Latest news with #SadafSayeed
The Hindu
16 hours 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
5 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
5 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.
Economic Times
6 days ago
- Business
- Economic Times
Muthoot Microfin shares in focus as Q1 PAT plummets over 94% YoY
Muthoot Microfin shares are likely to be in focus on Tuesday, August 12, after the company posted a sharp 94.5% year-on-year (YoY) fall in its profit after tax (PAT) to Rs 6.2 crore in Q1FY26, compared to Rs 113.2 crore in the same quarter last year. ADVERTISEMENT The company's Net Interest Income (NII) stood at Rs 342.3 crore in Q1FY26, down 16.8% YoY from Rs 411.5 crore in Q1FY25, with Net Interest Margins (NIMs) at 11.5%. Pre-Provision Operating Profit (PPOP) came in at Rs 138.5 crore, marking a 44.3% YoY decline from Rs 248.6 crore. Total income for the quarter was Rs 559.1 crore, while the cost of funds (CoF) fell to 10.79% from 11.02% in Q4FY25, aided by greater PTC utilisation and diversified funding sources. Provisioning cost stood at 4.3%, with the provision coverage ratio (Stage III) robust at 68.5%. Gross NPA (GNPA) rose to 4.85% from 2.10% a year ago, while Net NPA (NNPA) increased to 1.58% from 0.71% in the same period last company maintained strong liquidity, with Rs 536.5 crore in cash and equivalents, along with DA/PTC sanctions of Rs 1,002 crore and unutilized term funding sanctions of Rs 561 Microfin also reported a healthy capital adequacy ratio (CRAR) of 27.85%. On the operational front, 23% of collections were conducted via digital channels such as UPI and the customer app, while 100% of disbursements were executed digitally. ADVERTISEMENT 'Q1 is traditionally a seasonally soft quarter for the microfinance industry in terms of disbursement growth. The quarter saw a heightened impact driven by ongoing sectoral challenges and the implementation of stricter MFIN guardrails, prompting the industry to shift its focus from aggressive expansion to internal consolidation. Aligned with our long-term strategy of sustainable value creation, Muthoot Microfin adopted a calibrated approach—moderating disbursements and prioritising portfolio quality, while channelling efforts towards strengthening operational infrastructure,' said Sadaf Sayeed, CEO, of Muthoot Microfin. Unlock 500+ Stock Recos on App Muthoot Microfin shares closed flat at Rs 152.95 on the BSE on Monday. ADVERTISEMENT (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)
Economic Times
06-06-2025
- Business
- Economic Times
Rupee rises 13 paise to 85.66 against US dollar as RBI cuts policy rate by 50 bps
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads The rupee pared initial losses and appreciated 13 paise in morning trade on Friday, after the Reserve Bank cut repo rate by a higher-than-expected 50 basis points to prop up traders said the latest RBI monetary policy has an all-round focus, it maintained growth momentum, by cutting rates by 50 bps, liquidity infusion by cutting CRR by 100 bps over the year and targeting inflation at 3.7 per cent in the interbank foreign exchange, the domestic unit witnessed heavy volatility. It opened at 85.91, registering a fall of 12 paise over its previous close. But soon pared the losses and saw an early high of 85.66 against the Thursday, the rupee snapped its two-day losing streak and closed 8 paise higher at 85.79 against the US Monetary Policy Committee (MPC) on Friday cut the benchmark policy rate by 50 basis points to 5.5 per cent and said frontloading rate cuts would support economic Reserve Bank retained GDP growth projections for the current fiscal at 6.5 per the central bank decided to cut Cash Reserve Ratio (CRR) by a huge 1 per cent, which will unlock Rs 2.5 lakh crore liquidity to the banking system for lending to productive sectors of the economy."RBI monetary policy is 10/10, it has an all-round focus, maintaining growth momentum, by cutting rates by 50 bps, liquidity infusion by cutting CRR by 100 bps over the year and targeting inflation at 3.7 per cent."It is great to see both GOI fiscal policy and RBI monetary policy working in tandem to propel the Indian economy to a new growth trajectory. It augurs well for the industry and our country," said Sadaf Sayeed, CEO, Muthoot Microfin Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading higher by 0.07 per cent at crude, the global oil benchmark, fell 0.52 per cent to USD 65.00 per barrel in futures the domestic equity market front, the 30-share benchmark index Sensex recovered the initial lost ground and was trading 747.11 points, or 0.92 per cent higher at 82,189.15, while the Nifty was quoted 244.70 points or 0.99 per cent up at 24, institutional investors (FIIs) sold equities worth Rs 208.47 crore on a net basis on Thursday, according to exchange data.
