As part of its Vision 2028, Spandana Spoorthy Financial Ltd is aiming at ₹28,000 crore portfolio while containing the risk of geographical concentration by bringing down contribution to its business from few States.

The third quarter ended December 31. 2023, was eventful for the micro lender. It crossed a milestone by reaching ₹10,404 crore worth assets under management (AUM). 

Also from a profitability point of view, its net profit for the 9 months period was ₹372 crore which has surpassed the full year profits of Spandana Spoorti of the past many years.

For the Hyderabad – based MFI, its top three States contribute 42 per cent to the portfolio while top five account for 61 per cent.

Growth vision

As part of its Vision 28, the MFI is envisaging that the maximum contribution of any State in the total portfolio should not be more than 11 per cent to 13 per cent to mitigate the risk of geographical concentration, according to its Managing Director and Chief Executive Officer Shalabh Saxena.

“Currently, we have two States in that range which are Madhya Pradesh and Orissa. So we will aim to get this in the range of our vision,’” he said.

This will be done through a combination of the increase in the overall denomination or the denominator in the other states, plus selectively closing down a few pockets in these specific states, which are not profitable for the MFI.

Spandana had earlier identified seven focus States. “We are dropping Haryana from the list and will continue to focus on the other six states, namely Bihar, Rajasthan, Uttar Pradesh, West Bengal, Tamil Nadu and Gujarat. In Haryana it has a very small book of about ₹40 crore,’‘ Spandana CMD said in the earnings call.

During the quarter, Spandana opened 72 branches and now has 1,574 branches, of which weekly branches are 375. This also includes 18 new branches opened during the year for Loan Against Property and Nano Loans under our subsidiary Criss Financials. . For the quarter, it disbursed ₹407 crores in the weekly branches, which is 16 per cent of the total disbursement in the quarter.

Spandana’s net profit increased 79 per cent at ₹127 crore in the third quarter this fiscal as against ₹71 crore in the corresponding quarter of the previous financial year. 

The revenue grew by 75 per cent at  ₹657 crore as against ₹375 crore in the year-ago period while disbursements increased 8 percent to ₹2,553 crore.