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Reddy, who previously founded Spandana Sphoorty Financial Ltd warns that borrowers are severely over-leveraged, with more than 50 percent of borrowers having between 6 to 15 loans, with their EMIs far exceeding their household incomes
The new NBFC, which will be renamed Keertana Finserve, will focus on gold loans, MSME loans and loans against property. Reddy is slated to be the MD & CEO of the new company
The Spandana board and former MD may soon announce the intent to settle on specific dues, which includes Spandana Mutual Benefit Trust paying Rs 20 crore to its gold loan arm.
Though Reddy had initially planned to seek a new NBFC licence, she later decided to acquire an existing NBFC and merge the existing business to speed up the process
Earlier in an interview with Moneycontrol, Reddy had said she was forced to quit after differences on the valuation at which the majority investor wanted to sell the firm to Axis Bank. Reddy also said she didn’t have any plan to return to the company.
Padmaja Reddy, founder and former managing director of microlending institution Spandana Sphoorty, resigned recently from the company after the board refused to renew her contract. With Reddy’s exit, an era is ending at Spandana.
The new NBFC will focus on secured loans. In early November, Padmaja Reddy quit Spandana saying she was not stepping down by choice but because the Board’ did not extend her contract.
