Latest news with #MuthootMicrofin
The Hindu
2 days ago
- Business
- The Hindu
Tamil Nadu's microfinance gross loan portfolio declines 23.5% at the end of June
The Gross Loan Portfolio (GLP) of the microfinance industry in Tamil Nadu declined 23.5% to ₹43,700 crore at the end of the first quarter of 2025-2026, from ₹57,100 crore in the comparable period last year. Meanwhile, microfinance industry players said there has been no major impact from the State government's law enacted to prevent coercive recovery of micro-loans by money-lending entities. According to CRIF High Mark, a credit bureau, Tamil Nadu's gross loan portfolio declined 6.7% on a quarter-on-quarter basis from ₹46,800 crore as of March 30, 2025. The Tamil Nadu Money Lending Entities (Prevention of Coercive Actions) Act, 2025, was notified in June 2025. The provisions of the Act relating to coercive action against borrowers also apply to non-banking financial companies registered with the Reserve Bank of India and co-operative banks and societies. 'After minor initial hiccups due to the ordinance passed by Tamil Nadu, the situation is back to normal in Tamil Nadu. There was no impact on collections due to the ordinance, and Tamil Nadu continued to perform well. The implementation of stricter guardrails by self-regulatory organisations has impacted disbursements; at the same time, portfolio quality has improved. Things are looking better for the industry,' Sadaf Sayeed, CEO, Muthoot Microfin, said. His company has a ₹3,200 crore microloan portfolio in Tamil Nadu. Jiji Mammen, executive director and CEO of Sa-Dhan, a self-regulatory organisation for the microfinance industry, said there is no major impact on the ground due to the Act enacted by the State government. 'There were cases in a few pockets where some people trying to take advantage of the Act. But now the collections are near normal. Overall, things are looking better for the microfinance industry in the country and a more clearer picture would emerge by the end of second quarter,' he said. All states except West Bengal registered double-digit declines in gross loan portfolio in June 2025, with sharpest reductions observed in Odisha (-24.7%), followed by Tamil Nadu and Karnataka (-22.9%), CRIF said.
Economic Times
7 days ago
- Business
- Economic Times
Q1 disbursement dip seen as temporary; Q2 growth expected with new loans : Sadaf Sayeed
"This is a positive trend. Among customers with less leverage—either unique to us or with us plus one other trade line—the repayment track record is almost 97-98% on time. So, the guardrails have been quite helpful for the industry's health and have had a positive impact," says Sadaf Sayeed, CEO, Muthoot Microfin. ADVERTISEMENT What has been the impact of the Mfin and can you quantify by when you expect an improvement in the overall business performance trajectory? How do you see the business evolving, and when do you expect it to improve further? Sadaf Sayeed: To answer your question, this is actually the second version of the guardrails implemented by Mfin. The first set of guardrails was introduced in August 2024, and subsequently, guardrail 2.0 was implemented starting April 1st. The impact has been positive for the industry. From an industry perspective, the percentage of borrowers with multiple loans — defined as those having more than four loans — was around 20%, which has now come down to approximately 8%. At Muthoot Microfin, we have been strictly following these guardrails and remain prudent lenders. We have been cautious with lending, and the percentage of overleveraged customers—those with exposure of more than two lakh rupees—has come down to 1% for us. Also, customers with more than four loans have decreased to 4.7%, compared to 10.8% at the start of the guardrail implementation. This is a positive trend. Among customers with less leverage—either unique to us or with us plus one other trade line—the repayment track record is almost 97-98% on time. So, the guardrails have been quite helpful for the industry's health and have had a positive impact. Of course, Q1 is usually a slow quarter for the financial services industry. However, considering these new guardrails and the overall macro environment, our company disbursed around 175 crores in loans, benefiting a total of 311,000 borrowers. This is just about 9.4% lower than our Q4 disbursement, which in itself is a positive trend. I must say microfinance is turning a new leaf. The impact of the last financial year and previous challenges are behind us because, economically, the macroeconomic situation is improving. We had a good Rabi crop and harvest, which brought strong cash flow into the rural economy during Q1. Also, Q1 follows Q4, which typically sees the highest volume of microfinance disbursements, leaving a lot of cash in our customers' hands, enabling better instalment servicing. As a result, our collection efficiencies have improved, and the portfolio we are generating now has 99.3% repayment on time. ADVERTISEMENT Unlock 500+ Stock Recos on App Your disbursements are on a declining trend while the borrower base has increased marginally. What factors are driving this trend, and how do you plan to address it? Sadaf Sayeed: There are two factors here. First, as I mentioned, the decline is marginal and reasonable for Q1. We anticipate a significant improvement in Q2, as July itself showed good disbursement trends, and August is expected to follow similarly. ADVERTISEMENT We have taken a very calibrated approach towards lending, focusing on existing customers eligible for higher loan amounts and who fall into a category above typical microfinance customers. Many have been with us for seven to eight years, and we believe they can graduate to higher loan our last quarterly presentation, we highlighted that out of our total 3.4 million customers, around 1.237 million have retail loan exposure elsewhere. We aim to offer them better solutions and services through Muthoot itself. We have identified about 440,000 customers with credit scores above 730, which is considered very prime in microfinance and retail lending. ADVERTISEMENT We are focusing on these customers and have launched three new products: Micro-LAP (loan against property ranging from one lakh to seven lakh), individual loans up to five lakh rupees (which do not require group guarantees), and gold loans. This strategy will drive growth from our existing customer base, along with expansion into new territories like Assam, where we have opened branches. A quick view on the gross NPAs, which have remained stable since the last quarter. How much of this is attributable to the Karnataka crisis, and what is the current collection efficiency? Do you expect any near-term improvement? Sadaf Sayeed: That is a very good question. We had already made provisions related to Karnataka in the last quarter. We made a management overlay of around 230 crores then. In this quarter, we have utilized 132 crores of that overlay to write off some bad loans flowing from Karnataka. We still carry 97 crores of provision as part of the overall Expected Credit Loss (ECL) calculation. ADVERTISEMENT Karnataka's collection efficiency is improving; it had fallen to as low as 73% at the crisis peak but has now risen to 87%. Overall company collection efficiency stands at 93% and is consistently improving. Our regular collections, or ex-bucket collections, are at 99.3% for the company and 99% for Karnataka.
Time of India
7 days ago
- Business
- Time of India
Q1 disbursement dip seen as temporary; Q2 growth expected with new loans : Sadaf Sayeed
"This is a positive trend. Among customers with less leverage—either unique to us or with us plus one other trade line—the repayment track record is almost 97-98% on time. So, the guardrails have been quite helpful for the industry's health and have had a positive impact," says Sadaf Sayeed , CEO, Muthoot Microfin . Finance Value and Valuation Masterclass - Batch 4 By CA Himanshu Jain View Program Artificial Intelligence AI For Business Professionals Batch 2 By Ansh Mehra View Program Finance Value and Valuation Masterclass - Batch 3 By CA Himanshu Jain View Program Artificial Intelligence AI For Business Professionals By Vaibhav Sisinity View Program Finance Value and Valuation Masterclass - Batch 2 By CA Himanshu Jain View Program Finance Value and Valuation Masterclass Batch-1 By CA Himanshu Jain View Program What has been the impact of the Mfin and can you quantify by when you expect an improvement in the overall business performance trajectory? How do you see the business evolving, and when do you expect it to improve further? Sadaf Sayeed: To answer your question, this is actually the second version of the guardrails implemented by Mfin. The first set of guardrails was introduced in August 2024, and subsequently, guardrail 2.0 was implemented starting April 1st. The impact has been positive for the industry. From an industry perspective, the percentage of borrowers with multiple loans — defined as those having more than four loans — was around 20%, which has now come down to approximately 8%. At Muthoot Microfin, we have been strictly following these guardrails and remain prudent lenders. We have been cautious with lending, and the percentage of overleveraged customers—those with exposure of more than two lakh rupees—has come down to 1% for us. Also, customers with more than four loans have decreased to 4.7%, compared to 10.8% at the start of the guardrail implementation. This is a positive trend. Among customers with less leverage—either unique to us or with us plus one other trade line—the repayment track record is almost 97-98% on time. So, the guardrails have been quite helpful for the industry's health and have had a positive impact. Of course, Q1 is usually a slow quarter for the financial services industry. However, considering these new guardrails and the overall macro environment, our company disbursed around 175 crores in loans, benefiting a total of 311,000 borrowers. This is just about 9.4% lower than our Q4 disbursement, which in itself is a positive trend. Live Events I must say microfinance is turning a new leaf. The impact of the last financial year and previous challenges are behind us because, economically, the macroeconomic situation is improving. We had a good Rabi crop and harvest, which brought strong cash flow into the rural economy during Q1. Also, Q1 follows Q4, which typically sees the highest volume of microfinance disbursements, leaving a lot of cash in our customers' hands, enabling better instalment servicing. As a result, our collection efficiencies have improved, and the portfolio we are generating now has 99.3% repayment on time. Your disbursements are on a declining trend while the borrower base has increased marginally. What factors are driving this trend, and how do you plan to address it? Sadaf Sayeed: There are two factors here. First, as I mentioned, the decline is marginal and reasonable for Q1. We anticipate a significant improvement in Q2, as July itself showed good disbursement trends, and August is expected to follow similarly. We have taken a very calibrated approach towards lending, focusing on existing customers eligible for higher loan amounts and who fall into a category above typical microfinance customers. Many have been with us for seven to eight years, and we believe they can graduate to higher loan categories. In our last quarterly presentation, we highlighted that out of our total 3.4 million customers, around 1.237 million have retail loan exposure elsewhere. We aim to offer them better solutions and services through Muthoot itself. We have identified about 440,000 customers with credit scores above 730, which is considered very prime in microfinance and retail lending. We are focusing on these customers and have launched three new products: Micro-LAP (loan against property ranging from one lakh to seven lakh), individual loans up to five lakh rupees (which do not require group guarantees), and gold loans. This strategy will drive growth from our existing customer base, along with expansion into new territories like Assam, where we have opened branches. A quick view on the gross NPAs, which have remained stable since the last quarter. How much of this is attributable to the Karnataka crisis, and what is the current collection efficiency? Do you expect any near-term improvement? Sadaf Sayeed: That is a very good question. We had already made provisions related to Karnataka in the last quarter. We made a management overlay of around 230 crores then. In this quarter, we have utilized 132 crores of that overlay to write off some bad loans flowing from Karnataka. We still carry 97 crores of provision as part of the overall Expected Credit Loss (ECL) calculation. Karnataka's collection efficiency is improving; it had fallen to as low as 73% at the crisis peak but has now risen to 87%. Overall company collection efficiency stands at 93% and is consistently improving. Our regular collections, or ex-bucket collections, are at 99.3% for the company and 99% for Karnataka.
Time of India
12-08-2025
- Business
- Time of India
Muthoot Microfin in diversification binge, to start gold loans soon
Muthoot Microfin , a part of the Kerala-based Muthoot Pappachan group , is diversifying into secured lending , taking advantage of the easier qualifying asset criteria set by the Reserve Bank of India . The NBFC-MFI, with Rs 12,253 crore assets under management at the end of June, is all set to foray into gold loans through a co-lending arrangement with its parent, Muthoot Fincorp . Finance Value and Valuation Masterclass - Batch 4 By CA Himanshu Jain View Program Artificial Intelligence AI For Business Professionals Batch 2 By Ansh Mehra View Program Finance Value and Valuation Masterclass - Batch 3 By CA Himanshu Jain View Program Artificial Intelligence AI For Business Professionals By Vaibhav Sisinity View Program Finance Value and Valuation Masterclass - Batch 2 By CA Himanshu Jain View Program Finance Value and Valuation Masterclass Batch-1 By CA Himanshu Jain View Program As part of the risk mitigation exercise, the lender also began micro loans against property (LAP) and micro business loans a couple of months ago. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like SRM Online MBA | India's top ranked institute SRM Online Learn More Undo "We are mostly planning to leverage our branch network and existing customers to grow these lines of business. This will help us improve cost efficiency," Muthoot Microfin chief executive officer Sadaf Sayeed told ET. "Only for loans against property, we will look at outside customers," he said. Live Events In terms of qualifying asset rules, Muthoot Microfin's share of microfinance loans given to borrowers with up to Rs 3 lakh annual family income stood at 76%. About 94% of its AUM was given without collateral, while the balance 6% was sanitation loans and loans given to buy products such as solar lamps and mobile phones. RBI lowered the minimum qualifying asset criteria to 60%, providing all NBFC-MFIs a window to grow secured loans. All pure-play microfinance lenders are now eyeing growth in the secured business to reduce concentration risk. Microfinance, a system of providing collateral-free loans mostly to women, has been suffering badly due to overleveraging of small borrowers. "We have 34 lakh-odd customers. Out of this, 1,237,000 took retail loans outside microfinance," Sayeed said, adding that the company has identified 440,000 who have a credit score above 730 and either taken a single or two loans at most, targeting them to cross-sell new products, especially gold loans. Muthoot Microfin is planning to grow the micro LAP business by offering a balance transfer facility at a lower rate. Balance transfer is a financial method of moving an outstanding loan from one lender to another, typically at a lower rate. Sayeed said the company is targeting to build a Rs 1,500 crore portfolio by the end of FY26 for these three new product verticals. Overall, it is aiming to grow AUM by 20% to Rs 14,500-14,700 crore. The lender is back in the black with a slim Rs 6.2 crore net profit for the first quarter of the fiscal, while profit dropped 95% year-on-year compared with Rs 113.2 crore in the year-ago period. The lender added more branches during the first quarter, aiming for a turnaround in business prospects from the later part of the year.
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Business Standard
12-08-2025
- Business
- Business Standard
Muthoot Microfin Q1 results: Profit drops 95% to ₹6 cr on rising NPAs
The gross non-performing assets (NPAs) more than doubled to 4.85 per cent compared to 2.10 per cent a year ago, Muthoot Microfin said in a statement on Tuesday Press Trust of India New Delhi Muthoot Microfin Ltd has reported a 95 per cent decline in net profit to Rs 6 crore for the first quarter ended June 2025, mainly due to a surge in bad loans. In contrast, the non-banking financial company-micro finance institution (NBFC-MFI) had earned a profit of Rs 113 crore a year ago. Its total income also declined to Rs 559 crore during the quarter from Rs 664 crore in the year-ago period. The total expenses increased to Rs 553 crore against Rs 517 crore in the same quarter a year ago. The gross non-performing assets (NPAs) more than doubled to 4.85 per cent compared to 2.10 per cent a year ago, Muthoot Microfin said in a statement on Tuesday. Similarly, its net NPA (net of Stage III provision) also jumped to 1.58 per cent from 0.71 per cent in the first quarter of the preceding fiscal. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
