Spandana Sphoorty aims to shift 75% portfolio to weekly repayments by FY28

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Spandana Sphoorty Financial is aiming to shift 30 per cent of its portfolio to weekly repayments by the end of FY25 and 75 per cent by FY28, MD and CEO Shalabh Saxena said.

Currently, all the new 500 branches already follow the weekly repayment format, and the lender is in the process of shifting the repayment tenure for the older 1,000 branches which follow a monthly repayment schedule. The MFI has a total of around 1,520 branches at present.

In addition to enhancing repayment ability, the weekly facility also offers flexibility to customers for different loan segments, Saxena told businessline.

“We have started offering 12 and 18 months loans in addition to the 24 month loans, and several customers have started taking it. Of the 500-odd weekly branches we have, around 88 per cent are in the 12 and 18 month category. So customers also don’t want to tie up themselves for long,” he said.

The NBFC-MFI aims to grow the consolidated AUM to ₹17,000 crore by the end of FY25 and ₹28,000 crore by FY28. Within this, the non-microfinance book is expected to grow to ₹2,000 crore by FY25 and ₹3,500 crore by FY28.

To address the portfolio concentration risk, the lender has identified seven key States — Bihar, Rajasthan, Uttar Pradesh, Haryana, Gujarat, West Bengal and Tamil Nadu, which are eventually expected to contribute to about 40 per cent of the AUM.

Further, it will bring down the share of existing States to ensure that no State contributes more than 12 per cent of the AUM by the end of the next financial year, Saxena said, adding that the share of States such as Madhya Pradesh and Odisha has already come down to about 14 per cent from the earlier 16-17 per cent.

Borrower’s profile

In terms of borrower profile, 35 per cent of the lender’s customers have only borrowed from Spandana Sphoorty whereas 38 per cent have one other credit line from another lender and 15 per cent have two other loans. The remaining 12 per cent borrowers have taken multiple credit lines and the company plans to bring down their share to single digits. On the other hand, it plans to grow the share of single credit line borrowers to 37-38 per cent and those with one other loan to 40-41 per cent.

Saxena said that the capital levels for the microfinance business are adequate and the company will not need to raise growth capital. However, arm Criss Financial will need capital and the lender might look to raise around ₹400 crore by the end of FY25 and another ₹200 crore towards the end of FY26.