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“Analysis is the starting point of strategic thinking” – Kenichi Ohmae


In t?odays’s competitive era the word ‘Analysis and Strategy’ is very crucial for all business organization. Organizations have started realizing that customer centric and aggressive marketing strategies play vital role to become successful leaders.This necessitates managers to make a detailed diagnosis of a company’s immediate industry and competitive environment. Without perceptive understanding of the strategic aspects of a company’s external and internal environments, the chances are greatly increased, that the managers will concoct a strategic game plan that doesn’t fit the situation well, that holds little prospect for building competitive advantage , and that is unlikely to boost company’s performance.

Managers are not prepared to decide on a long term direction or a strategy until they have a keen understanding of the industry.

The objective of this report is to do a comprehensive analysis of the Financial Services industry with major focus on the competition in the NBFC sectors.












India has a rapidly expanding diversified financial sector, both in terms of the strong growth of existing financial services companies and new entities entering the market. The sector includes commercial banks, insurance companies, non-bank financial companies, co-operatives, pension funds, mutual funds and other minor financial entities. The banking regulator allowed the creation of new entities, such as payment banks, thus increasing the types of entities operating in the sector. However, the financial sector in India is predominantly a banking sector with commercial banks accounting for over 64% of the total assets held by the financial system.


The Indian government has introduced several reforms to liberalize, regulate and improve this industry. The Government and the Reserve Bank of India (RBI) have taken various measures to facilitate easy access to finance for Micro, Small and Medium-Sized Enterprises (MSME). These measures include the launch of the credit guarantee program for micro and small businesses, the issuance of guidelines for banks in relation to guarantee requirements and the creation of a Micro Units development and refinancing agency (MUDRA) . With a combined push from the government and the private sector, India is undoubtedly one of the most vibrant financial markets in the world.

























Segments of the Financial Service Sector









·        NBFCs are rapidly gaining importance as intermediaries in retail financial space.

·        NBFCs finance over 80% of equipment leasing and rental activities in India.

·        NBFC’s public deposit increased from US $ 293.78 million in FY09 to US $ 6.089.52 million in FY17, with a compound annual growth rate (CAGR) of 46.30%.

·        Gross loans from microfinance institutions of non-bank financial institutions of India (NBFC-IMF) increased by 24% year-on-year in the second quarter of 18 to Rs 38,288 million (US $ 5.89 billion)




Janalakshmi Financial Services Limited, formerly Janalakshmi Financial Services Private Limited, is an India-based non-banking financial company. The Company is engaged in micro finance operations. It provides financial services, including granting loans, advances and trade credits, and other related services. The Company offers loans to individuals, including small batch loans, nano loans, home improvement loans, Jana Kisan loans and Jana Vidya loans, and enterprises, including micro, small and medium enterprise loans, long-term business loans and super nano loans. Its third-party products and services include micro pension, livestock insurance for livestock loans, home insurance, commercial insurance, life insurance for loans and Badhti Bachat. The Company’s technology platform, Payments Plus platform is built around components, including the front end as a biometric-based transaction device; the back end as the Core Banking System, and a Customer Relationship Management system.

Janalakshmi Story So Far…..




The main objective of Janalakshmi’s retail loans is microfinance, but in recent years they have expanded this offer to include five different types of retail loans.


This is a fundamental product through which Janalakshmi responds to the credit needs of several marginal Lakh families. A small loan is granted to individuals in a group comprising a minimum of five and a maximum of 25 women, where each one guarantees the other. This structure has five loan cycles. After completing each of them, a customer can borrow the same amount or move to the next level.



This individual commercial loan allows budding entrepreneurs to finance working capital and invest in equipment. The Nano loan is offered to customers with a proven credit history after completing two years in a small batch loan facility.


Many customers build homes slowly and “incrementally” over time, based on their needs and the availability of resources. Home loan accelerates this process of minor improvements, extensions, repairs and renovations. The product is offered to customers with a proven credit history after completing two years in a small loan facility.


This loan is offered to small and marginal farmers, as well as to rented farmers, for capital formation and to improve agricultural productivity. The loan covers agricultural and related activities, such as milk, the production of vegetables, sericulture, poultry and the maintenance of tractors and other agricultural machinery. It is offered through our rural and semi-urban branches.



A school-going child’s tuition fee; admission, exam and library fees; purchase of text books, uniforms and other school-related material are covered by the education loan. This product is offered to all existing small batch loan members.



Companies that are too big for microfinance but not big enough to conveniently access conventional bank funds receive services from Janalaksmi’s Enterprise Financial Services (EFS) initiative. They offer four products with a unique design. 


An advanced service designed to support the growing credit requirements of micro-enterprises or small businesses that belong to existing Nano loan customers. The Super Nano loan is also offered to customers in the open market, who have a favorable credit history with other financial institutions.





The loan is for MSME (mainly in the unorganized sector) looking for working capital and term loans. The loan is delivered to the customer’s door in certain cities. To assess suitability and serve this segment, Janalakshmi uses sophisticated assessment tools and subscription techniques.



This product meets the liquidity needs of micro, small and medium-sized entrepreneurs, those whose capital is locked in the real estate sector but which are not considered an attractive financing option by traditional lenders. The LTBL provides financing against own and occupied property. It offers customers long-term growth funding while maintaining EMIs at affordable prices.



A fast loan service for micro, small and medium-sized businesses to buy new or used machines and, therefore, upgrade the technology to try to achieve greater economies of scale.



India’s urban population will reach 600 million by 2031, more than double that of 2001! The number of metropolitan cities with a population of 1 million or more is expected to increase from 50 in 2011 to 87 in 2031. To facilitate this historic demographic change, large-scale investment in critical public services, renewable energy, transport infrastructure, housing Convenient, transport, logistics, etc. They are essential to help develop interrelations, connect and create synergies between rural and urban economic centers. In our opinion, these core services are also a key reference for the inclusion of the Janalakshmi customer base through our Retail and Enterprise Finance activities.




Market Share

Bajaj Finance (although not a strictly an MFI) is the biggest of all followed by gold loan companies. Janlakshmi is biggest MFI. 




MFI’s customer base grew by 2.8 million in 2016, bringing the total number of customers to 39.9 million. This growth took place despite the fact that Bandhan, which was the largest of the MFIs, has left space to become a complete bank.

The top 10 MFIs classified as non-bank financial corporations (NBFC) accounted for around 80% of the total gross loan value, according to the report. They include Janalakshmi Financial Services Ltd, Ujjivan Financial Services Ltd and SKS Microfinance Ltd.

Reaching more than 28 Lakh customers is not a company. This shows that the microfinance industry, which has reached its turning point, is constantly growing.

The state government has tightened the rules governing MFIs after reports have emerged that lenders’ coercive practices of loan recovery have led to overly extensive borrowers to commit suicide. This led to a reduction in the capital base of the microfinance industry and an increase in non-performing loans.

Of the total customer base of 39.9 million, the southern region contributed only 39% of the total customer base. Kerala and Karnataka now have the maximum number of MFI branches.

Growth in this sector is also due to the Reserve Bank of India, which allows many MFIs to act as bank correspondents (BCS), linking commercial banks with customers in small cities and rural areas.

MFIs are finding that the BC model is quite interesting on the credit side.

The report also states that 94% of total loans taken by MFIs is earmarked for income generating activities dominated by agriculture and animal husbandry.



Consumers (aged 18 to 65) across the world are more likely to identify an “ideal” customer experience with quick responses from companies to questions or complaints (47% cite as a top-3 article) and a Simple purchase process (even 47%), according to a new study published by The Economist Intelligence Unit (EIU). It is interesting to note that these factors far outweigh the others, such as personalization of experience (12%) and personalized offers based on preferences (7%). This does not necessarily mean that they are not important, personalization seems to be influential in the commercial space, but that consumers want the basics to be treated first.

If such basic elements are not provided, it can lead to loss of business, according to the report. Most respondents said they stopped doing business with at least one company during the previous year due to a negative experience, with this sub-group of respondents pointing to slow responses to requests and complaints, information about incorrect products or misleading and delays in the delivery of the product or service as the aspects of the experience that most “bothered” them.

Overall, 71% of respondents said their typical response to a bad experience is to stop doing business with the company. A slight majority (55%) usually say to their friends and family in person or via e-mail, while 42% say they complain about the company and 26% post a comment on social networks.






Porter’s Five Force Framwork Analysis













·        Total mergers and acquisitions (mergers and acquisitions) increased by 23% to $ 15.8 billion in value terms in the January-March 2017 period.


·        The total value of investments in Private Equity (PE) / venture capital (VC) exceeded US $ 2,000 million, with an increase of 29% on an annual basis of the number of transactions in April 2017.


·        The total number of mutual fund schemes in India with Assets Under Management (AUM) of over 10,000 crore Rs (US $ 1,550 million) has doubled to 12 in the last year, according to Value Research data and funds from the sheets of work.

·        The assets under management (AUM) of the national mutual fund industry investment (MF) hit a record of Rs 20.06 lakh crore (US $ 313.06 billion), almost a fifth of deposits in the banking system in August 2017.


·        Driven by a strong participation by retail investors and the creation of awareness by the Securities and Exchange Council of India (SEBI), mutual funds recorded a net profit of Rs 20,362 crore of records (US $ 3,180 million), which is a seventeenth month income in equity schemes, thus increasing its capital base at Rs 6.44 lakh (US $ 100.8 billion) in August 2017.


·        The number of new fund-offering programs (NFOs) in the capital investment funds segment increased to 29 during the 2016-17 period, of which 25 funds were launched in the period from September to March with assets totaling 4.220 million of rupees (655.23 million dollars).


·        It is estimated that revenues from the brokerage sector in India will increase by 15-20 percent between 18,000 and 19,000 crore (US $ 2.80-296 billion) in FY2017-18, supported by healthy volumes and an increase in segment participation of cash


·        Asset Reconstruction Company Limited Edelweiss (EARC) with assets under management (AUM) worth Rs 41,680 crore (US $ 6530 million) plans to increase Rs 500 crore (US $ 78.39 million) through obligations.


·        According to Mark Mobius, executive chairman of Templeton Emerging Markets Group, the Nifty Indian financial market of reference could double from its current level of 10,000 over the next three or four years thanks to strong economic growth and rational interest rates.


·        Common equity funds recorded a record sixteenth consecutive month of 12,727 crores (2,000 million) due to the rebound in equity markets and interest rate cut expectations from Reserve Bank items.


·        The Indian life insurance business has started to recover and is likely to report a 12-15% growth in the 2016-17 fiscal year.


·        In 2016, the Indians opened 2.4 million new demat accounts, the largest number of account openings since 2008, driven by a larger number of initial public offers (IPOs) and greater interest in mutual funds.

·        SBI, the second largest credit card issuer in India, announced the release of 115,000 new cards in December 2016, after demonetization, bringing its total card issuance to 4.75 million. ·        As the Reserve Bank of India (RBI) allows more functions, such as unlimited funds transfers between portfolios and bank accounts, mobile portfolios will become important players in the financial ecosystem. ·        It is estimated that the Indian mobile wallet industry will grow at a compound annual growth rate (CAGR) of 148% to reach $ 4.4 billion by 2022. ·        Indian companies are strengthening their footprint on foreign shores, improving geographical exposure. Digital transactions reached a record level of 1.060 million in December 2017. ·        The NBFCs served unpaid clients through early retirement loans, securities lending and microfinance. NBFCs aspire to emerge as a single window for all financial services. ·        The NBFC sector has seen moderate consolidation activities in recent years, a trend that should continue in the near future. ·        The new guidelines for bank licenses issued by the RBI at the beginning of 2013 place the NBFCs in view of competition for licenses mainly due to their rural network. ·        The new RBI guidelines on NBFCs in relation to capital requirements, provisioning rules and advanced disclosure requirements are expected to benefit the long-term sector. ·        The Indian Prime Minister, Narendra Modi, said that the BHIM mobile application (Bharat Interface for Money) has reached the mark of 10 million downloads, indicating broad acceptance of the application.