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During the financial year 2018-19, the momentum of Indian economy slowed down slightly and as a result, financial institutions and commercial banks faced challenges on various fronts viz. growing NPAs, decline in credit off-take etc. The slowdown in the economy affected the business prospects of the Corporation as well. However, the Corporation has registered satisfactory performance in all the operational areas viz. sanctions, disbursements and recovery.

The performance highlights of the Corporation in the key result areas of sanction, disbursement and recovery are enumerated below for the information of the shareholders:

* The total loan sanction amounted to 2083.63 lakhs and total loan disbursement amounted to 2014.51 lakhs during FY 2018-19 as against 2287.75 lakhs & 2095.90 lakhs sanctioned & disbursed in the previous year respectively; * Total recovery of loan increased to 2588.56 lakhs during FY2018-19 from 2532.49 lakhs in the previous year registering a growth of marginal growth;
* The total income of the Corporation recorded at 909.73 lakhs which is declined from 1153.59 lakhs in the previous year mainly due to reduction in lending rates and rise in NPAs in some sectors. As a consequence, the Corporation has not been able to earn profit during the year;
* The loan portfolio of the Corporation has slightly increased to 6640.80 lakhs as on 31-03-2019 from 6509.19 lakhs as on 31-03-2018. The slow growth in loan portfolio was registered mainly due to the reason that there was a decline in the credit demand from the Corporation during FY2018-19 due to stiff market competition caused by reduction in lending rates by the commercial banks and other financial institutions. The portfolio size of the Corporation has been below the sustainable level, affecting the Corporation’s operational results adversely.
* In micro finance sector, the loan sanction and disbursement amounted to 795.00 lakhs each during the FY2018-19 as against 1145.00 lakhs & 1068.5 lakhs respectively recorded in the previous year. The Corporation has sanctioned and disbursed total loan of 4187.26 lakhs and 3987.26 lakhs respectively in micro finance sector and provided livelihood support to more than 35000 beneficiaries of the state so far. In this sector, the Corporation has registered 100% loan recovery rate since commencement of operation in the FY 2009-10.

During the year, the Corporation made effort to increase recovery from bad loans like previous years. Accordingly, the Corporation, by virtue of extension and modification of its existing OTS policy made effort to boost up loan recovery from NPA accounts over and above normal course of recovery. However, the Net NPA level has increased to 15.27 % as on 31.03.2019 from 10.38 % as on 31.03.2018 due to increase in sub -standard asset and prepayment & switching over of some good loans to commercial banks and other financial institutions due to cheaper lending rates. It has been the primary concern of the Corporation to increase its loan portfolio as well as asset quality base to increase its income position and attain self-sustainability. However, the Corporation has not been able to increase its loan portfolio as well as asset quality base during the year. The loss incurred in the year and increase in accumulated loss due to prior period adjustments and past liability have resultantly led to dip in the Net Worth position of the Corporation. On the other hand, the CAR slightly improved to 47.12% as on 31-03-2019 as against 53.46% as on 31-03-2018.

The Corporation, in its endeavor to launch new schemes, made a plan to introduce two special schemes called "Start up Assam" Scheme and "Women Entrepreneur Scheme" from the FY:2018-19 to supplement its growth strategy. These two schemes will have some unique features like low Debt Equity Ratio, low rate of interest, low processing fees, no collateral security for technically/professionally qualified entrepreneurs etc. In this connection, the Corporation had submitted a proposal to the GoA during the previous year for budgetary support to the tune of 50.00 crores for implementation of "Start up Assam" scheme and we are hopeful that the GoA shall provide the fund for implementation of the scheme from FY: 2019-20.

As an IT initiative, an online loan accounting software is under the process of implementation by the Corporation in its first phase with the support of AMTRON in association with KRAN consultancy services, Kerela, which will connect all the branch offices with centralized database under a secured environment. The system will consist of a vast MIS database which will serve as a ready monitoring tool for the improvement of performance of the Corporation. The Corporation has aimed to have complete automation of its various functions in its second phase in line with the Digital India initiative of Govt. of India and Assam.

Vision for future

I have a vision for AFC to make it a very efficient, healthy and customer friendly organisation, with strong emphasis on transparency, efficiency, productivity and self-sustainability. To achieve the goals, I wish to focus on the following specific areas in near future:

* Reduction of the non-performing assets by way of recovery, settlement, and sale;
* Improving ease of doing business for our valuable customers;
* Increase in efficiency with lower turnaround time (TAT) for loan approval and other important decision-making processes;
* Increase in productivity for cost effective return;
* Explore avenues for sourcing of low-cost fund for expansion of lending operation at competitive rate of interest and liberal terms & conditions;

During the FY 2018-19, the Corporation faced difficult phase due to low credit off take and growing NPAs. Which has affected the business prospect of the Corporation and resulted in overall decline of income of the Corporation. Therefore, the Corporation in its endeavour to enhance its business for building quality portfolio will focus on finding new area of financing and industrial development activities. Action plan is also drawn to contain NPAs. Therefore, we must explore the avenues for sourcing of fund at low cost and continue to take all strategic decisions at right time in most professional manner in the present highly competitive environment. I am confident that we will be able to successfully reverse the adverse trends because we have laid already strong foundations by virtue of our more than 60 years of existence towards socio-economic development of the state.

We plan to achieve the goals of our organization through our major strength - the Employees, the network of the branches and the Govt. of Assam, the main shareholder and therefore I would seek their continuous support and involvement in achieving our objectives. I, therefore, seek continued patronage of our valued customers, whole hearted effort & co-operation of our employees and support from the Govt. of Assam for the all-round success of our organization. I, express my sincere gratitude to the shareholders for the trust reposed on the Corporation. I am thankful to all our all stake holders and well-wishers who have contributed for the betterment of the organization. I am confident that the Corporation will be able to reach the greater heights during the coming years with the continued support of all.

Dated 30th July, 2019
( Nitin Khade, lAS)

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