CreditAccess Grameen expects around 25% growth on loan sales in FY24

The largest microfinance lender CreditAccess Grameen is expecting around 25 per cent on-year growth in loan sales, taking the overall assets to around Rs 27,000 crore this fiscal.

The company closed FY2022-23 with a loan book of Rs 21,000 crore and a net income of Rs 830 crore, which it expects to jump 75 per cent on year to Rs 1,300-1,400 crore this fiscal, as it expects the margin to continue to firm at the current level of 10-12.5 per cent, the microlender's managing director Udaya Kumar Hebbar told PTI on Tuesday.

In the June quarter, it booked 151.5 per cent growth in net income at Rs 348 crore on lower provisioning as the asset quality improved.

Overall loan book of the Bengaluru-based lender grew 39.7 per cent to Rs 21,814 crore from Rs 15,615 crore a year ago and Rs 21,000 crore in March 2023. Total income rose 53.9 per cent to Rs 1,170.7 crore, and the key net interest income rose 65.4 per cent to Rs 763.3 crore.

CreditAccess Grameen started off as an NGO, T Muniswamappa Trust in 1999 and subsequently got converted into a microfinance firm in 2007, and went public in 2018 with a Rs 400 crore IPO. It's majority owned by the Dutch firm CreditAccess holding 73.74 per cent stake.

Today it serves over 44 lakh customers through 1,826 branches across 353 districts in 15 states.

"We expect to grow our loan book by 24-25 per cent this year to Rs 26,500-27,000 crore from Rs 21,000 crore in March 2023. I also expect the net income to clip at a much higher rate of around 75 per cent to Rs 1,300-1,400 crore by March as I see the margin remaining steady at 10-12.5 per cent and asset quality to improve further from the June quarter when gross NPAs declined to 0.89 per cent from 3.11 per cent and net NPAs plunged to 0.27 per cent from 1.15 per cent.

"Normally 30-35 per cent of the incremental loan growth comes in the first half, and the rest in the second half and the first quarter growth and so far in the second quarter are in line with our guidance.

Hebbar also expects the incremental customer addition to be 1 lakh per month or around 15 per cent more for the full year. Currently, our customer base is 44.23 lakh.

On the second public issue of NCD which is hitting the market on Thursday, he said the primary aim is to diversify the funding base which is dominated (56 per cent) by banks, 20 per cent from ECBs (with an outstanding of around Rs 3,500 crore), 10-12 per cent from developmental institutions like Nabard and Sidbi, and 5 per cent from NCDs, which on completion of the current Rs 1,000 crore issue will be over 7 per cent. The short-term objective is to increase this to 10-12 per cent, Hebbar said. its borrowings stand at around Rs 17,000 crore now.

Last November it entered the publicly issued NCD market with a Rs 500 crore..

The microlender, which has been offering only collateral-free loans to women, is also entering the secured lending side with home, auto and gold loans along with SME funding.