Muthoot Microfin plans to cut risk by bringing down group micro loan share to 60% by 2030, says CEO Sadaf Sayeed

, one of India’s top three pure-play micro lenders, has drawn up a plan to bring down the reliance on and instead focus on to mitigate risks associated with the sector.

The subsidiary of Muthoot Fincorp, which is the flagship entity of Kerala’s , is planning to bring down the share of qualified microfinance assets to the regulatory minimum of 60% by 2023 from about 80% at present, chief executive told ET.

He also shared a plan to foray into two-wheeler financing around this year’s festive season as part of its diversification strategy.

In terms of the lender’s gross loan portfolio of Rs 14000 crore at the end of March, about 83% was micro loans given to joint liability group members.

The qualified asset metric is different from gross loan portfolio. The Reserve Bank of India last year reduced the qualifying asset criteria for NBFC-MFIs to 60% from the previous 85% to allow them business diversification.

In a roadmap to 2030 released Thursday, the lender said it would aim to grow its assets under management to Rs 30000 crore. At present, its product bouquet includes individual business loans, loans against property and gold loans.

The company forayed into gold loan only last year after the central bank eased the asset qualifying criteria.

Microfinance, a system of providing collateral-free loans mostly to women, had been suffering heavily over the last two years due to over lending to small borrowers. The market rebounded in the fourth quarter after seven consecutive quarters of portfolio contraction.