Worst Over For Microfinance Sector, Revival In Rural Demand To Aid Growth: Satin Creditcare Chairman Singh

This confidence stems from several positive indicators. Disbursements have started to pick up after a sluggish period impacted by elections and heatwaves last year. The rural economy, a key driver for the microfinance sector, is also showing signs of a revival.

"The monsoon was fine at this point. The rural income, the farmer income, as well as agricultural and agri-allied earnings, will also probably see an uptick. Where kharif crops have been sown properly, I think, it's probably 100%. And even the crop acreage has also increased over there," the top executive underlined.

"We were probably one of the only few institutions which was in profit for the four quarters. If we give a complete landscape of the last 16 quarters, we've been profitable," he said.

The CMD emphasised that doubling the loan book is not the primary focus. "For us, the biggest metric is your asset quality. Even if the growth is in the early teens, what is important is that our asset quality is good enough for us to generate an ROA of about 2.5% to 3%. That's what our final goal is," he said. 

Singh noted that the company maintained an average ROA of 2% over the last six challenging years. "I think that's a very huge statement."

Singh also highlighted the importance of technology in driving customer acquisition, disbursement cycles and collection efficiency.

"We are probably one of the very few institutions with a great fallback on technology. That's the reason why we opened up our subsidiary, which is a technology company.

"We believe that the growth of microfinance, to a large extent, will depend on how your technology enables acquisition of a customer and disbursement cycles as well as your collection efficiency," he said.

The CMD said that in FY26, he expects credit costs to decline from the 4.6–4.7% range seen in FY25. The company's guidance will come after the first quarter, he added.