Caspian Debt aims to push microfinance portfolio to 30% from 10% in FY25: MD and CEO

On Caspian Debt’s total disbursements in FY25, Gupta said that the company plans to up its disbursements by 20 percent from last year, Gupta said.

Debt funding company Caspian Debt is planning to push its microfinance portfolio to 30 percent in 2025 from the existing 10 percent, the company’s managing director and chief executive officer (MD and CEO) Avishek Gupta told Moneycontrol.

“Our portfolio in microfinance is around 10 to 15 percent of our total portfolio and we are in fact interested to take this... up to 30 percent,” Gupta said.

For this, Gupta said that the company plans to build a climate-resilient sub-sector under the larger microfinance space. “On the climate resilience front under MFI, we are getting a lot of interest as of now. But we want to expand it even further by trying to put this layer on top of both microfinance and affordable housing finance,” Gupta said.

On Caspian Debt’s total disbursements in FY25, Gupta said that the plan is to raise the figure by 20 percent from last year.

Edited excerpts from the interaction.

How did your disbursements work in the microfinance and affordable housing segments in FY24? What is the plan for FY25?

We continue to lend to affordable housing finance and microfinance, but it is a small portion of our overall business microfinance has been between 10 and 15 percent of the overall portfolio. And affordable housing finance is even smaller, because primarily our focus is on housing microfinance, not the typical mortgage finance business. We are in fact interested to take this 10-15 percent portfolio we have in microfinance, to take it up to 30 percent.

And we have also seen that while microfinance has better understood by traditional lenders and they are able to borrow, normal commercial lenders get comfortable with that segment. There are segments within that that are still not clearly addressed and microfinance institutions see that demand from the ground.

You launched a climate resilience sub-segment…

Basically, where microfinance and affordable housing finance were till last year was the normal stuff, but it was slowly coming down. We want to expand it even further by trying to put this layer of climate resilience on top of both MFI and affordable housing finance.

We have also partnered with Sa-Dhan because they have already done a lot of groundwork. The way this will work is we will bring more climate-focused elements into the picture to make our lending process smoother.

And how are you looking at growing your total disbursements in FY25?

We disbursed close to about Rs 1,000 crore and we are expecting a 20 percent growth in terms of disbursal amounts in the next year. And looking at our disbursements to MFIs and affordable housing space, we are expecting our climate resilience offering to work well and it will roughly be about 10 percent for microfinance and about 5 to 8 percent for affordable housing finance.

What are Caspian Debt’s borrowing plans in FY25?

Last year, we borrowed about Rs 280 crore and this year, we are talking about somewhere around Rs 300 crore to Rs 340 crore for borrowings. We do not need to raise equity right away, but we are working in the process to get a little, get more capital. And I think it is going to be banks and larger financial institutions.