Satin Creditcare Network has plans to increase its retail micro, small and medium-sized enterprises portfolio to Rs 1,000 crore in the next two years from around Rs 250 crore currently, said its chairman and managing director HP Singh.
Following this, the microfinance loan company expects to grow its MSME book at a compound annual growth rate of 30-40%.
“The MSME segment is a very niche segment that we are trying to develop. We are only looking at the graduated microfinance customer to be given a higher ticket size loan,” Singh said.
“Any customer that has done a couple of cycles with a microfinance institution is eligible for a higher ticket size loan along with a collateral that is there like rural house, any immovable property. That is the segment that we are looking at,” he added.
The company disburses MSME loans through its subsidiary Satin Finserv. Currently, the lender is disbursing MSME loans at a monthly run rate of Rs 15-20 crore. The ticket size of these loans ranges from Rs 1 lakh to Rs 10 crore.
Satin Creditcare had a consolidated assets under management of Rs 9,115 crore as on March 31 and expects to grow its overall loan book at a compound annual growth rate of 25-30% for the next few years.
With asset quality concerns easing and loan demand sustaining, experts expect microfinance-focused non-banking financial companies to perform strongly in coming years.
Going ahead, Singh believes the acquisition of more customers in existing geographies, a 10-15% increase in ticket sizes to existing clients as well as an expansion into new geographies will drive the growth in the company’s loan book.
“Once the overhang of pandemic allayed, the income levels have started to come back, economy in the rural space has picked up, lockdown related challenges are now over. With an increase in economic activity and income levels, asset quality is much better now,” Singh said.
“Moving forward, our sense is that asset quality march will be positive for at least the next a few years given the manner in which economic activity has been shaping up,” he added.