Bangalore-based MFI Ujjivan Financial Services recorded a 12.5 per cent portfolio growth to Rs 703 crore in 2011-12.

The portfolio expansion is significant given the challenging circumstances the sector has been facing since October 2010. The MFI's customer base grew to over one million across 20 States and Union Territories, a press release from the company said.

Consolidation

Mr Samit Ghosh, Managing Director, Ujjivan, said that the focus during 2011-12 was consolidation of operations, and “we improved our portfolio quality while strengthening customer relationships”, he added. According to him, the first two quarters were very difficult due to funding constraints.

In January 2012, Ujjivan received Rs 127.8 crore ($25.5 million) in its fifth equity infusion. “We received debt and equity funding in the latter half of the year from investors and financial institutions in India and overseas,” said Mr Ghosh in the relase.

He pointed out that the MFI undertook efficiency measures in 2011-12 to reduce costs and rationalised the number of branches from 350 to 299 through mergers. This helped reduce the operating costs to comply with the new norms of the Reserve Bank of India, he said.

> anju@thehindu.co.in

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