VFS Capital Ltd is expecting nearly 69 per cent growth in disbursements at ₹1,100 crore by March 2023 backed by a higher demand for credit and diversification into newer geographies and product categories. The microfinance company had disbursed close to ₹650 crore in FY22. It is looking to disburse close to ₹2000 crore next fiscal.

The company’s loan book outstanding is expected to be ₹1,200 crore by end of FY23, up from ₹800 crore last fiscal. The total loan book is likely to touch ₹1,800-1,900 crore next fiscal.

According to Kuldip Maity, MD & CEO, VFS Capital, the company, which has been predominantly present in eastern and northeastern region is looking to foray into newer geographies to diversify its markets. It is also looking to diversify and add newer product categories to strengthen its non-qualifying assets portfolio, which includes loans other than microfinance.

“We are currently present in 14 States, we are looking to add Rajasthan this month and two more including Haryana and Uttarakhand early next fiscal. We planned to add 35 new branches this year of which we have already opened 15 so far and the remaining is expected to come up soon,” Maity told businessline, on the sidelines of a recent summit on microfinance in the city.

Qualifying assets

It is to be noted that under the earlier qualifying assets criteria, an NBFC-MFI was required to have minimum 85 per cent of its net assets as ‘qualifying assets’ which is essentially microfinance loans. However, RBI recently modified the guidelines following which the minimum requirement of microfinance loans for NBFC-MFIs stands revised to 75 per cent of the total assets. This allows MFIs to give non-microfinance loans to the tune of upto 25 per cent.

VFS Capital is looking to diversify into gold loan and home improvement loans among others. It has also tied up with SIDBI for lending to MSMEs by providing loans ranging from ₹50,000-5 lakh at affordable rates.

According to SIDBI, women entrepreneurs account for approximately 20 per cent of the total proprietary concerns in India and the addressable credit demand in micro segment is close to ₹11.9 trillion. Cost of micro credit to the segment remains on higher side.

“We have started lending under the scheme from around 50 of our branches and plan to add another 50 branches moving forward. We are looking to disburse close to ₹30-40 crore under the scheme,” he said.

VFS, Maity said, is looking to raise equity worth ₹80-100 crore and debt to the tune of ₹1,400-1,500 crore during 2023-24 to support its growth needs.