CreditAccess Grameen is planning to increase its non-microfinance portfolio to 10-15% in the next four-to-five years from 1.6% currently.
“We have a large number of customers that have been with us for more than four years, who need higher funding for their business. Since last year, we are focussing on increasing our non-microfinance loans,” said managing director Udaya Kumar Hebbar.
The company is also focussing on two-wheeler loans and affordable housing loans. While a pilot of two-wheeler loans was launched in the third quarter of the previous financial year, affordable housing loan segment will be launched this year.
The company aims to largely target existing customers or the customer ecosystem through these loan segments.
“We do not want to do a dealer-driven business (in two-wheelers). These loans will be only provided to our existing loyal customers,” he said.
In March 2022, Reserve Bank of India (RBI) increased the ceiling on non-microfinance loans to 25% from 15% earlier.
With a gross loan portfolio of Rs 22,488 crore, CreditAccess Grameen is the large microfinance company in the country. The Bengaluru-based company’s loan book rose 36% year-on-year as on September 30.
Net interest margin rose to 13.1% in the September quarter from 12% a year ago.
The non-bank lender expects its gross loan portfolio to grow at 24-25% y-o-y in the current financial year. It expects margins to be at 12.7-12.8%.
“As each year passes, the growth percentage for non-microfinance will be higher even as the total growth will b in line with the guidance,” he said.
In addition to this, the company is focussing on maintaining portfolio quality, audit controls, risk controls, and compliance. It is also looking to diversify its liability franchise by reducing reliance on bank borrowings, and increasing foreign borrowings.
Term loans comprise nearly 53% of the company’s overall borrowings. Foreign borrowings constitute 18.4% of the overall mix.
When asked whether the company harbours aspirations to become a bank, Hebbar said that the liability franchise is very strong and hence, there are no plans in the regard for the next five years atleast.
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