The president of microfinance lender Bharat Financial Inclusion Ltd., Dilli Raj, who was on leave for two months, has resigned from the company effective September 21, the company said in a filing on the Bombay Stock Exchange.The company was formerly known as SKS Microfinance Ltd.
Manging Director and Chief Executive Officer MR Rao, who was overseeing the company’s functions during Dilli Raj’s absence, will continue to do so.
Dilli Raj’s resignation was his personal choice, PH Ravikumar, non-executive chairman of Bharat Financial Inclusion told BloombergQuint over a telephonic interview when asked about the resignation.
The board has not yet taken a decision on a replacement for and will meet and review the situation, Ravikumar said, adding that their QIP is going on and that the company remains focussed on that for now.
Dilli Raj had been arrested by the Enforcement Directorate last month in an ongoing investigation, following a complaint filed by IDBI Bank Ltd. against First Leasing Company of India, where he was an employee till January 2008 before he joined Bharat Financial Inclusion.
Bharat Financial had issued a clarification saying that his arrest had nothing to do with the company. Thereafter, on August 9, 2016, the company informed in a press release, that Dilli Raj was on leave for two months citing ‘personal reasons’.
Dilli Raj had joined the company in January 2008 and introduced mainstream financial products into microfinance. He has been credited for preparing the company for its IPO in August 2010.
Dilli Raj had a strategic role in Bharat Financial’s turnaround and managing the Andhra Pradesh MFI crisis by focusing on cash flow management, cost structure optimization and gaining the confidence of credit grantors... Dilli Raj has led the policy advocacy efforts which have resulted in a more conducive environment for the MFIs and largely mitigated the regulatory risk.Company website
MR Rao joined Bharat Financial in October 2006 and is said to have led the company’s rural distribution reach and scale-up. Intriguingly, there is no mention of Dilli Raj in the core management team on the company’s website.
MR shouldered the responsibility of combating the Andhra Pradesh MFI crisis and insulating the non-Andhra Pradesh operations from the contagion risk.Company’s latest investor presentation
When asked if the company was seeing any uptick in microfinance credit demand on the back of good monsoons, non-executive chairman Ravikumar said the possibility cannot be ruled out. Bharat Financial Inclusion does not do agriculture-related lending, but related occupational lending.
When asked if there was any scope for any further cut in the company’s lending rates, Ravikumar said that the company was already the lowest cost MFI lender, lower than even Bandhan, which is a bank.
The company has guided for non-Andhra Pradesh gross loan portfolio of Rs 11,000 crore in FY17, an increase of 43 percent over FY16 and for net profit of Rs 450 crore, a rise of 48 percent on a year-on-year basis.
Bharat Financial’s shares rallied as much as 4 percent to Rs 810 in early trade on Thursday, as Dilli Raj’s exit removes an overhang for the stock.