Money & Banking

Satin Creditcare eyes 25% overall AUM growth in next five years: CMD

K.R. Srivats New Delhi | Updated on September 30, 2019 Published on September 30, 2019

HP Singh, CMD, Satin Creditcare (file photo)

Keen to increase share of non-microfinance book to one-third in next five years

Satin Creditcare, a leading microfinance lender, is eyeing 20-25 per cent growth in overall assets under management (AUM) in each of the next five years, a top official said.

This Non Banking Finance Company (NBFC) is also looking to grow the share of its non-microfinance book to one third of the overall in the next five years, HP Singh, Chairman and Managing Director, told BusinessLine here. Currently, nearly 90 per cent of its overall Rs 7,100 crore book is accounted for by microfinance at Rs 6,300 crore with the rest accounted for by businesses around SME financing, business correspondents and affordable housing.

“We want to grow steadily. The current environment is also ...(not conducive for aggressive risk taking). There is however now no slowdown in our sector and there is enough liquidity to support our growth in microfinance space”, he said. Satin Creditcare, which was only in eight states when demonetisation happened in November 2016, has now emerged as a pan India player with presence in 23 States, Singh said.

“After demonetisation, things were difficult for us. microfinance was terribly hit as most of it was cash based. Demonetisation was a learning experience for us. After demonetisation, our risk mitigation strategy was focused on diversification. We wanted to diversify geographically and product wise. From being a North India focused player, we have now become a pan India player and entered into affordable housing, SME finance in a big way”, he said.

Satin Creditcare was a deposit taking NBFC till 2004. In 2005, SIDBI gave Satin Creditcare its first loan for microfinance lending. “We were born in 1990, but baptised only in 2005 when SIDBI came in”, Singh said. Singh, who has over three decades experience in the financial services sector, said that the cost of funds for Satin Creditcare currently stood at 12 per cent. This NBFC-MFI’s yield is at 22 per cent. It has a capital adequacy of 28 per cent and is leveraged nearly four times the equity capital.

Singh also said that Satin Creditcare is now in talks with banks to see if it could do some co-origination transactions. “Co-origination is important. It will take a while”, he said.

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Published on September 30, 2019
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