Suryoday Small Finance Bank (SSFB) has set its sight on becoming a bank of choice for 1 per cent of low-income aspirational households in the next 3-4 years, and in the process double its loan portfolio to ₹10,000 crore, according to a top official.

The bank is currently catering to the banking needs to 0.5 per cent of the households in the country, Baskar Babu R, MD & CEO, said in an interaction with BusinessLine.

As of June-end 2022, SSFB had 20.1 lakh customers (including about 17.5 lakh inclusive finance customers), loan portfolio of ₹5,132 crore and deposits of ₹4,020 crore .

The loan portfolio includes inclusive finance (loans for unbanked and underbanked customers), commercial vehicle loans, affordable housing loans, micro business loans, secured and unsecured business loans to micro, small and medium enterprises, among others.

“We have completed five-and-a half years of operations (as a bank). Currently, we are catering to one out of every 200 households in the country. We started off as a microfinance institution (non-banking finance company) in 2009.

“The bottom of the pyramid customers (joint liability group of women) we funded over the years have moved up the income ladder, with family members of the main borrower entering the job market,” said Babu.

So, the bank too needs to graduate along with the customers by offering products such as secured business loans and home loans that cater to their enhanced requirements.

Home loan needs

He said, “It would be really wrong for us to assume that the home loan requirement for such customers would be only ₹7-8 lakh. When there is an increase in the number of earning members in a household, their aspiration will be to go for an apartment or a house for ₹15-20 lakh.”

Babu observed that customers are delighted when they are served (with most of their loan/ account documentation being completed) at their doorstep.

“Customers should not be made to run around. Their branch visit should only be for signing the loan document and taking the cheque. This process should be more of a celebration than an exercise in exhaustive documentation,” he said.

Babu emphasised that years of financial inclusion efforts put in by all lenders has led to a situation where the earlier unbanked and underbanked customers are becoming well-banked.

In FY23, the bank will focus on expanding financing for affordable housing, commercial vehicles, and secured business loan segments, he added.

Babu observed that SSFB’s goal is to increase the loan book by 20-25 per cent each year. In addition to the loan book, the bank will increase its customer base by 15 to 20 per cent in FY23.

The bank intends to realign the proportion of inclusive finance to non-inclusive finance loans from the current 67:33 to 60:40 by March-end 2023 and to 50:50 in three years.