A Microfinance Institution at Crossroads Harvard Case Solution & Analysis

Problem Statement

How can Ujjivan become profitable with sustained growth?


Ujjivan is a microfinance institution, aimed at providing financial facilities to the underprivileged areas of the India, specially empowering women in the country,whoare living belowthe poverty line and struggling for life to support their daily expenses such as food, cloths, shelter, and medical expenses as well. Furthermore, the company is a young in the market and is growing rapidly. Indeed, the increased complex financial system has made complicated procedures for acquiring loans,especially for the poor people.

So, this triggered the growth of the microfinance institutions which has also increased competition as well. Furthermore, the Ujjivan focused on the urban women empowerment rather than serving the rural population. With this perspective and mission, the Ujjivan expanded to the main cities of the India including Bangalore, Kolkata, and Delhi. Meanwhile, it has acustomer base of 25,000 in all cities.

Furthermore, the attractiveness of the Ujjivan was its quick processing loan in less lead time, and its broad range of financial products that include family loan, business loan, housing loans, and other two small loans like festival loans, and emergency loan that is being processed within 24 hours of thetime period. Indeed, the increased financial complexities have attracted customers to the Ujjivan, and also due to the trust that company had built among the customers regarding the facilitations and services.

Meanwhile, Ujjivan has been under many problems.Since, it rapid growth does require control over the operations, in which Ujjivan lacks. Because, Ujjivan is incurring net loss from the operations. The net loss continuesto increaseevery year, and the fraud in the loan repayments, and in insurance payment has also increased.Meanwhile the competition in the market has been increasing, so sustaining growth would be a concern for the company. Therefore, meeting those challenges is vital for Ujjivan to understand and formulatestrategies accordingly.

A Microfinance Institution at Crossroads Harvard Case Solution & Analysis


Ujjivan was founded by Samit Ghosh in 2005 with theaim to provide loans to the underprivileged women in the urban areas. However, the Ujjivan was the only microfinance company that aimed at only serving the urban women rather than the rural as the other competitors were doing the same in the industry. Furthermore, the Ghosh had tremendous experience in the banking systems and knew very well to contemplate on the Indian market and offer loan services according to the market needs by cutting the lead time through lesser documentation and overallease in processessing.

Furthermore, it only focused on the women empowerment rather than men. Furthermore, the company has been struggling in employing the experienced employees in the branches in the posts of the customer relation staff, and customer relationship managers as well. Therefore, it was amajor concern for the Ujjivan to afford to pay high scale salaries to the CRSstaff and CRM managers.

Consequently, thecompany was also facing problems in the training and development of employees. Since, retaining the employees was a challenge for the company because it did not know that wouldemployeeswork with Ujjivan after getting the training. On the other hand, the rapid growth also increased complexities in managing the customers, and their repayments processes as well, so to appropriately serve customers the need for technology, to cut costs, and sustain the growth along with prevention of the fraud was necessary...................

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