Muthoot Microfin Aims to Reduce Micro Loan Share to 60% by 2030
Muthoot Microfin plans to cut risk by bringing down group micro loan share to 60% by 2030, says CEO Sadaf Sayeed
The Economic Times
Image: The Economic Times
Muthoot Microfin, a leading micro lender in India, plans to decrease its reliance on micro loans from 80% to 60% by 2030. CEO Sadaf Sayeed announced a diversification strategy, including entering two-wheeler financing, to mitigate risks associated with the microfinance sector.
- 01Muthoot Microfin aims to reduce micro loan share to 60% by 2030.
- 02The company plans to diversify into two-wheeler financing this festive season.
- 03Currently, 83% of its gross loan portfolio of ₹14,000 crore consists of micro loans.
- 04The Reserve Bank of India lowered the qualifying asset criteria for microfinance institutions to 60%.
- 05Muthoot Microfin targets an asset growth to ₹30,000 crore by 2030.
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Muthoot Microfin, one of India's top micro lenders, is set to reduce its micro loan share from 80% to 60% by 2030 as part of a strategic diversification plan. CEO Sadaf Sayeed revealed that the company intends to enter the two-wheeler financing market during the upcoming festive season, aiming to mitigate risks linked to the microfinance sector. Currently, approximately 83% of Muthoot Microfin's gross loan portfolio, valued at ₹14,000 crore (roughly $1.68 billion USD), consists of micro loans provided to joint liability group members. The Reserve Bank of India has recently adjusted the qualifying asset criteria for non-banking financial companies (NBFCs) in the microfinance sector from 85% to 60%, facilitating business diversification. Muthoot Microfin aims to expand its assets under management to ₹30,000 crore (roughly $3.6 billion USD) by 2030.
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This shift towards diversification may lead to more varied loan options for customers, reducing reliance on micro loans and potentially stabilizing the microfinance market.
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