Top microfinance companies speed up bad loan write-offs to balance books
microfinance companies
are making
balance sheet cleansing
a priority in a bid to show a healthier portfolio amid the uptrend in
bad loans
. Listed entities such as
CreditAccess Grameen
,
Fusion Finance
and
Muthoot Microfin
went for early bad
loan write-offs
in the June quarter, in continuation of the strategy adopted since December last year.
Fusion has gone a step further. The Gurugram-based lender has revised its write-off policy.
Fusion chief executive officer Sanjay Garyali said the company has decided to strike off stressed loans from its
balance sheet
after 180 days of default from the June quarter, as a rule, moving away from the previous practice of write-off after 240 days of defaults.
by Taboola
by Taboola
Sponsored Links
Sponsored Links
Promoted Links
Promoted Links
You May Like
Villas For Sale in Dubai Might Surprise You
Villas In Dubai | Search Ads
Get Rates
Undo
"In the March quarter, we did an accelerated write-off after 180 DPD (days past due). In the June quarter, we have done the same. But it's no more an accelerated write-off. We have taken it as a policy change," he told ET.
Loans are marked as
non-performing assets
(NPAs) when borrowers fail to pay interest or principal for more than 90 days.
Live Events
Some microfinance companies write off loans after 240 days of default as a rule, while some even do it after a year of classifying them as non-performing. Any write-off before those datelines is termed "accelerated".
Muthoot Microfin, which normally writes off accounts which remain NPA for more than 365 days, did accelerated write-offs for loans in Karnataka as early as 120 days past due (DPD), as these accounts showed no signs of repayment, chief executive Sadaf Sayeed told ET.
Faster write-offs helped these companies report an improved gross non-performing assets ratio in the June quarter.
For Fusion, ₹486-crore write-off in the first quarter of the fiscal helped its gross NPA improve to 5.4% at the end of June from 7.92% three months prior to that. CreditAccess Grameen's GNPA stood at 4.70% compared with 4.76% over the same period. Muthoot Microfin's GNPA stood at 4.85% against 4.84%.
"An accelerated write-off journey, which commenced in Q3 FY25, is steadily driving us towards balance sheet normalisation," CreditAccess Grameen chief executive officer Ganesh Narayanan said in an analysts call on July 22.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
India Today
an hour ago
- India Today
Lord Swraj Paul, NRI industrialist and philanthropist, dies at 94
Leading NRI industrialist Lord Swraj Paul passed away in London on Thursday evening, family sources said. He was Paul, founder of UK-based Caparo Group of industries, had been taken ill and hospitalised recently, where he passed away surrounded by members of his House of Lords peer was born in Jalandhar and relocated to the UK in the 1960s in pursuit of treatment for his little daughter Ambika's cancer. After she passed away aged four years old, he set up the Ambika Paul Foundation as a charitable trust that went on to donate millions to promote the wellbeing of children and young people all over the world through education and health 'The London Zoo is where she was always the happiest,' recalled Lord Paul last month, during the annual commemoration he hosted at the Ambika Paul Children's Zoo in London – one of the major beneficiaries of the he lost his son Angad Paul in 2015 and his wife Aruna in 2022, he went on to undertake similar philanthropic endeavours in their memory.'This hall is a tribute to my wonderful wife whom I miss very much; we never had an argument during our 65 years of marriage,' said Lord Paul, when he inaugurated the Lady Aruna Swraj Paul Hall at the historic Indian Gymkhana Club in London in February 2023.A regular in the annual 'Sunday Times Rich List', this year he was ranked 81st with an estimated wealth of GBP 2 billion, largely derived from the steel and engineering multinational Caparo Group. Headquartered in London, Caparo operates internationally from over 40 sites, with operations based in the UK, North America, India, and the Middle East. His son, Akash Paul, is Chairman of Caparo India and Director of the Caparo year, in his capacity as the Chancellor of the University of Wolverhampton, Lord Paul awarded an honorary doctorate to Akash Paul for services to business administration.'Perhaps, I am the only graduate to get a degree from his own father, independently approved by the University Board, of course, I may add,' said Akash Paul, who was accompanied by wife Nisha and son Arush at the ceremony held at the London Zoo.'My son has worked alongside me at Caparo since 1982. Akash was appointed CEO of Caparo Group in 1992. During this time, he furthered Caparo's growth strategy in UK, Europe, USA and India, as well as expanding capacity and increasing profitability of the companies in the United Kingdom and was president, Caparo Automotive Espana, Spain and Executive Board, Bull Moose Tube, USA,' said Lord Paul, who had served as Chancellor of Wolverhampton University for over 26 active member of the Indian diaspora in the UK, Swraj Paul maintained his daily routine of attending the House of Lords despite his frailty in recent months."We pray for the departed soul. May the noble Lord rest in peace," said Lord Rami Ranger, his colleague in the Upper House of Ends
Time of India
2 hours ago
- Time of India
IMC, Guj think tank sign deal to promote net-zero housing, sustainable development
Indore: Indore Municipal Corporation (IMC) and the Unity of Nations Action for Climate Change Council (UNACCC) on Thursday signed a memorandum of understanding (MoU) that aims to provide 'net-zero housing' for families from the Below Poverty Line (BPL) and low-income groups, which will help save up to 30% on energy and fuel costs. The MoU was signed by mayor Pushyamitra Bhargava and `Unity of Nations Action for Climate Change Council' (UNACCC) founder-chairman Dr Rajat Sharma at a 'Conference on Sustainable Indore - A Model for Cities Around the World'. The event was attended by mayor and former Union minister Suresh Prabhu, who joined virtually. Indian Institute of Sustainable Development (IISD) Director General Dr Srikanta K Panigrahi was also present on this occasion. Mayor said that the conference was organised to brainstorm and prepare a roadmap for Indore's future. "Other cities in the country are working on Indore's cleanliness model, but we are now working on the next level of cleanliness," he said. He added that the city will work with public participation to make Indore a "net-zero" city by 2045 and 2070. IISD DG Dr Panigrahi praised Indore, saying that the city and its people have made cleanliness a part of their culture and life. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Passive Income Ideas Sitting at Home Mone Click Here Undo He added that Indore has brought pride to the nation and the state of Madhya Pradesh, which was made possible by the collective efforts of its citizens. UNACCC is a Gujarat-based Indian Public Policy Think Tank and Research Institute engaged to evolve a strategic framework for India, in identifying low carbon growth opportunities, Sustainable Development Goal 2030 implementation and facilitates a series of planned and scaled-up programmes. Suresh Prabhu, who joined the conference virtually, commended Indore's efforts, stating that the city is doing excellent work in air improvement, transport, and cleanliness. He also appreciated the work done for waste pickers in Indore. IMC commissioner Shivam Verma said that Indore has always been a leader in innovation and that the city's success is a result of its citizens' cooperation. He stated that the city is continuously working on new innovations in its waste management strategy and will adopt the ideas discussed at the conference to improve the city further. Stay updated with the latest local news from your city on Times of India (TOI). Check upcoming bank holidays , public holidays , and current gold rates and silver prices in your area.
Time of India
2 hours ago
- Time of India
Wipro to buy Harman's DTS business for $375 million
Bengaluru: Indian IT major Wipro entered into an agreement to acquire the Digital Transformation Solutions (DTS) business unit of Harman, a Samsung company, for $375 million. The deal will accelerate Wipro's mission to deliver next-generation engineering research and development (ER&D) services. The transaction, signed on Thursday, marks one of Wipro's largest acquisitions in the ER&D space. Through this deal, Wipro will gain full ownership of DTS, a US-based global provider of ER&D and IT services. This acquisition significantly expands Wipro's ER&D capabilities, strengthening its AI-driven digital and device engineering services—from design to manufacturing—across key sectors such as technology, industrial, aerospace, healthcare, and consumer industries. As part of the acquisition, the Bengaluru-headquartered firm will enter into a multi-year strategic agreement with Harman and Samsung, further deepening the relationship and creating new avenues for joint growth and transformation. Upon completion of the acquisition, DTS will be integrated into Wipro's engineering global business line. You Can Also Check: Bengaluru AQI | Weather in Bengaluru | Bank Holidays in Bengaluru | Public Holidays in Bengaluru | Gold Rates Today in Bengaluru | Silver Rates Today in Bengaluru Wipro CEO Srini Pallia said, "Their specialised engineering expertise, combined with Wipro's consulting-led, AI-powered capabilities, will significantly enhance the value we deliver to clients. DTS's strong presence in high-growth sectors and strategic markets complements our global footprint and strengthens our position as a trusted transformation partner. Together, we'll accelerate digital innovation, reduce time-to-market, and sharpen competitive advantage. " The acquisition will be completed through a cash consideration, with closure expected by the end of this year, subject to regulatory and antitrust approvals in the United States and other jurisdictions. By combining DTS's personalised, high-touch service model with Wipro's global scale, robust technology ecosystem, and deep resources, the deal offers clients the best of both worlds: the agility and specialisation of a niche provider, alongside the reach and capabilities of a global leader. Its ER&D offerings include embedded software, digital engineering, design thinking, and device engineering, while its IT services span cloud and infrastructure, data analytics and AI, enterprise automation, and customer experience. The company operates in 14 countries, including India, the US, South Korea, the UK, Poland, and Germany, with a workforce of over 5,600 employees. DTS reported consolidated revenues of $315 million in calendar year 2022, $308 million in 2023, and $314 million in 2024. In 2024, approximately 85% of the revenue came from services, with the remaining 15% from products. Christian Sobottka, CEO of Harman, said, "This agreement unlocks the next chapter for the DTS business unit—one where it can scale faster, reach more clients in key industries, and fully realise its growth potential. As part of Wipro, a company with deep engineering prowess, DTS will have the complementary capabilities and ecosystem needed to expand its impact and accelerate the value it delivers to customers." Stay updated with the latest local news from your city on Times of India (TOI). Check upcoming bank holidays , public holidays , and current gold rates and silver prices in your area.
