Enterprise Financial Services

The Enterprise Financial Services (EFS) initiative is our answer to the financial hurdle faced by urban micro entrepreneurs. These enterprises are in the so-called "missing middle," i.e., enterprises that have become too large to tap traditional microfinance, and are unable to conveniently access conventional bank funds.

EFS Product Characteristics

Types of loans: (1) Working capital demand loan with 6 months to 24 months repayment and (2) Term loan with 12 months to 36 months repayment.
Ticket size: From Rs 1,00,000/- to Rs 10,00,000/-.
Repayment method: Post dated cheques with payment date as the 10^th of every month.
Security: Hypothecation of stock, book debts, machinery; assignment of cash surrender value of life insurance policies; mortgage of immovable property, etc. (some or all of the above).

Characteristics of the target MSE

Businesses are run by the owner and family members and sometimes will have 2-3 employees and, hence, owner cannot leave the premises during business hours to visit a bank.
A sizeable component of the business revenue comes from credit sales.
The customer would be primarily interested in availability of loans at affordable rates. Convenience and availability are the key factors in their choice of a loan provider.
Currently money lenders/ family/ friends are the main, albeit unreliable, source of funds.

Value Proposition of EFS

Enterprise loans help in extending the product range offered by MSE businesses.
Enterprise loans help increase quantity of stock that the MSE businesses can afford to carry.
Enterprise loans facilitate higher returns by decreasing credit purchases and increasing cash purchases which, in turn, help in getting the stock at lower rates resulting in an increase in margins.
Enterprise loans facilitate expansion either by purchase of machinery or by increasing the infrastructure, thereby realizing higher output / sales.

Basic Credit Parameters

Three year vintage in Business (Business Registration Certificate required).
Customer KYC documents.
Three years IT returns (ITR Saral, Computation of Income, Balance sheet and Profit & Loss Account).
Six Month Bank account Statement of the business.

For further information, mail us at efsloan@janalakshmi.com