IIFL Finance is looking to increase its co-lending book to Rs 15,000 crore by March 31 from Rs 10,576 crore currently. “The co-lending book will grow steadily from current levels,” said founder and chairman Nirmal Jain.
Currently, the company has 15 co-lending partners including DCB Bank and State Bank of India. The non-bank lender’s co-lending book rose 125% year-on-year(y-o-y) as on September 30. In comparison, the consolidated loan assets under management rose 32% y-o-y to Rs 73,066 crore.
He added that IIFL’s assets under management has been rising at 25% a year and it plans to continue growing at the same pace.
In the September quarter, the non-bank lender has witnessed a sizeable growth in the microfinance and digital loan segment. “In digital loans, our focus is on MSME loans and we have been building the model for the last 7 years. These loans are end-to-end digital. As digital infrastructure grows, this business can grow faster,” he said.
While the digital loan segment constitutes a mere 5% of the overall loan portfolio, it rose 77% y-o-y to Rs 3,539 crore as on September 30. But, gross non-performing asset ratio of the segment was relatively higher at 3.22% as on September 30.
“Delinquencies on digital loans tend to be higher because the ticket size is small and the loans are unsecured. The interest rate on these loans is also higher so the risk is priced in,” he said. The company is raising its credit score threshold for borrowers in order to reduce delinquencies in the digital loan segment. Going ahead, the segment is expected to grow a further 40-50% by the end of this financial year.
Separately, the high-margin microfinance loan segment also rose 67% y-o-y to Rs 11,307 crore as on September 30.
IIFL plans to expand its branches in microfinance and growing the business organically. While the business had gone down during COVID-19, it has been growing rapidly since then,” he said.
“There is a long trajectory for growth in the microfinance business and we are focussing on areas or districts where penetration is still poor,” he added.
The company lends to microfinance borrowers through its subsidiary IIFL Samasta Finance, formerly known as Samasta Microfinance. IIFL Finance is planning to raise around Rs 2,000-3,000 crore in the next one year through a qualified institutional placement. A portion of this may be used to boost the microfinance business.