Satin CreditCare plans to raise Rs 10,000 crore in debt in FY25, says CMD

Some MFI players may not be obeying to charging normal rates and charging high rates but the industry is doing fine.

Microfinance lender Satin Creditcare is planning to raise Rs 10,000 crore in debt in 2024-25, chairman cum managing director (CMD) HP Singh said. “We are looking at raising 25 percent more than last year and our target would be raising around Rs 10,000 crore in debt in FY25,” Singh said in an interaction with Moneycontrol.

The lender is also planning to expand its branch network, in numbers and geographically, during the financial year. “We would open around 300 branches in FY25 and are looking at opening branches in northeastern states,” Singh said. The microfinance lender is also targeting a 25 percent growth in assets under management (AUM) in 2024-25, Singh said during the interview.

Edited excerpts:

How was your business growth in the 2023-24?

FY24 was one of the finest years post the pandemic when we could achieve the highest profits. Our RoA (return on assets) was high at 4.8 percent, and we reported the highest ever profit of Rs 430 crore.

The Reserve Bank of India (RBI) has been cautioning some microfinance lenders on high rates. What is your understanding of this?

If you look at the overall scenario among microfinance lenders, they cater to the bottom of the pyramid. They operate at a very high cost of funds and these are increasing with time. Some MFI (microfinance institution) players may not be obeying the rules on charging normal rates and charging high rates but the industry is doing fine.

Are you looking at raising any funds in FY25? And how many branches do you plan to open in FY25?

We are looking at raising 25 percent more than last year and our target would be raising around Rs 10,000 crore in debt in FY25. We would open around 300 branches in FY25 and look at opening branches in northeastern states. Andhra Pradesh, Telangana and Nagaland would be our target states. The northeast, we feel, has potential where we can grow the credit cycle.

How much AUM are you targeting in FY25?

We are looking at around 25 percent growth in our assets under management. In FY24, our AUM grew to Rs 11,850 crore and the same would be around Rs 13,000 crore in FY25.

Did you face any challenges in the recovery process during the election season?

Normally, recovery is weak in the first quarter of any financial year and during election season. During this season, we did not see any major concerns except some increase in our credit cost.

Several states have announced farm loan waivers. Usually, small lenders and MFIs have to at times face the burden of late repayment by borrowers. How do you view this?

We have seen the Assam government announcing some subsidies for borrowers who repay on time. This has resulted in the improvement in the credit culture.

And whenever such announcements are made, we see some effects but nothing major.