CreditAccess Grameen Aims To Grow At 30% In Next Five Years, Says CEO

CreditAccess Grameen CEO Udaya Kumar Hebbar says diversification of funding sources helped the firm overcome the liquidity crunch.

A woman receives a micro-loan during a meeting at Sadasivpet, India. (Photographer: Adeel Halim/Bloomberg)
A woman receives a micro-loan during a meeting at Sadasivpet, India. (Photographer: Adeel Halim/Bloomberg)

Microfinance firm CreditAccess Grameen Ltd. aims to grow at an annualised rate of 30 percent in the next five years as it looks to tap households that don’t have access to financial institutions.

“A compounded annual growth rate of around 30 percent for the next five years is possible against 50 percent clocked in last five years,” Udaya Kumar Hebbar, managing director and chief executive officer of CreditAccess Grameen, told BloombergQuint in an interview. “We have a huge potential to grow as there are still 75-100 million households [in India] that remain unbanked.”

This comes at a time the microfinance industry witnessed 42.9 percent year-on-year growth in the first quarter of 2019-20. The total loan portfolio stood at Rs 19 lakh crore as on June 30, according to a report by MicroFinance Institutions Network, an association for the microfinance sector in India.

According to Hebbar, diversification of CreditAccess Grameen’s funding sources to National Bank for Agriculture and Rural Development, foreign institutional investors, and external commercial borrowings helped the company overcome the liquidity crunch in the financial system. “Already 20 percent of our funding is coming from abroad and we plan to enhance it to 30-40 percent in the near future,” said Hebbar.

On Wednesday, shares of the Bengaluru-based firm rose as much as 1.7 percent to Rs 618 apiece, compared to a 0.37 percent gain in the Nifty 50 Index.

Watch the full interview here:

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