Fusion Finance targets 10% of disbursements from individual loans in 2–3 years

The new product will comprise unsecured, non-joint liability group (JLG) loans, primarily targeting customers with annual incomes above Rs 3 lakh.

Garyali added that these products were nearly ready in Q1, but uncertainties from the West Asia crisis and monsoon led to the launch being deferred. “We plan to roll out them to existing customers by mid-Q2.”

He also explained about the customer profile to which these products are offered. “We have identified approximately 2.5–3 lakh customers who have been with us for at least three loan cycles (roughly 3.5–4 years), operate a business, and meet all eligibility guardrails.”

“We expect to onboard at least 20% of these 2.5 lakh customers, building an individual loan portfolio of around Rs 1,000 crore over the next 12 months.” The lender initially targets a ticket size between Rs 1.25-1.5 lakhs.

The lender expects deeper product offerings for its existing MFI customers and expansion of MSME and individual loans through its existing branch network to help it achieve the Rs 10,000 crore AUM target in FY27. Its AUM stood at Rs 7,702 crore as of June 30.

Under the credit guarantee scheme, the lender has sanctions of around Rs 1,000 crore, where it may avail Rs 600–700 crore at 9.25–9.30%, which is cost beneficial. As a result, it expects the cost of borrowing to come down by 15–20 bps going ahead, with margins remaining at the current level. The micro lender’s marginal cost of borrowing has decreased to 10.1% in Q1 from 10.3% a quarter ago.

In FY27, the financier has a borrowing requirement of Rs 7,000 crore. “We need to raise Rs 7,000 crore in FY27, of which Rs 1,600 crore has already been borrowed in Q1. We intend to gradually increase the share of PTC securitisation over the next two years,” said Garyali, adding that they are not looking at overseas borrowing due to higher hedging cost.