#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;}
.onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px}
#sr_widget.onDemand .sr_desc{margin:0 auto 0;}
#sr_widget.onDemand .live_stock p a{color: #fff;;}
#sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;}
#sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important}
#sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%}
#sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;}
Edited excerpts:
.bgBig{border-bottom:0;padding:20px 0 0 0;}
.bgBig a.bglink{font-family:Faustina;font-size:20px;font-style:normal;font-weight:600;line-height:normal;border-bottom:0;}
The microfinance market has shown signs of revival. Yet, unsecured lending has its challenges, as it goes through cyclical stress in quick successions. What would be your business strategy going forward?
Our microfinance book today stands at 82% of the total assets under management and the balance 18% is . Microfinance today can go all the way up to around Rs 1.75 lakh and retail unsecured business loans can go up to Rs 2.50 lakh. We are also giving secured business loans which are anything beyond Rs 2.5 lakh. Along with this, we have built two more products — one is home, second is two-wheeler.
Today, our secured book is very small… roughly around 10% of our retail finance book. As we move forward, we believe in the medium term, we should be able to show 10% share moving to 35-40% towards the in the retail finance pie.
a:hover{text-decoration:none;}
.liveEventMain_widget{margin-top:15px;padding-top:24px;border-top:2px solid #000;position:relative;font-family:Montserrat;}
.liveEvent_slider{position:relative;overflow:hidden;}
.liveEvent_slider ul{white-space:nowrap;list-style:none;margin-top:12px;}
.liveEvent_slider ul.sliderContainer{margin-bottom:30px;}
.liveEvent_slider ul li{white-space:normal;width:282px;vertical-align:top;display:inline-block;margin-right:12px;border-radius:12px;box-shadow: 0px 4px 12px 0px #2407461F;background-color:#fff;overflow: hidden;}
.images_wrap{position:relative;}
.images_wrap .cover_img{object-fit:cover;object-position:center;border-top-left-radius:4px;border-top-right-radius:4px;}
.images_wrap .author_img{position:absolute;left:10px;top:13px;border-radius:10px;}
.images_wrap::before{background-image: linear-gradient(180deg, rgba(11, 11, 46, 0) 20.31%, rgba(11, 11, 46, .6) 61.46%, #0b0b2e);content: “”;height: 100%;left: 0;position: absolute;right: 0;width: 100%;}
.liveEventMain_widget .details{padding:12px;}
.liveEventMain_widget .category{font-size:12px;line-height:14px;font-weight:700;color:#6a11b0;margin-bottom:8px;}
.liveEventMain_widget .course_name{font-size:16px;line-height:20px;font-family:Faustina;-webkit-line-clamp:2;overflow:hidden;height:40px;display:-webkit-box;-webkit-box-orient:vertical;font-weight:600;color:#000;}
.liveEventMain_widget .details .author_name{font-size:13px;line-height:16px;color:#333;font-weight:400;margin-top:4px;-webkit-line-clamp:2;overflow:hidden;height:32px;display:-webkit-box;-webkit-box-orient:vertical;}
.liveEventMain_widget .view{border: 1.5px solid #D51131; display: block; padding: 8px 0; text-align: center; border-radius: 4px; font-size: 14px; line-height: 16px; color: #D51131; margin-top: 12px; width: 100%; font-family: Montserrat; font-weight: 600; cursor: pointer;}
.liveEventMain_widget .view span{display: inline-block; width: 6px; height: 6px; border-top: 1.5px solid #ed193b; border-left: 1.5px solid #ed193b; transform: rotate(90deg); position: relative; left: 5px; top: -2px;}
.liveEventMain_widget .view span::after{content: ”; display: inline-block; width: 11px; border-top: 1.5px solid #ed193b; transform: rotate(45deg); position: absolute; top: 3px; left: -2px;}
.liveEventMain_widget .arrow_btn{width: 26px; height: 25px; position: absolute; z-index: 11; background-size: 312px; cursor: pointer;}
.liveEventMain_widget .nextprev-btn{display:inline-block;width: 100%; position: absolute; top: 59%;}
.liveEventMain_widget .prev-btn{background-position: -212px -2px;left: -12px;}
.liveEventMain_widget .next-btn{background-position: -241px -2px; right: -3px;left:unset;}
.liveEventMain_widget .arrow_btn.disable{opacity:0.5;}
.liveEventMain_widget .ts-dots{display:inline-block;position:absolute;top:34px;right:10px;}
.liveEventMain_widget .ts-dots ul{display:inline-block;}
.liveEventMain_widget .ts-dots li{width:7px;height:7px;border-radius:50%;background-color:#cdcdcd;margin:0 2px;display:inline-block;}
.liveEventMain_widget .ts-dots li span{display:none;}
.liveEventMain_widget .ts-dots li.active{background-color:#ed193b;}
.liveEventMain_widget .topContain {
display: flex;
align-items: center;
gap: 6px;
}
.liveEventMain_widget .topContain .imgBox {
max-width: 40px;
}
.liveEventMain_widget .topContain .logoTitle {
font-family: “Montserrat”, “Verdana”;
font-weight: 700;
font-size: 20px;
line-height: 100%;
}
.liveEventMain_widget .topContain .logoSubTitle{
position: relative;
font-size: 18px;
font-weight: 500;
line-height: 1.2;
color: #747474;
margin-left: 24px;
}
.liveEventMain_widget .topContain .logoSubTitle:before{
content:”;
position: absolute;
left: -13px;
top: 0;
width: 1px;
height: 100%;
background-color: #838383;
}
.liveEventMain_widget .liveEvent_slider .liveEventCardContainer{
}
.liveEventMain_widget .liveEvent_slider .liveEventCardContainer .liveEventCard{
display: flex;
}
.liveEventMain_widget .liveEvent_slider .liveEventCardContainer .liveEventCoverImg{
}
Live Events
We may no longer be viewed strictly as a microfinance player, but rather as a broader . This shift reflects our evolution from a pure-play microfinance lender into a diversified provider of financial solutions for low-income households.
As you plan to grow the secured lending portfolio, does that mean you will be slowing down growth in microfinance loans?
Like I said, diversification is now becoming a need because we want to evolve with the customer, not necessarily because we don’t want to do microfinance. Microfinance will continue to be a significant portion of our business…it will be a funnel. You bring in a large set of customers into microfinance, you pick the right ones and graduate them. So you will have two engines that will give you power to grow.
Together as a company, we should be able to give 20% plus CAGR over the medium term. But in microfinance, growth will keep tapering down. In our plan, microfinance will actually take a lower growth going forward… maybe 10 to 12% per year is what we anticipate. We will scale up retail business much faster… retail growth will be upward to 40-50% year-on-year since the base is low.
What is the medium term business goal?
Our medium-term goal is to become a Rs 50,000 crore company by calendar year 2028. Out of this, we believe at least 25 to 30% share will be retail finance. And the rest will be microfinance. If I further look at another few more years down the line, probably this will change. We will move towards 40% retail and 60% microfinance.
As per the latest qualifying assets criteria for NBFC-MFIs, the microfinance portfolio has to be 60% of the total assets. Will this be a hindrance in your future strategy?
Our plan is to expand all these businesses. The vehicle is immaterial after a certain point of time. It’s only a question of what licence you have, right? So we are not stopping it for the sake of license. As the business grows, we will evolve strategies of what is the vehicle we want to carry. Up to 40% there is clear room. That means at least for the next two years, there is no worry. We are also talking to banks for co-lending and partnerships for expanding the retail book.
The regulatory prescription may not necessarily be a bottleneck. There are ways to navigate it. We can do securitisation / co-lending. We can manage it to a certain extent. And at a certain point of time, we can evaluate what is the licence that we would like to hold. So in the long term aspiration, we want to be a diversified financial services company, especially focusing on financial inclusion space. It can be microfinance, non-microfinance, it doesn’t matter. We want to be a sizable player with a diversified book, predominantly focusing on acquiring customers through microfinance and then kind of graduating them to retail customers over a period of time.
In the secured lending space, is home loan going to give you a critical mass? Will you be open to exploring inorganic opportunities?
In mortgage-backed lending, we first started with loans against property, which is a secured business loan. For the last 18 months, we have also been doing home finance. We have seen very strong demand for home loans. Everywhere we go in our core states, rural construction is massive. Once customers reach a certain level, their first choice is to improve their home or build a home.
Initially, we did not want to do co-lending or anything. We wanted to do it ourselves. Because we first wanted to understand the trade. So I think that this journey we have kind of completed, it has held really well. For example, the mortgage book for us in Karnataka, even during the peak of the crisis when the affordable home players suffered, had absolutely no impact on us. The only difference between others and us is the vintage that the customer spent with us and an understanding of this customer profile. So we believe this can be a very good growth engine for us.
Roughly, if you want to understand, approximately around 5,000 mortgage loans get booked out of my 4.5 million customers every month. We are talking about Rs 125-150 crore of opportunity within my customers segment itself, which I’m catering today. I’m doing roughly around Rs 25-30 crore of mortgage loans per month at this point of time. So the first attempt is to get that Rs 125-150 crore.
I think now we are in an acceleration space. So we will start growing much faster over the next few years in mortgage. Now that we know this business quite reasonably well, we are also open to see if there are any opportunities which will accelerate the growth. So that means that I don’t have to worry about opening more branches for the mortgage business. I don’t have to worry about expanding step by step. We can integrate well and we can actually accelerate this much faster.
In that direction, we will look out over the next one or two years for an opportunity to see if there is a good mortgage player that goes hand in hand with us to give us that acceleration possibility. And something like that also gives you an advantage of both capital usage as well as refinance. That is a key driver for us to even look at this opportunity.
Have you started the process of identifying the likely partner?
Not yet. Most likely in this financial year, we will look at some opportunity if it comes our way.
Will be looking at opportunities essentially in the southern market or Pan-India?
See, ideally it should complement where we are. Because what I said is we want to do more with our own customers. No other HFC has this advantage. If you are a standalone HFC, you don’t have an existing customer base, you want to churn. But as a microfinance company, since I have 45 lakh customers, then I have a huge opportunity to churn my own customer base. I don’t have to depend on DSAs.
Businesses that we do, even two-wheelers today, we don’t sit in the dealership. We take our customer to the dealer, hence we don’t pay any commission. So similarly, I don’t see a need for a DSA for our mortgage business because we have a very large field force, we have a large customer base. An ideal partnership or an opportunity would be somebody who will complement the states that we are in. That means if they have core operations in Karnataka, Maharashtra, Tamil Nadu, or MP, then it is a good marriage in my opinion.
On the retail side, what is the possibility of exploring other asset classes like gold loans?
We have picked up a few growth engines, which are very early at this point of time. So, doing too many things may also not work out in our favour. We want to scale up a few more things, maybe a couple of years down the line. We can pick up something like light commercial vehicle loans, which is also a strong recommendation from our customer segments. We can also look at gold. We did try gold once, but we were not able to scale up because of the presence of our branch locations. Customers cannot travel 25-50 kilometres to mortgage gold. The branches have to be in locations where trade is happening.
As you are planning an acquisition, do you need fresh capital infusion?
Against a regulatory capital requirement of 15%, we are at 26%. Our own internal policy is 20%. We will not go below 20%. As long as we are growing within 20-25% range, our existing capital is good enough. The new profits that we generate will augment the capital further. And we are more like in a self-sustaining mode, I would say. However, capital would be required if we are looking at inorganic growth. When something materialises, we would need additional capital.
What is your borrowing plan this fiscal?
I think our borrowing strategy has worked extremely well for us over the last few years. I think we are one of the few NBFCs who has bank borrowings, domestic dependability less than 60%. So we have around 55% dependency on domestic bank lending. And we have been able to do roughly around 24% of international borrowing at this point of time. That’s a journey that we took a few years back, because we knew that at some point of time, banks will hit their individual lending limits. They will have total limits and you will have all these cycles and banks typically lend because of RBI guidelines matching the tenor of your lending to the customer. So hence it becomes ALM neutral.
I think this year, we roughly need around Rs 19,000 to 20,000 crore. And out of which also we believe a strong amount, roughly around Rs 3,000 crore should come from international markets. It helps us on two aspects. One, it gives you better asset liability management. Second, it reduces pressure to borrow from domestic sources. That will also give you better borrowing rates.
There are talks of a possible exit of some investors at the promoter level. How would that change the narrative in terms of growth and business expansion?
You have to understand that the promoter is a holding company and there are many investors with them for a long period of time. But in all my discussions with the promoters, they are pretty serious about continuing with CreditAccess. That is our strength. And we believe that they will be long term. But they are open to bringing in strategic partners. Their primary objective is to bring somebody strong enough so that they can give exit to some of the small investors who have been with them for a long time and also give us that kind of strength and a little more power to take care of our growth aspirations. So any good strategic partner will actually add to the strengths of the company.
You know that the promoter has a life insurance license. They have been under the same holdco. They have already done two years of business. They are trying to start a company. So they have aspirations around CreditAccess itself. This segment is something that they have liked for a long time and they are committed to stay long is what all my discussions with the company promoters have.
In all likelihood, we will be able to get some strategic partners in the holdco, which will give us more power and strength to move forward.
#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;}
.onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px}
#sr_widget.onDemand .sr_desc{margin:0 auto 0;}
#sr_widget.onDemand .live_stock p a{color: #fff;;}
#sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;}
#sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important}
#sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%}
#sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;}
.Pbannertext{display:flex;align-items:center;font-size:16px;font-weight:600;font-family:’Montserrat’;}
.Pbannertext img{height:20px;margin:0 6px}
.Pbannerbutton a{display:flex;align-items:center;background-color:#fff;color:#ec1c40;text-decoration:none;font-weight:600;padding:4px 8px;border-radius:6px;font-size:15px;font-family:’Montserrat’;}
.Pbannerbutton img{height:20px;margin-right:6px}
.Pbannerbutton a:hover{background-color:#f7f7f7}
as a Reliable and Trusted News Source
(You can now subscribe to our )