Negligible stress pool with adequate provision and focus on customer-led growth to drive profitability in FY24E
In a decade long eventful journey, microfinance lenders have navigated one of the longest asset quality cycles (FY17-22) – starting from demonetisation in FY17, floods, NBFC crisis in FY18-19, and lastly covid in FY21-22. While the lenders have remained resilient as reflected in 25% AUM CAGR between FY17-21, average credit cost stood elevated at ~2.5% vs <50bps during FY14-16.