Sarvodaya Finance records very impressive results in FY 2017/18
Sarvodaya Development Finance Ltd, a leading finance company in the forefront of the finance industry, has recorded very impressive results during the last financial year 2017/18.
The company achieved a number of tangible improvements encompassing many aspects as a result of successfully implementing a series of strategic measures.
In terms of the overall financial health of the company, Sarvodaya Finance’s internal risk matrix has now switched to predominantly green, with only a few amber and red spots remaining, with revenues, profitability, quality of portfolio, advance portfolio growth, deposit portfolio growth and efficiency indicators – all recording clear improvements.
Portraying a strong and steadfast turnaround in its growth trajectory, Sarvodaya Finance displayed outstanding performance, rising from a slowdown in the previous year and recorded significant progress and positive growth in the 2017/18 financial year.
The profit before tax for the period under review grew to Rs.114 million from a loss of Rs.44 million in FY 2018/17. The company’s interest income escalated from Rs.884 million to Rs.1,180 million, recording a 33 percent hike.
Several factors, such as the improvement in portfolio, as well as more focus towards small and medium enterprise, personal loans and leasing categories, have led Sarvodaya Finance to gain a distinct growth in the interest income.
Furthermore, the profit after tax for the year under review was Rs.81 million from a net loss of Rs.35 million recorded in the previous year.
Sarvodaya Finance also showed positive growth in its deposit sector, which recorded a 30 percent growth, rising from Rs.3,564 million to Rs.4,625 million. The growth in deposits also reflected upon the company’s lending portfolio, bringing its loan portfolio to record 41 percent increment by escalating from Rs.3,761 million to Rs.5,309 million.
In terms of portfolio quality, the company recorded an improvement in gross non-performing loan (NPL) ratio from 9.8 percent to 6.2 percent, while its net NPL improved from 4.5 percent to 2.6 percent.
Several key factors led to the positive results in the financial year 2017/18, mainly due to the steps taken by Sarvodaya Finance. The new growth strategies implemented in the lending and deposits areas have given the expected results. The steps taken to restructure recovery, legal and litigation areas have shown very positive results and the company is quite optimistic that its full potential will be realized in the next few years.
A performance-based incentive and rewarding system that rewards high performance have started showing early results and this in turn encouraged all employees, especially those serving in the frontline, to be more passionate about their work while distinctively improving their productivity, efficiency and competency.
The financial year 2017/18 saw some significant drives by the company, such as the partnership drawn with Lankapay common ATM network to offer its customers the ultimate convenience of performing transactions from anywhere in the country.
With a synergy drawn with the leading telecommunication provider – Mobitel, the ‘mcash’ service was also introduced to Sarvodaya Finance customers, giving them exposure to the much-deserved modern technology and seamless benefits it brings.
mcash offers a completely secure environment for the customers to perform their loan repayment at their door step via this mobile application, with added assurance of text notification on each transaction being made.