Ujjivan: A Microfinance Institution at a Crossroads Harvard Case Solution & Analysis

Ujjivan: A Microfinance Institution at a Crossroads Case Study Solution

SWOT analysis of the Ujjivan microfinance bank


The Ujjivan microfinance has various diversified products such as business loans, educational loans etc. Moreover, the institute is working for the betterment of the country with the objective of eliminating the poverty and empowering women towards their dreams. These objective will also contribute to the economy of the India. As the amount of loans will invest in housing, education and in various business.


The Ujjivan microfinance institute has the lack of qualified staff which will hindered the efficient working of the company. Moreover, the fraudulent activities of the staff will create problem to gain the trust of clients hence, this will leads to the reduction in the number of customers for the bank. Besides, the lack of technology will became the obstacle for the efficient working of the institute.


The Ujjivan microfinance institute has the opportunities to contribute for the society development by promoting financial inclusion and offers chance to meet the necessities of the underprivileged people. Furthermore, it also contributes in the promotion of different modern technology hence, many other business are dependent on this institute.


The Ujjivan microfinance institute has many threats including the threat of competing with its competitors, as the bank has very small share in the market it is difficult to compete with its competitors. Moreover there are also the threat of lack of cash, due to small in market share the company can face the lack of cash to pay to its depositors apart from this, there are various legal requirements and regulations by the government that needs to be followed by the bank. (edition, 2019)

Analysis of financial reports

The Ujjivan microfinance bank has incurred a huge loss in the initiation of the business. This can be indicate by the company income statement of the company. As, the bank is in expansion phase. So, in the current conditions if the company grows by 21% of compound annual growth rate on average, the bank will able to earn profit in subsequent year. Moreover, the earing per share has negative at the initiation of business. If the company grows by the 1% of the compound annual growth rate so, the company will achieve positive earnings per share in the subsequent year, which will leads to breakeven the operational loss incurred by the company.

The performance of the company can determine by the balance sheet. It is assume that the balance sheet items will grow at 7% annual compound growth rate, the total assets of the company are growing as per the assumption. This suggest that only expanding branches is not enough for the company, the company should prepared different budgets in order to reduce the operational loss. Moreover, the company financial statement shows that, the company is highly leverage, on the other hand the company has excessive assets. This shows that the company is not investing in viable ventures. So, to reduce operating loss the company should invest its assets in various capital ventures. In this way the company can achieve the breakeven point and expand in the subsequent year.


The Ujjivan microfinance institute has been expanding its branches in different cities of India including Bangalore, Kolkata etc. for expansion the company needs to concentrate on the reduction in operational expenses by preparing various budget and financial model moreover, the company needs to focus on the employees and their actions that can affect the efficient operations of the company, the company should also focus on to mitigate the risk of default and fraudulent activities conducted in the bank.

Ujjivan is not able to achieve breakeven. However, the expansion will cover the operation loss in the subsequent year. Apart from this the bank should give information to its customers so that, they can adopt the safety measures for the fraudulent activities conducted in the bank.


In order to expand and sustained in the market, the Ujjivan microfinance bank has to develop their technology to mitigate the risk of default as well as, to overcome the fraudulent activities conducted in banks, moreover to reduce operational losses, the company should organize training for their staff and offer dividend stocks to motivate them, the bank should also concentrate in various investment opportunities, to increase the profitability of the bank, and should prepared different budget and financial model to make future decision.

There is higher demand for the loans, if the bank will achieve their targets, they can contribute for the betterment of the economy and will be able to achieve its mission of eradicating the poverty and women empowerment.

Exhibit 1

2007 2008 2009 2010 CAGR
I. SOURCES OF FUNDS 1 Share Holders Funds:
Share Capital 54982000 58830740 62948892 67355314 7%
Share application Money pending allotment
Loan Funds
Secured Loans 58519454 62615816 66998923 71688847 7%
Unsecured Loans 3045833 3259041 3487174 3731276 7%
TOTAL 116547287 124705597 133434989 142775438 7%
N. Fixed Assets:
(a)Gross Block 13017398 13928616 14903619 15946872 7%
(b)Less: Depreciation 2669925 2856820 3056797 3270773 7%
(c)Net Block 10347473 11071796 11846822 12676099 7%
(d)Capital Work In Progress
10347473 11071796 11846822 12676099 7%
Loan (Family & Business) 84299459 90200421 96514451 103270462 7%
Current Assets, Loans & Advances
Cash and bank Balance 14360305 15365526 16441113 17591991 7%
(b) Loans & Advances 5339769 5713553 6113502 6541447 7%
19700074 21079079 22554615 24133438 7%
Less: Current liabilities & Provisions
Current liabilities 19607579 20980110 22448717 24020127 7%
Provisions 311778 333602 356955 381941 7%
19919357 21313712 22805672 24402069 7%
Net current assets -219283 -234633 -251057 -268631 7%
Debit balance in Profit and loss account 22119638 23668013 25324774 27097508 7%
TOTAL 116547287 124705597 133434989 142775438 7%

Exhibit 2

Exhibit 1
Year CAGR 2008 2009 2010 2011 2012
Branches (total) 15% 44 110 222 368 562
Urban 28% 44 79 125 178 240
Semi-urban 17% 0 31 97 190 322
Cum loan officers 13% 331 901 1883 3157 4853
Customers (total) 9% 78330 267340 639552 1249528 2088777
General business customers 9% 76290 251890 597642 1166398 1948847
Individual Loan customers 4% 2040 15450 41910 83130 139930
Total Loan Disbursement 5% 776542360 3376468534 9697460727 22645914192 44941266027
Productivity (cust/loan officer) 64% 237 297 340 396 430
Loans outstanding (Rs. MM) 8% 493 1715 3998 7988 13484
Cum interest income 3% 56110217 302416944 965241554 2386763050 4952587751
Net Profit after Taxes (Rs. M) 21% -12331 44700 168738 272450 367025
Total Equity (Rs. MM) 9% 112 661 830 1120 2867
Total Debt (Rs. MM) 8% 397 1091 3348 7437 12028
Debt/Equity. Ratio 88% 4 2 4 7 4
CAR 4% 0.22 37.38 19.28 11.10 19.25
EPS 1% -10 18 68 110 9922
Book Value 20% 91 268 337 454 775

Exhibit 3


This is just a sample partical work. Please place the order on the website to get your own originally done case solution.

Share This


Save Up To




Register now and save up to 30%.