CreditAccess Grameen Our Presence as on Mar-23 14 States & 1 UT 352 Districts 1,786 Branches Branch Network Q4 FY23 % Share Q4 FY22 % Share Karnataka 311 17.4% 308 18.8% Maharashtra 301 16.9% 285 17.4% Uttar Pradesh Tamil Nadu 378 21.2% 382 23.4% 75 Madhya Pradesh 148 8.3% 140 8.6% Rajasthan Bihar 93 138 Other States & UT Total 648 36.2% 520 31.8% 1,786 100.0% 1,635 100.0% Gujarat 68 West Bengal Borrowers ('000) Q4 FY23 % Share Q3 FY23 % Share 40 Karnataka 1,121 26.3% 1,077 28.2% Madhya Pradesh Maharashtra 850 19.9% 792 Jharkhand 20.7% 148 45 Tamil Nadu 920 21.6% 911 23.8% Madhya Pradesh 326 7.6% 312 8.2% Maharashtra Chhattisgarh 301 Goa 2 48 Other States & UT Total 1,047 24.6% 731 19.1% 4,264 100.0% 3,824 100.0% Odisha 80 GLP (INR Cr) Q4 FY23 % Share Q3 FY23 % Share Karnataka 6,977 33.2% 5,964 35.9% Karnataka 311 Kerala 53 Puducherry Maharashtra 4,390 20.9% 3,568 21.5% 6 Tamil Nadu 4,250 20.2% 3,458 20.8% Madhya Pradesh 1,410 6.7% 1,224 7.4% Tamil Nadu 378 Other States & UT Total 4,004 19.0% 2,385 14.4% 21,031 100.0% 16,599 100.0% Exposure of Districts Q4 FY23 Q4 FY23 - Top Districts % of Total GLP (% of GLP) No. of Districts % of Total Districts < 0.5% 0.5% -1% 1% - 2% 2% -4% > 4% Total 290 82% Top 1 3% 38 11% Top 3 7% 20 6% Top 5 11% 4 1% Top 10 18% 0 0% 352 100% Other 82% www.creditaccessgrameen.in 24 Ⓡ#25Q4 FY23: Well-Diversified Liability Mix Liability Mix - Institution / Instrument Wise (%) Banks -TL 60.4% DA & Securitisation 9.3% Banks - NCD 1.2% NBFCs - TL 3.4% Fls - TL 8.5% MLD 0.9% Public NCD Sub Debt 0.4% Foreign - NCD 4.3% 2.8% Foreign - ECB 8.9% Note: O/S Direct Assignment (Sold Portion) - INR 1,551.7 Cr Short Term 9.4% CreditAccess Ⓡ Grameen Focus on dynamic liability management • Focus on long-term funding with strong diversification between domestic & foreign sources Target to meet funding requirements through foreign/long-term sources over the medium term, with diversified products Diverse lenders' base: • 45 Commercial Banks, 3 Financial Institutions, 8 Foreign Institutional Investors, 6 NBFCs Continued focus to minimize the cost of borrowing Cost of Borrowing (%) Liability Mix - Tenure Wise (%) 10.2% 8.9% 9.1% 8.4% 8.7% 9.2% 8.9% 9.6% 9.5% 9.4% Medium Term 23.8% Source % Mix Short Term Domestic 9.4% <= 1 year (incl. DA) Medium Term Long Term 66.8% Share of Foreign Borrowings at 14% > 1 year, < 2 years Long Term > 2 years Domestic 23.2% Foreign 0.6% Domestic 53.6% Foreign 13.2% Q4 FY22 Q1 FY23 Weighted Avg. COB Q2 FY23 Q3 FY23 Q4 FY23 Marginal COB www.creditaccessgrameen.in 25#26Q4 FY23: Stable Liquidity/ ALM Position/ Credit Ratings CreditAccess Ⓡ Grameen Static Liquidity / ALM Position For the Month Particulars (INR Cr) Apr-23 May-23 Jun-23 Opening Cash & Equivalents (A) 1,895.0 1,912.8 2,156.9 For the Financial Year FY24 FY25 2,282.6 Debt Diversification Total Drawdowns Q4 FY23 5,840 3,520.1 Domestic * 97% Loan recovery [Principal] (B) 878.0 1,022.5 Total Inflow (C=A+B) 2,772.9 2,935.3 982.9 3,139.7 10,997.6 13,280.2 6,899.3 10,419.5 Foreign 3% Undrawn Sanction 4,675 Borrowing Repayment [Principal] Domestic 75% Term loans and Others (D) 531.2 531.7 591.0 NCDs (E) 124.2 53.5 50.0 Direct Assignment (F) 204.8 193.2 216.1 7,193.1 603.5 1,963.4 4,830.7 553.6 Foreign 25% Total Outflow G=(D+E+F) 860.2 778.4 857.1 Closing Cash & equivalents (H= C-G) 1,912.8 2,156.9 2,282.6 9,760.0 3,520.1 420.3 5,804.5 4,615.0 Sanctions in Pipeline 3,900 Domestic 87% Foreign 13% Static Liquidity (B-G) 17.8 244.1 125.7 * Includes Direct Assignment of INR 937 Cr 1,237.5 1,094.8 Positive ALM Mismatch (in Months) Rating Instrument Rating Agency Rating/Grading Ind-Ra AA- (Stable) Bank Facilities 24.1 24.2 22.5 22.2 22.6 16.9 17.7 18.0 19.0 15.7 ICRA AA- (Stable) CRISIL A+ (Positive) Ind-Ra AA- (Stable) Non-Convertible Debentures ICRA AA- (Stable) CRISIL A+ (Positive) Commercial Paper ICRA Q4 FY22 Q1 FY23 Average Maturity of Assets Q2 FY23 Q3 FY23 Average Maturity of Liabilities Q4 FY23 Comprehensive Microfinance Grading * Client Protection Certification CRISIL A1+ M1C1 M-CRIL Gold Level Institutional Grading/Code of Conduct Assessment (COCA) www.creditaccessgrameen.in 26#27Discussion Summary Key Business Updates Financial Results Overview Investment Rationale CreditAccess Ⓡ Grameen www.creditaccessgrameen.in 27#28Committed to Basics Through Classical JLG Lending Model CreditAccess Ⓡ Grameen Microfinance loans are unsecured. JLG mechanism acts as security/loan collateral JLG Benefits: ✓ Strong group bonding ✓ Mutual support - both financial & emotional ✓ Guidance & grievance resolution ✓ Building awareness ✓ High quality customer - good behaviour & strong credit discipline Fully aligned with new harmonized guidelines in terms of - ✓ Formulation of Board approved policies ✓ Process modifications ✓ Underwriting changes ✓ Technology changes in Core Banking System ✓ Training to all the employees . . Group Formation Self-chosen group within 500m radius . Mutual . reliance Group: 5-10 members Kendra: 2-6 groups Digital process to capture KYC & household income Data Entry & CB Check Data entry into CBS at RPCs . KYC verification by RPCs Comprehensive OCB check for all earning family members JLG Mechanism allows Multiple Layers of Checks before and after disbursement of loan . Group Confirmation Kendra Meetings 3-days CGT by LO • Weekly/ Re-interview by BM • Loan Applications Loan Evaluation Loan Sanction & Disbursal Compulsory house visit Compulsory house visits GRT by AM, ad-hoc verifications, group approval Fortnightly meetings ⚫ Duration: 30- 45 mins • Act as early warning indicator New LA is captured in Tab Subject to group's approval, LA is accepted by the LO for further processing First loan IGL only Repayment capacity to be assessed on existing cash flows Household income assessment Loan sanction after complying with max 50% FOIR Group's re- confirmation Fund transfer to bank a/c ⚫ Passbook/ repayment schedule & pricing fact sheet Loan Repayment Choice of repayment frequency Collections updated online on Tab . • Loan Utilization LUC between 5-10 weeks Follow-up LUC in 11-15 weeks LUC recorded in passbook and LUC card details in Tab Note: CB: Credit Bureau, CBS: Core Banking System, RPC: Regional Processing Center, CGT: Compulsory Group Training, LO: Loan Officer, BM: Branch Manager, AM: Area Manager, LA: Loan Application, LUC: Loan Utilization Check www.creditaccessgrameen.in 28#29Focus on Customer Centricity, Loyalty & Retention CreditAccess Ⓡ "One of the Lowest Cost Organised Financer" - One Stop Shop providing Support to Various Lifecycle Needs of the Customer Grameen One of the lowest lending rates in MFI industry Loan Туре Customer Centric Products Purpose Ticket Size (INR) Tenure (months) Diverse product suite: Income generation, education, festival, medical, emergency, water, sanitation, home improvement, livelihood improvement, business expansion Group Income Generation Loan (IGL) Business Investments and Income Enhancement activities 5,000 - 1,00,000 12-36 Group Home Improvement Loan Water Connections, Sanitation and Home Improvement & Extensions - 5,000 50,000 12-36 Loan size flexibility: Ability to borrow as required within assigned credit limit Group Family Welfare Loan Festival, Medical, Education and Livelihood Improvement Up to 20,000 3-12 Ability to avail multiple loans with flexible size Group Emergency Loan Emergencies 1,000 3 Repayment flexibility: Weekly/bi-weekly/monthly repayment options Ability to choose repayment frequency based on cash flow cycle • No pre-payment penalty Retail Retail Finance Loan Finance Purchase of inventory, machine, assets or for making capital investment in business or business expansion Up to 20,00,000 6-180 88% borrower retention rate signaling high customer satisfaction Sustainable & Socially Relevant Significant growth from existing customer www.creditaccessgrameen.in Lower customer acquisition cost 29#30Calibrated Expansion Through Contiguous District-Based Approach CreditAccess Grameen Systematic geography selection based on availability of infrastructure, competition, historical performance trend, social/ economic/ political/ climate risk, growth potential Ensures consistent replication of processes/ controls Familiarity with demographics/ culture of nearby districts enables effective customer evaluation and better servicing Achieving deeper penetration within a particular district within three years of commencement of operations Gradual expansion into the next (typically adjoining) district Lower exposure to a particular district (99% of districts <=2% of GLP, No single district has > 4% of total GLP) www.creditaccessgrameen.in CA Grameen's contiguous district-based expansion Our presence - 2015 Districts New Districts added 64 2016 74 10 • 2017 96 22 2018 132 36 -2019 157 25 •2020 248 91 ⚫2021 265 17 2022 319 54 ⚫ 2023 352 33 30 Ⓡ#31Unique Human Capital, Internal Audit & Risk Controls CreditAccess Ⓡ Grameen Well-Established Operational Structure Business Heads Zonal Managers • Sound Understanding of Rural Market ~90% of employees are hired fresh from rural communities ~50%-60% of employees are from families of active customers Multi-Pronged Approach For Risk Management Internal Audit (IA): IA frequency - 6 times in a year at branches, 4 times at RO, 4 times at HO The entire audit process in automated enabling real-time data analytics The Audit Committee of our Board is updated every quarter on significant internal audit observations, compliances, risk management practices and control systems Regional/Divisional Heads Highly Efficient Workforce Area Managers Branch Managers Loan Officers Branches • In-house 2-3 weeks pre-hiring training program Compulsory rotation of loan officers annually and branch managers tri-annually for varied job experience and work satisfaction Employee incentives delinked from disbursement or collections, and linked to number of customers serviced, quality of service and process adherence High employee retention rate Quality Control (Business Support): Fort-nightly branch visits Complements internal audit function by early identification of operational risks Branch sanitization, fraud investigation, PAR investigation, support new business expansion Field Risk Control (FRC): FRC adds strength to proactive operational risk management FRC complements the field operations supervision, quality control and internal audit function www.creditaccessgrameen.in 31#32Continuous Technology Enhancement to Drive Operational Efficiency CreditAccess Grameen Ensures Quick And Seamless Delivery of Need Based Financial Products and Services backed by Robust Technology Infrastructure High touch-high tech delivery model: • Digitized all customer touchpoints • • • • • Field staff equipped with handheld tabs for managing Kendra meetings & collections Automated/ paperless customer on-boarding, faster KYC, and CB checks Lower TAT, same day and on-field loan disbursements Geotagging of Kendra locations to optimize field visits Cashless disbursement / digital repayment options for customers Robust CBS to support innovative product features, and enhanced data analytics for anticipating future trends Strong tech-enabled internal audit, risk, and control systems to enable real-time field risk monitoring Future Upgrades & Investments Upgradation of CBS to the latest version over the next 18-24 months to enable higher business scalability Investment in Enterprise Service Bus and Microservices Architecture will allow us to be more agile and connect seamlessly with external financial and fintech ecosystems Enhancement of existing mobility apps including automation of entry through image reading, single platform for all apps Extension of workflow capabilities for process automation and more RPA enabled processes for faster processing Active exploration of partnerships with fintech players to implement innovative digital solutions Investment in zero code platforms and tools leading to faster implementation of new technologies www.creditaccessgrameen.in 32 32 Ⓡ#33Integrating Risk Management in Every Operating Process CreditAccess Ⓡ Grameen Microfinance is a Collection Business, hence Risk Management is Integral to Core Strategy and Operating Processes Contiguous District-based Expansion Target Customer Segment Customer Due-Diligence Lending Model Customer Engagement Model Employee Incentive Structure Employee Rotation Policy Consistent replication of processes/ controls Better understanding of social/ economic/ political/ climate risks, historical PAR, competition intensity High quality growth Focus on rural markets: •Less served, high potential Better control & asset quality Focus on new-to- credit customers: • Shapes customer behaviour and credit discipline • Increases loyalty Self-chosen group formation CGT, GRT, house visits • Comprehensive bureau check for all earning family members help to manage competition and overleveraging • Responsible loan usage due to flexible products/ repayment options • Better cash flow management • Reduced risk of overleveraging • More frequent engagement through weekly model • Early identification of imminent stress • Better control on collections • Faster recovery • No incentive to push higher disbursements • No impact on incentives due to external impact on collections • Incentivization for process adherence, customer training, customer servicing • Annual rotation of LOs and tri- annual rotation of BMs • Audit & Quality Control team rotation within the state • Reduces person dependence and provides multiple checks • Avoids over- leveraging Early Risk Recognition and Conservative Provisioning www.creditaccessgrameen.in 33#34Strong Parentage & Shareholder Base CreditAccess India CreditAccess Ⓡ Grameen Shareholding Pattern March 2023 Others, 4.37 MF, AIF, Insurance, 12.28 . . . Committed to Micro Finance Business CreditAccess India B.V. (CAI) specialises in Micro & Small Enterprises financing Widely held shareholding base: 247 shareholders Olympus ACF Pte Ltd. 15.4%, Asian Development Bank 8.8%, Asia Impact Invest SA 8.8%, individuals/HNIs/Family Offices 67.1% Headquartered in Amsterdam, The Netherlands Strong Financial Support via Patient Capital Invested through multiple rounds of capital funding along with secondary purchases during 2009 to 2017 Displayed trust in our business model post Demonetisation by infusing INR 550 Cr in FY17 Provides access to global fundraising opportunities leveraging CAI's network and relationships Holds 73.68% in CA Grameen, committed to holding up to the regulatory requirement in future FPI, 9.67 Top 10 Institutional Investors - March 2023 Edelweiss Mutual Fund Government Pension Fund Global ICICI Prudential Life Insurance Nippon Mutual Fund PGIM India Mutual Fund SBI Mutual Fund T Rowe Price Tata AIA Life Insurance UTI Mutual Fund Vanguard www.creditaccessgrameen.in Promoter Group, 73.68 34#35Past Five Years Performance Track Record (1/2) Gross Loan Portfolio (GLP) (INR Cr) CAGR 31% 21,031 16,599 13,587 11,996 7,159 Disbursements CAGR 23% 18,539 15,466 10,389 11,011 8,221 2,470 CreditAccess Ⓡ Grameen Active Borrowers ('000) CAGR 15% 4,264 4,055 3,912 3,824 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 670 Branch Network CAGR 28% 1,786 1,635 1,393 1,424 Loan Officers CAGR 19% 10,770 11,490 9,688 9,559 5,768 Employees CAGR 20% 15,667 16,759 14,496 14,399 8,064 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 www.creditaccessgrameen.in 35#36Past Five Years Performance Track Record (2/2) Note: Refer Annexure for definition of key ratios CreditAccess Ⓡ Grameen Margin Analysis (%) Operating Efficiency (%) Asset Quality (%) 5.01% 20.0% 19.4% 18.8% 18.3% 18.9% 5.0% 4.9% 4.8% 4.9% 4.7% 3.44% 2.78% 1.78% 12.7% 12.2% 10.7% 10.9% 11.6% 1.14% 4.43% 33.9% 36.7% 38.1% 39.0% 35.6% 3.61% 1.49% 1.21% 10.4% 10.0% 0.59% 9.5% 9.3% 9.4% FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 Portfolio Yield Cost of Borrowings NIM I Cost/Income Ratio Opex/GLP Ratio GNPA - Provisioning (ECL) PAT (INR Cr) Total Equity (INR Cr) & Debt/Equity Ratio Return Ratios & Capital Adequacy (%) 2.9 2.9 3.1 3.2 35.3% 826 2.0 26.8% 23.6% 5,107 22.8% 23.6% 3,796 4,167 2,365 2,669 322 328 357 131 9.0% 18.0% 16.3% 12.9% 4.0% 5.0% 3.6% 4.2% 0.9% 2.2% FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 Total Equity Debt/Equity Ratio CRAR ROE ROA Note: FY23 figures have been restated post completion of CA Grameen - MMFL legal merger www.creditaccessgrameen.in 36#37Key Ratios: Definitions CreditAccess Grameen 1. Portfolio Yield = (Interest on loans - processing fees + Income from securitisation)/ Avg. quarterly on-book loans 2. Cost of Borrowings / Weighted Avg. COB = (Borrowing cost – finance lease charges) / Daily average borrowings 3. Marginal COB = (Borrowings availed during the period * interest rate + processing fees and other charges) / Borrowings availed during the period 4. NIM = (NII processing fees, interest on deposits, income from direct assignment + finance lease charges) / Avg. quarterly on-book loans 5. Cost/Income Ratio = Operating cost / Total Net Income 6. Opex/GLP Ratio = Operating cost / Avg. quarterly GLP 7. ROA = PAT/Avg. Quarterly Total Assets (including direct assignment) (Annualized), ROE = PAT/Avg. Quarterly Total Equity (Annualized) 8. Debt Debt Securities + Borrowings (other than debt securities) + Subordinated Liabilities = 9. GNPA Stage III exposure at default/ (Sum of exposure at default of Stage 1 + Stage II + Stage III) 10. NNPA = (Stage III exposure at default – Stage III ECL) / (Sum of exposure at default of Stage 1 + Stage II + Stage III – Stage III ECL) 11. Provisioning (ECL) = (Stage | ECL + Stage II ECL + Stage III ECL) / (Sum of exposure at default of Stage 1 + Stage II + Stage III) www.creditaccessgrameen.in 37 Ⓡ#38CreditAccess® Grameen For Further Queries: Great Place To WorkⓇ Certified JAN 2023 - JAN 2024 INDIA Nilesh Dalvi SVP & Head Investor Relations Contact No - 9819289131 Email Id - [email protected] Sahib Sharma AGM - Investor Relations Contact No - 7066559383 Email Id [email protected] www.creditaccessgrameen.in 38