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About Spandana Sphoorty

Spandana Sphoorty Financial Limited (‘SSFL’) is a public company incorporated under the provisions of the Companies Act,1956 on March, 2003. The Company was registered as a non-deposit accepting Non-Banking Financial Company (‘NBFC-ND’) with the Reserve Bank of India (‘RBI’) and has got classified as Non-Banking Financial Company – Micro Financial Institution (NBFC – MFI) effective April 13, 2015.

The Company is engaged in the business of micro finance providing small ticket unsecured loans to women of low-income households in rural and urban areas. The tenure of these loans is one to two years. The Company provides business loans, income generation loans and Loans against Gold jewellery.

Ms.Reddy, the Founder and Managing Director of the company, worked for a NGO which was engaged in rural developmental activities those were funded predominantly by grants. Though these activities had reasonably good impact but the urge to pursue a strong idea of developing sustainable and scalable community developmental activities did not subside. A small experiment of giving a small loan to a rag picker has led to a scalable business model [the story]. Exploring options of viability, our team evaluated global models in microfinance and models that would work in localized geography.

In the initial roll out, getting funding from banks was challenging as the model had to be tested and validated locally. We continued alternative developmental programs like Healthcare, Nutrition, Sanitation etc. As the operations picked up we challenged the conventional methods and addressed the bottlenecks & building efficiencies which at that time all seemed like common sense. The first pleasant surprise came to us when our official financials showed the achieved break-even.

In the first two years (1998-2000), around the turn of the century, Spandana crossed its first milestone of Rs.1 crore (10 million) disbursement and about 2,000 clients. Funds were difficult to raise. Bankers were wary of this client segment since the state directed credit given by Bankers, had dismal repayment rates. – It took months of demonstrated repayment performance & conviction of Spandana team to lead to trickling-in of loan funds. This has also happened due to the initial support of FWWB and few good friends. By the year 2002, ;Spandana reached out to about 15,000 clients. Around the same time, Bankers started looking at MFIs as a reliable and Bankable entity.Rating agencies like M-CRIL & CRISIL along with many sectors’ resource organisations have also played a critical role in critiquing & strengthening of the Microfinance sector.