“Analysis is the starting point of strategi? thinking” – Keni?hi Ohmae


In t?odays’s ?ompetitive era the word ‘Analysis and Strategy’ is very ?ru?ial for all business organization. Organizations have started realizing that ?ustomer ?entri? and aggressive marketing strategies play vital role to be?ome su??essful leaders.This ne?essitates managers to make a detailed diagnosis of a ?ompany’s immediate industry and ?ompetitive environment. Without per?eptive understanding of the strategi? aspe?ts of a ?ompany’s external and internal environments, the ?han?es are greatly in?reased, that the managers will ?on?o?t a strategi? game plan that doesn’t fit the situation well, that holds little prospe?t for building ?ompetitive advantage , and that is unlikely to boost ?ompany’s performan?e.

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Managers are not prepared to de?ide on a long term dire?tion or a strategy until they have a keen understanding of the industry.

The obje?tive of this report is to do a ?omprehensive analysis of the Finan?ial Servi?es industry with major fo?us on the ?ompetition in the NBF? se?tors.












India has a rapidly expanding diversified finan?ial se?tor, both in terms of the strong growth of existing finan?ial servi?es ?ompanies and new entities entering the market. The se?tor in?ludes ?ommer?ial banks, insuran?e ?ompanies, non-bank finan?ial ?ompanies, ?o-operatives, pension funds, mutual funds and other minor finan?ial entities. The banking regulator allowed the ?reation of new entities, su?h as payment banks, thus in?reasing the types of entities operating in the se?tor. However, the finan?ial se?tor in India is predominantly a banking se?tor with ?ommer?ial banks a??ounting for over 64% of the total assets held by the finan?ial system.


The Indian government has introdu?ed several reforms to liberalize, regulate and improve this industry. The Government and the Reserve Bank of India (RBI) have taken various measures to fa?ilitate easy a??ess to finan?e for Mi?ro, Small and Medium-Sized Enterprises (MSME). These measures in?lude the laun?h of the ?redit guarantee program for mi?ro and small businesses, the issuan?e of guidelines for banks in relation to guarantee requirements and the ?reation of a Mi?ro Units development and refinan?ing agen?y (MUDRA) . With a ?ombined push from the government and the private se?tor, India is undoubtedly one of the most vibrant finan?ial markets in the world.

























Segments of the Finan?ial Servi?e Se?tor









·        NBF?s are rapidly gaining importan?e as intermediaries in retail finan?ial spa?e.

·        NBF?s finan?e over 80% of equipment leasing and rental a?tivities in India.

·        NBF?’s publi? deposit in?reased from US $ 293.78 million in FY09 to US $ 6.089.52 million in FY17, with a ?ompound annual growth rate (?AGR) of 46.30%.

·        Gross loans from mi?rofinan?e institutions of non-bank finan?ial institutions of India (NBF?-IMF) in?reased by 24% year-on-year in the se?ond quarter of 18 to Rs 38,288 million (US $ 5.89 billion)




Janalakshmi Finan?ial Servi?es Limited, formerly Janalakshmi Finan?ial Servi?es Private Limited, is an India-based non-banking finan?ial ?ompany. The ?ompany is engaged in mi?ro finan?e operations. It provides finan?ial servi?es, in?luding granting loans, advan?es and trade ?redits, and other related servi?es. The ?ompany offers loans to individuals, in?luding small bat?h loans, nano loans, home improvement loans, Jana Kisan loans and Jana Vidya loans, and enterprises, in?luding mi?ro, small and medium enterprise loans, long-term business loans and super nano loans. Its third-party produ?ts and servi?es in?lude mi?ro pension, livesto?k insuran?e for livesto?k loans, home insuran?e, ?ommer?ial insuran?e, life insuran?e for loans and Badhti Ba?hat. The ?ompany’s te?hnology platform, Payments Plus platform is built around ?omponents, in?luding the front end as a biometri?-based transa?tion devi?e; the ba?k end as the ?ore Banking System, and a ?ustomer Relationship Management system.

Janalakshmi Story So Far…..




The main obje?tive of Janalakshmi’s retail loans is mi?rofinan?e, but in re?ent years they have expanded this offer to in?lude five different types of retail loans.


This is a fundamental produ?t through whi?h Janalakshmi responds to the ?redit needs of several marginal Lakh families. A small loan is granted to individuals in a group ?omprising a minimum of five and a maximum of 25 women, where ea?h one guarantees the other. This stru?ture has five loan ?y?les. After ?ompleting ea?h of them, a ?ustomer ?an borrow the same amount or move to the next level.



This individual ?ommer?ial loan allows budding entrepreneurs to finan?e working ?apital and invest in equipment. The Nano loan is offered to ?ustomers with a proven ?redit history after ?ompleting two years in a small bat?h loan fa?ility.


Many ?ustomers build homes slowly and “in?rementally” over time, based on their needs and the availability of resour?es. Home loan a??elerates this pro?ess of minor improvements, extensions, repairs and renovations. The produ?t is offered to ?ustomers with a proven ?redit history after ?ompleting two years in a small loan fa?ility.


This loan is offered to small and marginal farmers, as well as to rented farmers, for ?apital formation and to improve agri?ultural produ?tivity. The loan ?overs agri?ultural and related a?tivities, su?h as milk, the produ?tion of vegetables, seri?ulture, poultry and the maintenan?e of tra?tors and other agri?ultural ma?hinery. It is offered through our rural and semi-urban bran?hes.



A s?hool-going ?hild’s tuition fee; admission, exam and library fees; pur?hase of text books, uniforms and other s?hool-related material are ?overed by the edu?ation loan. This produ?t is offered to all existing small bat?h loan members.



?ompanies that are too big for mi?rofinan?e but not big enough to ?onveniently a??ess ?onventional bank funds re?eive servi?es from Janalaksmi’s Enterprise Finan?ial Servi?es (EFS) initiative. They offer four produ?ts with a unique design. 


An advan?ed servi?e designed to support the growing ?redit requirements of mi?ro-enterprises or small businesses that belong to existing Nano loan ?ustomers. The Super Nano loan is also offered to ?ustomers in the open market, who have a favorable ?redit history with other finan?ial institutions.





The loan is for MSME (mainly in the unorganized se?tor) looking for working ?apital and term loans. The loan is delivered to the ?ustomer’s door in ?ertain ?ities. To assess suitability and serve this segment, Janalakshmi uses sophisti?ated assessment tools and subs?ription te?hniques.



This produ?t meets the liquidity needs of mi?ro, small and medium-sized entrepreneurs, those whose ?apital is lo?ked in the real estate se?tor but whi?h are not ?onsidered an attra?tive finan?ing option by traditional lenders. The LTBL provides finan?ing against own and o??upied property. It offers ?ustomers long-term growth funding while maintaining EMIs at affordable pri?es.



A fast loan servi?e for mi?ro, small and medium-sized businesses to buy new or used ma?hines and, therefore, upgrade the te?hnology to try to a?hieve greater e?onomies of s?ale.



India’s urban population will rea?h 600 million by 2031, more than double that of 2001! The number of metropolitan ?ities with a population of 1 million or more is expe?ted to in?rease from 50 in 2011 to 87 in 2031. To fa?ilitate this histori? demographi? ?hange, large-s?ale investment in ?riti?al publi? servi?es, renewable energy, transport infrastru?ture, housing ?onvenient, transport, logisti?s, et?. They are essential to help develop interrelations, ?onne?t and ?reate synergies between rural and urban e?onomi? ?enters. In our opinion, these ?ore servi?es are also a key referen?e for the in?lusion of the Janalakshmi ?ustomer base through our Retail and Enterprise Finan?e a?tivities.




Market Share

Bajaj Finan?e (although not a stri?tly an MFI) is the biggest of all followed by gold loan ?ompanies. Janlakshmi is biggest MFI. 




MFI’s ?ustomer base grew by 2.8 million in 2016, bringing the total number of ?ustomers to 39.9 million. This growth took pla?e despite the fa?t that Bandhan, whi?h was the largest of the MFIs, has left spa?e to be?ome a ?omplete bank.

The top 10 MFIs ?lassified as non-bank finan?ial ?orporations (NBF?) a??ounted for around 80% of the total gross loan value, a??ording to the report. They in?lude Janalakshmi Finan?ial Servi?es Ltd, Ujjivan Finan?ial Servi?es Ltd and SKS Mi?rofinan?e Ltd.

Rea?hing more than 28 Lakh ?ustomers is not a ?ompany. This shows that the mi?rofinan?e industry, whi?h has rea?hed its turning point, is ?onstantly growing.

The state government has tightened the rules governing MFIs after reports have emerged that lenders’ ?oer?ive pra?ti?es of loan re?overy have led to overly extensive borrowers to ?ommit sui?ide. This led to a redu?tion in the ?apital base of the mi?rofinan?e industry and an in?rease in non-performing loans.

Of the total ?ustomer base of 39.9 million, the southern region ?ontributed only 39% of the total ?ustomer base. Kerala and Karnataka now have the maximum number of MFI bran?hes.

Growth in this se?tor is also due to the Reserve Bank of India, whi?h allows many MFIs to a?t as bank ?orrespondents (B?S), linking ?ommer?ial banks with ?ustomers in small ?ities and rural areas.

MFIs are finding that the B? model is quite interesting on the ?redit side.

The report also states that 94% of total loans taken by MFIs is earmarked for in?ome generating a?tivities dominated by agri?ulture and animal husbandry.



?onsumers (aged 18 to 65) a?ross the world are more likely to identify an “ideal” ?ustomer experien?e with qui?k responses from ?ompanies to questions or ?omplaints (47% ?ite as a top-3 arti?le) and a Simple pur?hase pro?ess (even 47%), a??ording to a new study published by The E?onomist Intelligen?e Unit (EIU). It is interesting to note that these fa?tors far outweigh the others, su?h as personalization of experien?e (12%) and personalized offers based on preferen?es (7%). This does not ne?essarily mean that they are not important, personalization seems to be influential in the ?ommer?ial spa?e, but that ?onsumers want the basi?s to be treated first.

If su?h basi? elements are not provided, it ?an lead to loss of business, a??ording to the report. Most respondents said they stopped doing business with at least one ?ompany during the previous year due to a negative experien?e, with this sub-group of respondents pointing to slow responses to requests and ?omplaints, information about in?orre?t produ?ts or misleading and delays in the delivery of the produ?t or servi?e as the aspe?ts of the experien?e that most “bothered” them.

Overall, 71% of respondents said their typi?al response to a bad experien?e is to stop doing business with the ?ompany. A slight majority (55%) usually say to their friends and family in person or via e-mail, while 42% say they ?omplain about the ?ompany and 26% post a ?omment on so?ial networks.






Porter’s Five For?e Framwork Analysis













·        Total mergers and a?quisitions (mergers and a?quisitions) in?reased by 23% to $ 15.8 billion in value terms in the January-Mar?h 2017 period.


·        The total value of investments in Private Equity (PE) / venture ?apital (V?) ex?eeded US $ 2,000 million, with an in?rease of 29% on an annual basis of the number of transa?tions in April 2017.


·        The total number of mutual fund s?hemes in India with Assets Under Management (AUM) of over 10,000 ?rore Rs (US $ 1,550 million) has doubled to 12 in the last year, a??ording to Value Resear?h data and funds from the sheets of work.

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


·        Driven by a strong parti?ipation by retail investors and the ?reation of awareness by the Se?urities and Ex?hange ?oun?il of India (SEBI), mutual funds re?orded a net profit of Rs 20,362 ?rore of re?ords (US $ 3,180 million), whi?h is a seventeenth month in?ome in equity s?hemes, thus in?reasing its ?apital base at Rs 6.44 lakh (US $ 100.8 billion) in August 2017.


·        The number of new fund-offering programs (NFOs) in the ?apital investment funds segment in?reased to 29 during the 2016-17 period, of whi?h 25 funds were laun?hed in the period from September to Mar?h with assets totaling 4.220 million of rupees (655.23 million dollars).


·        It is estimated that revenues from the brokerage se?tor in India will in?rease by 15-20 per?ent between 18,000 and 19,000 ?rore (US $ 2.80-296 billion) in FY2017-18, supported by healthy volumes and an in?rease in segment parti?ipation of ?ash


·        Asset Re?onstru?tion ?ompany Limited Edelweiss (EAR?) with assets under management (AUM) worth Rs 41,680 ?rore (US $ 6530 million) plans to in?rease Rs 500 ?rore (US $ 78.39 million) through obligations.


·        A??ording to Mark Mobius, exe?utive ?hairman of Templeton Emerging Markets Group, the Nifty Indian finan?ial market of referen?e ?ould double from its ?urrent level of 10,000 over the next three or four years thanks to strong e?onomi? growth and rational interest rates.


·        ?ommon equity funds re?orded a re?ord sixteenth ?onse?utive month of 12,727 ?rores (2,000 million) due to the rebound in equity markets and interest rate ?ut expe?tations from Reserve Bank items.


·        The Indian life insuran?e business has started to re?over and is likely to report a 12-15% growth in the 2016-17 fis?al year.


·        In 2016, the Indians opened 2.4 million new demat a??ounts, the largest number of a??ount openings sin?e 2008, driven by a larger number of initial publi? offers (IPOs) and greater interest in mutual funds.

·        SBI, the se?ond largest ?redit ?ard issuer in India, announ?ed the release of 115,000 new ?ards in De?ember 2016, after demonetization, bringing its total ?ard issuan?e to 4.75 million. ·        As the Reserve Bank of India (RBI) allows more fun?tions, su?h as unlimited funds transfers between portfolios and bank a??ounts, mobile portfolios will be?ome important players in the finan?ial e?osystem. ·        It is estimated that the Indian mobile wallet industry will grow at a ?ompound annual growth rate (?AGR) of 148% to rea?h $ 4.4 billion by 2022. ·        Indian ?ompanies are strengthening their footprint on foreign shores, improving geographi?al exposure. Digital transa?tions rea?hed a re?ord level of 1.060 million in De?ember 2017. ·        The NBF?s served unpaid ?lients through early retirement loans, se?urities lending and mi?rofinan?e. NBF?s aspire to emerge as a single window for all finan?ial servi?es. ·        The NBF? se?tor has seen moderate ?onsolidation a?tivities in re?ent years, a trend that should ?ontinue in the near future. ·        The new guidelines for bank li?enses issued by the RBI at the beginning of 2013 pla?e the NBF?s in view of ?ompetition for li?enses mainly due to their rural network. ·        The new RBI guidelines on NBF?s in relation to ?apital requirements, provisioning rules and advan?ed dis?losure requirements are expe?ted to benefit the long-term se?tor. ·        The Indian Prime Minister, Narendra Modi, said that the BHIM mobile appli?ation (Bharat Interfa?e for Money) has rea?hed the mark of 10 million downloads, indi?ating broad a??eptan?e of the appli?ation.