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Comprehensive SWOT Analysis of Ujjivan Financial Services – A Financial Services Providing Company

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We previously discussed the SWOT Analysis of BNP Paribas, one of the world’s largest banks committed to a sustainable economy. This time, we’ll go through the SWOT analysis of Ujjivan Financial Services in extensive detail.

The goal is to provide you with information about Ujjivan Financial Services’ entry into the banking business through the Ujjivan Small Finance Bank, which offers a variety of financial services to the economically active poor in urban areas who were not adequately served by financial institutions.

Marketing efforts are one of the variables that contribute to the organisation’s growth. Marketing is evolving as the world moves online, and if you are interested in learning digital marketing, check out our Free MasterClass on Digital Marketing 101 taught by Karan Shah, the CEO and Founder of IIDE.

In this article, we’ll look at Ujjivan Financial Bank’s strengths, weaknesses, opportunities, and threats. Before we get started, let’s get to know the company, its history, products, services, and financial success.

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About Ujjivan Financial Services

SWOT Analysis of Ujjivan Financial Services

Ujjivan Financial Services Limited began operations as a non-banking financial company (NBFC) in 2005 founded by Mr Samit Ghosh to offer a comprehensive range of financial services to the economically active poor who are underserved by traditional financial institutions.

They were the country’s largest SFB in terms of geographical reach, with operations in 24 states and union territories, as well as 209 districts across the country. Ujjivan’s previous business plan was to provide collateral-free, small-ticket-size loans to economically engaged impoverished women using a joint liability group lending arrangement. Individual loans to Micro and Small Businesses were also available (“MSEs”). Ujjivan had taken an integrated strategy to lend, combining microfinance’s high consumer touchpoints with technology infrastructure and back-end support similar to a retail bank. 

Ujjivan Small Finance Bank Limited is an Indian small finance bank focused on the mass market, catering to financially unserved and underserved areas and devoted to increasing financial inclusion in India. Their Promoter, Ujjivan Financial Services Limited (UFSL), began operations as a non-banking financial company (NBFC) in 2005 to provide a full range of financial services to the “economically engaged poor” who were underserved by financial institutions. UFSL acquired RBI In-Principle Approval to establish a Small Finance Bank (SFB) on October 7, 2015, after which it established Ujjivan Small Finance Bank Limited as a wholly-owned subsidiary. 

As of June 30, 2019, Ujjivan Small Finance Bank had a varied portfolio with branches in 24 states and union territories and a client base of 4.72 million. They feature a mobile banking application that is available in five languages, as well as an internet banking facility for individual and business users, in addition to their network of branches, ATMs, and Automated Cash Recyclers. Their goal is to leverage technology to help their clients by allowing them to personalise and provide products and services that are designed for specific needs.

Quick Stats on Ujjivan Financial Services
Founder Samit Ghosh
Year Founded 2004
Origin Bengaluru, India
No. of Employees 16,896+
Company Type Public
Market Cap Rs 1,692.54 Crore (2022)
Annual Revenue Rs 140.52 Crore (2021)
Net Income/ Profit Rs 151.22 Crore (2021)

 

Products & Services by Ujjivan Financial Services

Here are some products and services Ujjivan Financial Services has to offer:

  • Personal Banking
  • Online Banking
  • Fixed Deposits (FD)
  • Recurring Deposits (RD)
  • Micro Loans
  • Home Loans
  • Small Business Loans


Competitors of Ujjivan Financial Services

As a small financing bank, Ujjivan Small Finance Bank faces the following competitors:

  • Equitas
  • Jana Finance
  • Muthoot Microfin
  • AU Bank
  • Bajaj Finserv


Now since we learned about the bank, let us have a look at the SWOT Analysis of Ujjivan Financial Services.


SWOT Analysis of Ujjivan Financial Services

SWOT analysis of Ujjivan Financial Services is an examination of the company’s strengths, weaknesses, opportunities, and threats. This allows the organisation to understand its market position, as well as what areas need to be addressed and where it can shine. It also aids the corporation in strategizing its business framework and elements affecting its growth.

To better understand the SWOT analysis of Ujjivan Financial Services, refer to the infographics below:

SWOT Analysis of Ujjivan Financial Services - SWOT Infographics of Ujjivan Financial Services

Below is a step-by-step detailed guide to help you with the SWOT analysis of Ujjivan Financial Services.

Strengths of Ujjivan Financial Services

Ujjivan Financial Services, being one of the industry’s leading corporations, has several advantages that enable it to prosper in the marketplace. These advantages not only assist it in retaining market share in existing areas but also in expanding into new ones.

  • Broad Geographical Reach: Ujjivan Financial Services Ltd has a large dealer and associate network that not only assists in providing efficient services to clients but also assists in managing the challenges faced by the consumer Financial Services industry.
  • First Mover Advantage: Although the financial services sector is saturated, Ujjivan Financial Services has the first-mover advantage because it was one of the first companies to start small finance banks in India following the RBI accord.
  • Multiple Revenue Streams: Ujjivan Financial Services Ltd has dabbled in a variety of industries outside of the financial sector throughout the years. As a result, the company has been able to diversify its revenue sources beyond the Financial sector and the Consumer Financial Services section.
  • High-Profit Margins – Despite facing downward profitability pressure, Ujjivan Financial Services Ltd still has larger profit margins than its competitors.
  • Broad Range of Portfolio: One biggest strength that Ujjivan Financial Services has is that it offers a wide range of financial and consulting services to its customers ranging from investment banking, asset management, private banking and insurance.
  • Automation of Activities: Successful automation of banking activities with a well-developed IT structure and Infrastructure has made the overall efficiency better.    
  • Talent Management – Human resources are crucial to Ujjivan Financial Services Ltd’s growth in the Consumer Financial Services market. The company employs a highly qualified team. This is due to their outstanding training and education programmes.
  •  


Weaknesses of Ujjivan Financial Services

A company’s weaknesses keep it from realising its greatest potential. To assist the company to excel in all areas, one should assess the weaknesses and seek to improve them. 

  • Cash Flow Problems: There is a lack of proper monetary planning at Ujjivan Financial Services in regards to cash flows, leading to certain situations where there isn’t suitable cash flow as needed leading to unnecessary unplanned borrowing.
  • Need to Invest More in New Technologies: According to the country’s scale of expansion and the geographical areas Ujjivan Financial Services needs to invest more funds in technology to coordinate the processes across the board. Currently, the investment in technology is not on par with the vision of the company.
  • Depend on India & Southeast Asia: Ujjivan Financial Services’ global presence is not up to the mark. The bank is dependent more on the Indian & South Asian regions. Also, Ujjivan Financial Services lags behind the top Southeast Asian financial institutes in terms of several branches. 
  • Customer Service: Improper customer service, as well as a lack of solving customer queries, can cause a negative image of the brand. This can either be through mouth publicity or by any other means.
  • Lack of Coverage in Rural Areas of Financial Products: It has been revealed that the financial service industry focuses more on urban areas in most countries, while rural regions are ignored. In the financial sector, this is a considerable weakness.


Opportunities for Ujjivan Financial Services

Opportunities are external variables that work in the company’s favour, and the company can take advantage of them to grow.

  • Moderate Growth Rate: Following a moderate growth rate in the business, a financial uptick and increase in client spending provide an opportunity for Ujjivan Financial Services to attract new clients and increase its share of the total industry.
  • Global Opportunities: A major opportunity for financial service players in the Indian market is the global financial service market, it is inarguably that the global market is worth billions of dollars. Ujjivan Financial Services is mainly focused on the Indian market, so it needs to increase its reach outside the Indian market as well making it gain more customers.
  • Development of Technology: Since the FinTech industry is growing at a very rapid pace, there are advancements in technologies too. Using these kinds of technologies can increase efficiency and decrease cost.
  • Interest Rate: Lower interest rates than compared to previous years provides an opportunity for Ujjivan Financial Services to undergo expansion projects that are financed with loans at a cheaper interest rate.
  • Low Inflation Rate: The low inflation rate can bring more stability to the market and enable credit at a lower interest rate to the customers of Ujjivan Financial Services.


Threats to Ujjivan Financial Services

Threats are external elements that may have an impact on the bank. To avoid inflicting damage to the company, these concerns should be addressed as quickly as feasible. The threats to Ujjivan Financial Services are as follows:

  • Global Competitors: If Ujjivan Financial Services wants to expand its business around the world, they have to be careful of what policies they make or how they provide its services in the foreign market or how they market itself, where already existing local banks are what the people trust in. 
  • Increased Marketing Efforts: Due to the rise of digital marketing, there is an increasing number of promotional messages are being sent by competitors. It clutters up the space, which leads to losing out on customers. Ujjivan Financial Services is well versed and trying to adopt a variety of the latest digital marketing skills to get ahead of the competition. You must also check out these skills to achieve the same.
  • Financial Risks: Because the company operates in several countries, it is subjected to currency fluctuations, which are exacerbated by the world’s increasingly volatile political climate in a variety of industries.
  • Lack of Proper Cyber Security Systems: The current financial industry relies entirely on the cyber-world. Whether it is data storage, monetary transactions, or personal information, everything is stored digitally. This makes the financial sector a primary target for hackers who are seeking to benefit financially by leveraging flaws in the financial’s digital infrastructure. Institutes need to take effective cybersecurity steps to safeguard their records, they will face a significant cyberspace threat.


Now that we have come to the end of this thorough SWOT Analysis of Ujjivan Financial Services. Let’s see the summation of this article in the conclusion.

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To Conclude

Ujjivan Financial Services is a well-known financial services firm with a global reach. The SWOT analysis of  Ujjivan Financial Services revealed that the firm is strongly reliant on its consumers and has great brand recognition and trust. It has a strong sustainable foundation and has a presence in all of the areas it services, but profits and losses have been variable in recent years.

With rising competition in a saturated industry like finance, corporations are left to fight it out by improving their marketing efforts to win over their customers. Being well-versed in digital marketing is a requirement for all marketing enthusiasts in today’s shifting scene, where it is of vital significance. If you want to learn more and improve your skills, take a look at our 3 Months Advanced Digital Marketing course where you can learn everything about digital marketing in-depth just like this case study. 

We hope this blog on the SWOT Analysis of Ujjivan Financial Services has given you a good insight into the company’s strengths, weaknesses, opportunities, and threats. You can also read our comprehensive study on the SWOT Analysis of JP Morgan Chase.

If you enjoy in-depth company research just like the SWOT analysis of Ujjivan Financial Services, check out our IIDE Knowledge portal for more fascinating case studies.

Thank you for taking the time to read this, and do share your thoughts on this case study of the SWOT analysis of Ujjivan Financial Services in the comments section below.

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